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Van Fleet Insight
Transport and Food Distribution November 2013
www.mbvans.co.uk/transport
Keep your fleet on the road
Why dealer support Buying decisions
and reliable vans
minimise downtime
How to choose
Fleet best practice profiles
Iceland, Dairy Crest
and Ginsters’s tips
the right van
for an efficient fleet Fleet professionals reveal their key considerations
Brought to you by FleetNews
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The New Sprinter. Welcome
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to work with Mercedes-Benz Vans life of the vehicle with industry-leading safety systems,
promoting best practice and sharing our MobiloVan UK (designed to keep your vehicles moving in the
joint experience. event of a roadside breakdown) and strong wholelife costs
Rather than taking the traditional advertising approach, that make your fleet work harder.
we are keen to provide fleet managers and buyers with And all through this you have the peace of mind of knowing
interesting and informative articles, sharing the expertise of Mercedes-Benz has decades of experience in providing fleet
some of our national and SME fleet customers. excellence.
At Mercedes-Benz Vans, we are committed to providing
consultative support to our fleet partners, selling the vehicle
is just the start. We have a dedicated fleet and SME team
which is always on hand to work with our customers to make
the right decision about their vehicle. We are also one of the Andrew Lawson
few manufacturers to boast a dedicated commercial vehicle National Fleet Sales Manager, Mercedes-Benz Vans
Contents
4 l Economic overview 12 l Spotlight on SME van operators
Transport and food distribution sector forecasts growth. Companies should base van choice on wholelife cost
calculations to further boost growing sector.
6 l Overview: home deliveries
Morrisons and Iceland enter online grocery shopping market. 14 l Running a reliable fleet
Van reliability and regular checks can reduce downtime –
7 l Van conversions and boost a company’s bottom line.
Meeting the diverse needs of Britain’s van operators.
16 l Case studies
8 l Fit for purpose Fleets in the transport and food distribution sector share best
practice tips, what they look for when selecting a van, and how
The right van benefits both you and your customers. online shopping has changed how their operate their vehicles.
A Daimler Brand
Brought to you by FleetNews
Economic overview
Transport and distribution “We are
beginning to see
confident 4%
the return of
Not at all
sector forecasts growth organic growth”
John Cridland, director
general of the CBI
Van fleets likely to expand in number as experts grow in confidence over economy Transport and distribution Very confident
N
Not very CEOs’ confidence levels for 24%
early three-quarters of Mike Woodward, partner for The estimated value of the UK online retail food distribution sector, reflects the growing confident 22%
CEOs in the transport and manufacturing and automotive at Deloitte, market in 2012 was £78bn and there was a health of the sector. Take Geopost for revenue growth in 2013
food distribution sector are said: “There is an increasing confidence from 300% growth in mobile commerce. example: the parcel delivery firm, like UPS, Somewhat
predicting revenue CFOs that business, and their particular “Consumers can now shop whenever they operates a solus-badge deal with Mercedes- confident 50% Source: 16th Annual CEO
growth in 2013. business, will improve. This is backed up by a want so they expect delivery options to Benz, and added 800 vans to its fleet in the Survey, PwC, 2013
A flat-lining economy Confederation of Small Business survey, match their buying habits and fit with their past year, taking it to 3,000.
has started to show an which revealed the highest confidence levels increasingly busy lifestyles,” said Carole The average van replacement cycle
upturn and, as more and since 2010. Woodhead, CEO of Hermes. has fallen from 4.9 years in 2012 to 4.6 in
more data becomes available, the UK “If you look at all the surveys coming out “Failure to meet their expectations can 2013 as companies in transport and food
economic outlook is beginning to show signs they’re all pointing at an increasing damage the reputation of the retailer and distribution began renewing their fleets more
of recovery. confidence in business outlook.” their relationship with the customer.” quickly – another key sign of confidence.
Most recently, the CBI business lobby Analysts will often use the van market as a However, the sector faces several
group increased its forecast for UK economic barometer of economic growth and, again, Boom in online shopping challenges, with fuel prices chief
growth for 2013 from 1% to 1.2%. the signs are good. Figures from the Society among its concerns, according to
It also increased its forecast growth for of Motor Manufacturers and Traders show Almost a billion parcels are estimated to PricewaterhouseCoopers (PwC).
