By Mike Antich

The current economic situation is forcing public sector fleet managers to take a hard look at how they operate their fleets and make adjustments to cope with budgetary shortfalls. Savvy fleet managers know their local and state tax revenue forecasts for the immediate and long-term future. These fleet managers have contingency budget strategies planned before upper management directs them to cut jobs or reduce capital purchases. 

The challenge is to provide and maintain service levels and find economical ways to achieve cost reduction mandates. Budget cuts at all levels of government will confront fleet managers for the next 12 to 24 months. Fleet managers will be required to cut costs in all areas. In some cases, this may include decreasing vehicle inventory and extending PM intervals. The difficulty is that most fleet budgets are already bare bones. Balancing the loss of revenue while maintaining service levels is the dilemma facing today's government fleet managers. Customers want the same or higher levels of service at the same time fleet managers are trying to find ways to reduce costs. It is important for fleet managers to talk with user groups at least twice per year to mitigate these conflicting priorities.

Along with reduced funding come associated process reviews to maximize efficiencies such as vehicle utilization, fleet right-sizing, take-home vehicle monitoring, and enhanced fuel-use monitoring. Fleet managers are re-examining equipment lifecycles and utilization as politicians advocate extending lifecycles "one more year." Fleet managers must always deal with politicians, especially the newly elected "fleet expert" who assumes fleet operations is not being run efficiently. A common (and ongoing) perception among public officials is that anyone can run a fleet; there are no special talents or skills involved. Educating politicians about the intricacies and nuances of fleet management is an ongoing struggle.

Tighter Operating Realties

The implications of the economic downturn for all fleet operations are enormous and require balancing customer demands with tighter operating realities. With a poor economy, it is easy for fleet managers to become distracted and reactive rather than proactive in managing their fleets. As guardians of taxpayers' dollars, fleet managers need to improve their operations. Many fleets are working double time with customers to assist with proper utilization practices, fleet right-sizing, and the ongoing integration of fuel-efficient vehicles into the fleet.

As fleet managers encounter freezes on hiring and capital purchases, they are being told to do more with less. The only silver lining is the dramatically lower cost of fuel. However, fleet managers understand the volatility of fuel pricing. Roller coaster fuel prices make budgeting a difficult task. Currently, fuel prices are low, but what will an economic recovery do to the future price of fuel? If the economy bounces back, will the price of fuel rise due to increased demand?

Although green fleet initiatives remain strong, there is an emphasis on right-sizing engines and not just buying hybrids and alt-fuel vehicles. Unfortunately, lower fuel prices throw cold water on green fleet efforts at some fleets. An ironic consequence of sharply reduced fuel prices is that the emphasis shifts away from alt-fuel vehicles. An upside to higher fuel prices is that it is easier for fleet managers to place alternative-fuel vehicles and hybrids in customers' departments.

Technician Labor Pool

It is anticipated the unemployment rate and decrease in the number of automotive dealerships will free up more technicians into the labor pool. Many fleets hope to recruit good technicians from dealerships reducing staff. For many years, government fleets have been experiencing difficulty in finding qualified technicians. However, due to the current economic climate that may change as job losses reverberate as local dealerships close.

Staffing can also become an issue as employees retire during a hiring freeze. It is necessary for fleet managers to evaluate staffing continuity. It is important to know your staff's retirement plans. Identify the retirement windows of Baby Boomer technicians so you can transfer their institutional knowledge to newer technicians. One way to do so is by creating an apprentice program pairing inexperienced technicians with tenured employees.

Fleet Managers Must be Leaders

Fleet managers are in leadership positions and they must become better leaders. Today's issues demand fleet managers do so. They must be decisive in their decisions.

Gloom and doom will not work.

Let me know what you think.

mike.antich@bobit.com