2014, from 2% to 2.3%, on predicted that van registrations rose 10.3% in have been delivered in the UK in 2012 by an Increasing fuel prices have a direct impact
increases in disposable income and in September to 43,066. expanding logistics workforce of around on post and logistics companies, and there is
business and housing investment. Sales have risen 9.6% over the year so far 1.8m people and more than two-thirds an increasing global focus on climate change Van registrations Source: FTA Logistics Report 2013
The group, which represents 240,000 UK to 205,005, compared to 187,067 units in (68%) of retailers now offer next-day with new environmental regulations affecting
businesses, says the forward guidance on the same period in 2012, with Mercedes- these businesses. PwC says this requires
300000 289,463
delivery services.
interest rates recently given by new Bank of Benz among the star performers. The boom in online shopping highlights companies to revisit strategic plans and to 260,153 260,000 (est)
England governor Mark Carney should add to With 5,766 new vans registered in the interdependent relationship between understand the issues that are likely to
the positive sentiment. September, a 13.4% market share, the UK internet retailers and logistics providers, create or destroy value. 239,641
250000
market had the best-performing Mercedes- where any upturn in shopping activity will There is also increased competition in the 222,915
Corporates willing to take a risk Benz division in the world. increase not only deliveries but the return of market, not only from new small businesses,
That growth is being partly fuelled by the items, especially following the festive season. but also from the consolidation of larger 186,386
An increasing sense of confidence has also transport and food distribution sector, which Royal Mail, which has been partly- companies. This has resulted in significant 200000
been seen in Deloitte’s latest CFO Survey, accounts for nearly 11% of the UK’s privatised by the Government, has been one pressure on prices.
with it suggesting that the mood among economic output, worth an estimated of the biggest beneficiaries.
corporates has been transformed in the past £150bn, and employs more than three million The postal and parcel delivery company General trend of outsourcing
year. More than half (54%) of CFOs say now people, according to Government figures. reported pre-tax profits of £324m in the past 150000
is a good time to take greater risk on to their One of the key drivers is how the internet year – up 60%, whereas two years ago it was PwC suggests there has been a general trend 2008 2009 2010 2011 2012 2013
balance sheet, a six-year high. is revolutionising the way in which people losing money in its UK post and parcels of outsourcing supply chain management
The survey captures shifts in UK CFOs’ shop. Consumers now have multiple operation. and warehousing services to logistics
opinions on valuations, risks and financing channels through which they can purchase It operates the biggest fleet in the country companies in order to be able to efficiently
and has become a benchmark for gauging goods. They can compare, select, purchase with 32,000 vans and 2,000 cars. meet customer demands.
financial attitudes of major corporate users and receive products, often without going Its success, and that of the other fleets This has gone hand-in-hand with the Average weekly online retail sales Source: FTA Logistics Report 2013
of capital. anywhere near a shop. making up the top 20 in the transport and evolution of technological services, for
example real-time tracking of parcels, which 600 £554.4m
has given distribution companies the ability
to provide an improved service. £480.89m
PwC warns that companies in transport 500
and distribution need to ensure they are £407.31m
£150bn 3,000,000 £78bn 300% keeping ahead of the competition in relation
to advances in technology. 400 £340.76m
economic value people employed value of the growth in Challenges remain, but John Cridland,
of the UK in the transport online retail mobile director general of the Confederation of £264.58m
transport and and food sector commerce British Industry (CBI), concluded: “We are 300
food distribution distribution in 2012 in 2012 beginning to see the return of organic
sector sector growth, with clear signs that firms offering
the right products into the right markets are 200
growing sales and expanding.” 2008 2009 2010 2011 2012
4 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 5
Economic overview: Home deliveries Van conversions
Supermarkets ready fleets Meeting the diverse needs
for online shopping battle of Britain’s van operators
Morrisons and Iceland launch operations to win significant share of lucrative market Manufacturer conversions provide enough variants to suit every imaginable need
O A
s the needs of Britain’s van
nline grocery sales are be conducted from Ocado’s recently- attempt to discover the most profitable fleet operators become Van operators
expected to double over the opened Dordon Customer Fulfilment Centre online food strategy. ever more diverse, the have a diverse
next few years from £5.6bn (CFC) in the Midlands, with customer The Co-op is looking to leverage its range of vehicles that range of vehicle
in 2012 to £11.1bn by 2017, deliveries through a Morrisons liveried fleet. existing fleet, which it uses to deliver baskets manufacturers offer to requirements
according to trade body IGD. The supermarket currently runs a fleet of of products bought in store and worth more meet these new demands
The sector is currently approximately 120 commercial vehicles, but than £25 to customers’ homes. has expanded to such an
dominated by Tesco, which this will substantially increase. Online sales still only represent 3.4% of extent that there are now
has an annual turnover By comparison, Tesco.com operates the £163.2bn grocery market, but experts variants to suit every imaginable need.
estimated at £3bn and a market share of 3,500 vans, Sainsbury’s has 1,500 vans on expect this to grow. These new entrants will Various manufacturers offer conversion
37.1% in 2012 – more than double that of its 3,150-strong fleet, and Asda’s fleet of hope to take advantage while existing options for their standard vans. For example,
its nearest rivals Sainsbury’s (17.4%) and 2,400 vehicles includes 1,300 vans. operators are keen to invest to strengthen Mercedes-Benz offers a choice of more than
Asda (17.2%). “This agreement is a significant strategic their position in the marketplace. 1,000 Sprinter models and variants.
However, that could be about to change step for Morrisons,” said Dalton Phillips, Tesco, for example, will invest £500m in The emergence of these manufacturer
with two further supermarkets launching Chief Executive of Morrisons. technology this year after reporting 13% conversions and off-the-shelf specialist
their own online offerings. “I’m confident that Morrisons.com will growth in online groceries. vehicles is good news for fleet operators.
Morrisons has announced a long-term grow to be an operation of real scale and Announcing a £1.6bn trading profit, They can now walk into a showroom and
agreement with Ocado, which will enable significance while creating meaningful Tesco’s Chief Executive Philip Clarke said: pick out the exact vans they want, without
Morrisons.com to commence home long-term value for shareholders.” “Despite continuing challenges, we have having to buy base vehicles and have them
deliveries by January 2014. Meanwhile, the Co-operative will start the made further progress on our strategic converted separately.
The Morrisons.com grocery website will first of four trials, each with a different priorities. However, experts say that around 30% of
have a clear Morrisons look and feel, but will delivery model, before Christmas in an “We have continued our focus on fleets are operating the wrong vehicles – Therefore, great strides are being made Sprinter, so having happy customers with the
becoming the leading multi-channel retailer. either ones that are too large, too small or between manufacturers and their dealer right vehicles on fleet is paramount to both
“Our online grocery businesses have are simply unsuitable for the job for which networks to ensure that when potential fleet our relationship and success.
“I’m confident that Morrisons.com will grow” continued to perform well, and we are now they were originally intended. buyers walk into the showroom, they walk “When you look at our chassis-cabs and
offering the service in more than 50 cities And once the wrong vans have been out with exactly what they need. body-build conversion process, we work with
Dalton Phillips, Chief Executive, Morrisons across nine markets outside the UK.” purchased, there’s no going back. They’ll be Mercedes-Benz offers bespoke solutions a number of body builders who we know,
Tesco.com launched in 1996 and the sitting on the fleet giving unsatisfactory for fleet buyers. Andrew Lawson, National trust and understand.
retailer’s scale and experience enabled it to service and wasting the company’s cash in Fleet Sales Manager, says: “Ensuring that the “This allows us to manage a customer’s
power ahead of rivals, building a network of the process. Then, at selling time, oddly- customer purchases the correct vehicle for vehicle and ensure that on completion both
Online grocery market share 2012 Source: Mintel six ‘dark stores’ (warehouses to serve online specced vehicles or conversions can be their operational needs is something that we the vehicle and body is as ordered and
customers), apps and international online difficult to shift at reasonable prices, thus guarantee our dealerships do every time. expected.”
operations to generate custom. increasing wholelife costs. “All of our sales staff sit a number of
Meanwhile, Sainsbury’s overtook Asda While buying the wrong vehicles is bad for internal courses that ensure they follow an
last year to become the second largest the fleet operator, it is not in the interests of exact procedure which results in us selling Everything you need to
online grocer, reporting annual sales of the manufacturers to sell them either. If that the correct vehicle for the job. know about van conversions,
nearly £1bn from 190,000 online shoppers. has happened, the operator is unlikely to use “We offer a wide and varied model range, visit: www.mbvans.co.uk/transport
It’s also investing millions into digital by to the same vehicle supplier again. from compact Citan through to our largest
delivering a core systems upgrade across the
business, opening its first dark store and
developing mobile technology to support
rapid growth.
Asda has also said it will invest £700m
New EU type approval laws mean safer vehicles for fleets
in online initiatives, while Iceland has The introduction of the new EU Whole certificate has been gained will Representations from parts of the
re-entered the online grocery market after Vehicle Type Approval laws in April require a new one to be sought at a industry led to a Van Enhancement
eight years away (see page 16 for details). changed the conversion world. cost of up to £5,000 and a lot of Scheme whereby items such as van
Under the laws, the whole of the administration. racking were removed from red tape.
Asda 17.2% vehicle must have a Certificate of This means that many of the old-style While the new rules have caused
Ocado 12% To find out why fleets Conformity (COC) before it can be sold conversion firms have disappeared as a challenge for manufacturers and
use Mercedes-Benz vans, and used. they can no longer simply take a base converters, it should mean safer
Sainsbury’s 17.4% Waitrose 3.9%
visit: www.mbvans.co.uk/transport Significant changes made after the vehicle and convert it themselves. vehicles for fleets.
Tesco 37.1% Others 12.3%
6 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 7
Fit for purpose
The right van will benefit
you and your customers
Vehicle choice can have a positive effect on image, service and your bottom line
T
he distribution of food
accounts for a quarter of all
This 50% increase in capacity has obvious
benefits for the business in reducing fuel
expect their vans to cover a typical annual
distance of around 50,000 miles. This does “An automatic
commercial traffic on UK
roads, so its impact on the
costs and the amount of time the van is
running empty.
vary markedly between vans delivering
around London and the more remote areas gearbox means less
network is massive. It also
means fleet operators in
Alex McKinlay, Iceland’s Head of Home
Delivery, says this has benefits for the
of the UK, but an overall mileage of 200,000
miles over four years is a normal expectancy
driver fatigue and
this sector have to consider
their options very closely to
customer, too, because the service provided
by the company is more reliable as the van
in this sector.
Wholelife costs for food distributors are as
helps us fulfil our
minimise that effect for environmental
reasons and for their own business reasons.
has to return to the distribution depot fewer
times during a shift.
important as any other sector of the van
market, but many companies in this industry
duty of care
While a large proportion of vehicles used
to distribute food around the UK are HGVs,
Again with flexibility in mind, some fleets
consist of a variety of different vans, mixing
also have to consider their brand image.
Because of this, the Mercedes-Benz Sprinter
responsibilities”
there is an increasing number of vans used larger vehicles with smaller car-derived vans has become the prime choice for many Alex McKinlay,
for more local deliveries and also for online for inner city work where the physical size of multi-drop and home delivery routes. Head of Home Delivery,
shoppers who want their groceries delivered a van can have an impact on its ability to Its strong residual values also hold great Iceland
to their doors. The uptake in online shopping work efficiently. appeal for fleet managers with their eyes on
has seen operators in this area add more This trying environment has also prompted wholelife costs. It helps counter the often
vans to their fleet, but fleet managers are some fleets to trial electric vans that do cited point that Mercedes-Benz vans are
also looking at ways to gain more capacity away with tailpipe emissions, though fleet more expensive to fund up front.
through selecting the right vans rather than managers are still wary about mileage range Rhys Thomas, National Transport Manager
just more of them. and battery recharging times. for Palmer and Harvey, says: “We have a
So what is the right van for a food If electric vans are proving a slow sell in tender process that looks at costs based on
distributor? One of the first considerations is the food distribution sector, automatic a five-year model and this longer period
refrigeration so the food being transported is gearboxes are growing in popularity. The brings vans such as Mercedes-Benz into
properly temperature controlled. option of an automatic gearbox is very the equation.
This means a decision has to be made attractive to many fleet managers: it lends “Over five years, this equates to a saving
between a standard panel van with basic itself to an urban environment where speeds of around £1,500 on each of our 300 vans.
refrigeration or a more specialised, are relatively low but stop-start traffic can As we have a combination of outright
coach-built vehicle on a chassis cab. mean increased driver fatigue. ownership and leased vans, those sorts of
For many of the industry’s larger McKinlay says: “We wanted a fully savings make a huge difference. However,
operators, a coach-built body is the way to automatic gearbox as part of our van choice just as importantly, the Sprinter projects an
go, but that still leaves the choice of chassis because it gives the driver the right tool for image about our business.”
cab to be decided. This is where the the job. It keeps the driver’s hands on the One of the strategic values fleet managers
perennial van user’s decisions about cost, steering wheel for greater safety and, when need to consider is future-proofing their vans
funding, fuel economy, weight limits and you are using the van for multi-drops, it against ever tighter emissions regulations.
residual values come into play. means one less thing for the driver to have to As Euro6 emissions laws concentrate on
Taking capacity first, most distributors in concentrate on. This means less driver NOx and SOx (nitrogen oxide and sulphur
the food sector favour a van with a weight fatigue and helps us fulfil our duty of care oxide) rather than CO2, vans that already
limit at the upper end of the scale to cope responsibilities.” meet these requirements are at an
with the coach-built body, refrigeration unit Similarly, a van with stop-start technology advantage.
and the load it will contain. While the weight also now holds more appeal for fleets looking Mercedes-Benz was the first to offer a
of the food being carried is not always that to reduce costs. This technology has been Euro6-compliant van range with its Sprinter.
great, especially with multi-drop online shown to lower fuel consumption by as much The food distribution business is a
grocery deliveries, the extra weight as 13% depending on where the van is used. specialised one, but when it accounts for so
allowance gives companies more flexibility. It’s at its best in city traffic, where the van many commercial vehicles on the roads,
Many food distribution fleets look to a is stationary for longer in traffic than a van making the right choice of van is essential.
3.5-tonne van to give them the versatility being driven on the motorway, so for
they desire, but even here care is needed. By multi-drop use in and around towns this can
switching to Mercedes-Benz for its chassis be a great boon to lower running costs. Is the Sprinter cheaper
cabs, for example, Iceland was able to move As always, fuel economy is a key to run than its rivals?
from a load capacity of 48 crates of consideration for any van buyer. In the food Visit: www.mbvans.co.uk/transport
shopping to 72 crates. distribution business, most fleet managers
8 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 9
All in.
The New Sprinter, Vito and Citan from Mercedes-Benz Vans.
Our complete range of vans are designed to meet your individual fleet needs.
Each vehicle comes with a comprehensive Mercedes-Benz support package
as standard*. Which adds up to lower whole life costs and reduced downtime.
Contact our Fleet Business Centre for full details today on 0870 120 1011.
A Daimler Brand
www.mbvans.co.uk/fn
*3 years’ unlimited mileage warranty, 24 hour roadside assistance and MobiloVan UK as standard, plus flexible, competitively priced,
fi xed rate Service Care plans. Terms and Conditions apply. Please contact the Fleet Business Centre for further details.
Spotlight on SME van operators
T
he SME sector – small to expanding home delivery market, where the have no supermarkets to build and run and why wouldn’t they for SMEs operating in the
medium enterprises which likes of Tesco.com, Sainsbury’s and low headcounts – SME suppliers typically same sector? The vehicles are competitive
typically have fewer than 250 Waitrose are jostling for market share, new, source high-quality foods and deliver them from a wholelife cost perspective, offer a
employees – is expected to smaller suppliers often specialising in to supermarkets, restaurants, specialist suitable payload and are sufficiently reliable
go through rapid growth in organic and gourmet foods are emerging as outlets and direct to the home. to operate a long working day in stop-start
the coming years. consumers order online for convenience Their biggest investment need is in the driving conditions.”
SMEs operate around and efficiency. light commercial vehicles and car-derived Mercedes-Benz can offer competitive
1.5 million vehicles and are Industry data suggests that the home vans used to deliver the products. finance terms tailored specially for SMEs to
purchasing more than 375,000 cars and delivery market has enjoyed double-digit Here, competitive total cost of ownership, meet these demands. Wholelife costs,
vans every year. growth in recent years and experts suggest reliability and fit-for-purpose are critical to residual values and vehicle reliability are
Almost half (44%) report that they have that consumer demand will continue at a the decision-making process. crucial to the calculations.
grown in the past 12 months, according to similar rate. Van manufacturers are increasingly Vehicle reliability is vital to all businesses,
BDRC Continental’s SME finance monitor. As demand increases, so does the need recognising the opportunities offered by the but especially so in the home delivery food
And just over half (51%), expect to grow
over the coming year.
for transport to deliver produce to
customers – and that means van sales into
SME sector, which too often in the past was
ignored by franchised dealers and left to
sector where potentially thousands of
pounds worth of food is at risk as well as Case study: Fruit 4 London
Prime Minister David Cameron has the sector are expected to soar further. leasing brokers to mop up. disgruntled customers if a promised delivery
recognised the need to support smaller Research by the Institute for Grocery Mercedes-Benz Vans, for example, has time is missed. Cost and ‘right-sizing’ vehicles to meet requirements would not be met if the
businesses by reducing red tape and Distribution (IGD) suggests that over the five recently formed a three-strong regional “SMEs, as the Government continues to critical business requirements are the number of drops increased. So we are
injecting investment. years to April 2018, the value of the online team focused on providing support to SMEs highlight, are the lifeblood of the UK key issues for Fruit 4 London, which is performing a daily balancing act
“Small businesses and entrepreneurs will grocery sector will increase 124% from and tailoring vehicle solutions for this economy, and through our investment we increasingly turning to electric vans to because it is critical to the success of
be the driving force behind the economic £6.5 billion in April this year to £14.6bn. specific sector. can help those organisations operating in the meet its needs. the business that we make deliveries
recovery,” he says. “Although online grocery is still in its The company has extensive knowledge of specialist foods sector to achieve their Launched in 2008, the company on schedule.”
“British SMEs are already doing infancy, it is evolving at a blistering pace,” the home delivery sector. It supplies the ambitions,” says Lawson. delivers fresh fruit and vegetables to Diesel has been the preferred
incredible things, but we urgently need says Joanne Denney-Finch, Chief Executive entire Iceland and Ocado fleets, and its almost 300 offices a day with plans to option; Mulato had previously looked at
more of them to follow that boldness.” of IGD, which says online is the UK’s fastest vans account for 95% of Sainsbury’s fleet. shortly introduce home deliveries. electric vans but ruled them out on
Nowhere is this boldness and growth growing grocery market sector with more Andrew Lawson, National Fleet Sales The two Hungarian friends who cost and range grounds. That was until
more apparent than in the specialist food than four in 10 people expecting to buy Manager for vans at Mercedes-Benz, says: founded the business started last year when offers and lower leasing
distribution sector. groceries online in the next five to 10 years. “These companies are using Mercedes- delivering fruit and vegetables on rates brought them within its budgets.
Hooked to the coat-tails of the rapidly With a relatively low cost of entry – they Benz because the vans work for them so bicycles, but success now means they One electric vehicle which would
operate a growing fleet of six vans fulfil Fruit 4 London’s requirements is
– three zero emission Renault Kangoo the Mercedes-Benz Vito E-Cell medium
To contact your regional Maxi ZEs, two Ford Transit diesels and van, which attracts a grant of up to
SME advisor, go to: a Volkswagen Transporter diesel. £8,000 under the Government’s plug-in
www.mbvans.co.uk/transport The electric vans are routed to scheme. It has a potential range of 80
deliver in central London from the miles and a payload of 775kg.
company’s East London base with the Fruit 4 London has undergone an
diesel vehicles serving customers in assessment with the Energy Saving
the Greater London area. Trust (EST).
All the vans have been acquired Via its Plugged-in-Fleets initiative,
from new on three-year lease purchase EST has calculated the company could
agreements and cover approximately save £9,000 per vehicle if it went 100%
12,000 miles a year. They are used for electric based on lower running costs,
multiple journeys to collect goods from 100% capital allowances, the
market and then deliver to customers. Government’s plug-in vehicle grant and
Rapid SME
Fruit 4 London co-founder and London congestion charge exemption.
director Laszlo Mulato says: “We have Mulato calculates the electric
a delivery window to meet for our vehicles cost £1.40 a day to charge
customers and that means achieving compared to £14 per day spent on fuel
the right balance in terms of each van’s and the congestion charge for the
growth drives
route, the number of drops and the diesel vans.
density of the orders. “Our dream is to run an all-electric
“The Kangoos are packed and fleet, but we need slightly larger vans
currently each one is capable of than the Renault Kangoo at the right
handling 60-70 orders. The diesel vans price,” he says.
UK recovery
are larger and are not currently full “The EST review showed us that
when making deliveries. going electric is the best business
“However, while a larger van could decision when expanding our fleet
carry more goods, the time slot based on impressive cost savings.”
Companies should base van choice on wholelife
“The EST review showed us that going
cost calculations to further boost buoyant sector electric is the best business decision when
expanding our fleet based on cost savings”
12 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 13
Running a reliable fleet
Look beyond upfront price to consider real costs Control of
maintenance is key
Van reliability and regular checks can reduce Should on-the-road assistance be to wholelife costs
required, the Mercedes-Benz MobiloVan
downtime – and boost a company’s bottom line
V
service can step in, including special mobility Wholelife costs, dealer performance
services in the event of a workshop visit and aftersales support are among
an fleets are focusing on The demands placed on a typical arising from a warranty claim or goodwill the key priorities when choosing a
‘progress through transport fleet were highlighted by gesture during the first three years after the van supplier.
partnership’ as they Parcelforce Worldwide this year, when it van was initially registered. Control of maintenance and
work more closely with estimated that its fleet of Mercedes-Benz These include the use of a taxi or public aftersales costs are key within
manufacturers and Sprinters covered a combined total of transport to a maximum of £55 (inc. VAT), wholelife costs.
suppliers to deliver their 139,500 miles in a single day. vehicle collection and delivery within a That means relationships with
business objectives. Last year, Mercedes-Benz retained the 30-mile radius, provision of alternative suppliers are important to ensure the
One of the most critical commercial vehicle supply contract with HSS transport within 30 miles of the dealer and a fleet is treated as a high priority –
relationships among van fleets is with their Hire, the tool hire and equipment company. replacement vehicle for up to three days. “the impact on downtime can be
manufacturer partners to match the right The vehicles play a critical role in the delivery In the first three years, MobiloVan UK will massive”, said one fleet manager.
vehicles to specific roles and also to ensure of equipment to customers. also cover misfuelling, lost or locked out A Sewells Research & Insight report
that they deliver on the suppliers’ promises. HSS trials have shown that Mercedes- keys, two or more flat tyres, accident, says: “It is not always the discount
This long-term view means that Benz vehicles are out on the road, rather vandalism and attempted theft. you get upfront; it’s about downtime
commercial vehicle fleet operators tend to than in a workshop, for twice as long as The breadth of services through and parts availability.
look beyond the initial price of a vehicle to other vans, offering better reliability and MobiloVan UK highlight an important “The amount of time a van is off the
consider the real costs that they will incur fewer maintenance issues. additional factor in maximising up-time on road can turn into a lot of money.”
during its operation. In addition, the use of ECO-Start in the commercial vehicle fleets – the driver, who Concerns among fleets include the
As one fleet operator points out, “if the Sprinters has led to a significant reduction in has the greatest direct impact on SMR costs. fear that multiple drivers per vehicle
wheels aren’t turning, the van’s not earning”, fuel consumption. may make it difficult to control
so ensuring it remains on the road and out of Aaron Powell, fleet manager for HSS, Reduce wear and tear unexpected costs such as damage,
the garage as much as possible is a key which operates more than 500 vehicles, and that reporting systems work on
requirement, particularly in the transport and including nearly 300 3.5-tonne vans, says: If fleets can encourage drivers to reduce different platforms which means
food distribution sector. “Reliability is really important. It is because wear and tear, this will be the most there may be no single source of
This point of view may be disrupted by of the type of vehicles that we operate. We straightforward way to minimise garage bills management reports to reach a
procurement teams, who sometimes struggle have quite specific model requirements, so and keep vehicles on the road. conclusion on wholelife costs.
to adapt to this more complex supplier we need reliable vehicles as we can’t easily Educating drivers to be sympathetic and
negotiation method, where a deal-winning obtain like-for-like replacements. Parcelforce Worldwide estimated that gentle with their vehicles is a proven way of
upfront cost masks potentially catastrophic
in-life performance issues.
“Therefore, if a vehicle lets us down, then
we let a customer down.”
its fleet of Mercedes-Benz Sprinters
covered a combined total of 139,500
reducing SMR costs.
In addition, careful drivers tend to use less
“It is not always the
However, fleets need to get the message
across that it is essential to consider the Lost days mean lost revenue
miles in a single day. fuel and have fewer accidents, so ongoing
training can keep maintenance bills down.
discount you get
support the fleet will receive to keep vehicles
on the road and minimise downtime when He adds that even if vehicles are reliable,
Drivers should also know the importance
of looking after their vehicles, with regular
upfront; it’s about
they require servicing.
Issues to consider include vehicle
there is still added pressure when it comes
to routine servicing, as lost days in the
checks of key areas such as oil, water and
tyres, particularly on high mileage and heavy
downtime and parts
reliability, parts replacement cycles and workshop are lost revenue for the business. wear fleets such as those in the transport availability.”
repair network performance issues, such as Powell adds: “We look at the network and and distribution sector.
opening hours, parts availability and the ability to arrange servicing out of hours, Tyres typically represent up to 40% of a Sewells Research & Insight
downtime, according to fleets. such as in the evenings and weekends.” vehicle’s maintenance budget and something
Unexpected costs in any one of these For Mercedes-Benz Vans, this is a key as simple as tyre pressure can affect fuel
areas can seriously affect profitability. reason behind its investment in a specialist economy by 10%. Driving on tyres that are
For example, in the parcel delivery sector, aftersales network within the 100-strong under-inflated by 20% could mean a driver
healthy profit margins before interest and tax dealer network. gets 26% fewer miles out of a set of tyres. Key areas to benchmark for
are typically 5-6%, according to analysts. A spokesman says: “The network offers This could be reduced further through harsh running a reliable fleet
A failure to properly assess a vehicle’s daytime, evening and overnight workshop acceleration, braking and cornering.
lifetime costs, including off-road times, can opening hours so vans can be serviced Fleets can maximise efficiencies through n Breakdowns
have a serious impact on the bottom line. without missing a vital day’s work.” the combined impact of reducing off-road n Warranty claims
In total, workshop opening times average requirements and having a strong service n Dealer network
96 hours a week, with 33% of those opening network partner, with a ‘right first time’ n Dealer opening times
“Something as simple 24 hours a day and 92% operating at least
two shifts a day.
mentality among technicians. n Dealer training
n Off-road time per vehicle
as incorrect tyre Among its customers is Parcelforce
Worldwide. Routine servicing takes place at
HSS Hire found Mercedes-
Benz’s ECO-Start technology To find out how 24/7
n Wholelife costs per vehicle
n Wholelife costs per mile
pressure can affect night to allow its Sprinters to keep moving
during daylight hours when most parcel
significantly cut fuel
consumption in its Sprinters
servicing boosts productivity,
visit: www.mbvans.co.uk/transport
n Driver performance
fuel economy by 10%” deliveries are made.
14 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 15
Case study: Iceland
Why Iceland turned its
McKinlay says the Sprinters will also play
an important role in delivering the desired
levels of service.
“From a customer point of view, we want
the drivers to arrive on doorsteps in a
drivers into ambassadors
well-presented manner and looking fresh
even after spending a long time in the
van so we wanted to have air-conditioning,”
he says.
“We also wanted to give our drivers an
automatic gearbox rather than a manual or
semi-automatic, and that also helped steer
Iceland invests in £250,000 Centre of Excellence to deliver ‘world-class’ service
T
us down the Mercedes-Benz path.
“We have gone from a van with a
he advent of online grocery To reflect the changing role of its drivers, Iceland has also agreed with Mercedes- manual gearbox and no air-con, to a
shopping has meant that, for Iceland has invested £250,000 to create a Benz to replace its entire home delivery fleet Mercedes-Benz with air-con and auto, and
Iceland, the role of a driver is
now about much more than
new Centre of Excellence at its head office in
Deeside, north Wales, to ensure they deliver
– which currently numbers 1,250 - with
Sprinter vans, with more than 300 new
the drivers have been very positive – they
appreciate the investment that is being
Case study: Ginsters
just making deliveries: drivers ‘world-class’ levels of customer service. vehicles being delivered this year. made in them.” Ginsters is not untypical in its four-year selecting our vans and we have found
are now ambassadors for the “We recognise the fact our online The vehicles are being supplied by McKinlay says the level of service cycle of use with Mercedes-Benz vans, the Mercedes-Benz Sprinter to be
supermarket chain. customers may never set foot in a store Mercedes-Benz franchised dealer Road delivered by Mercedes-Benz’s roadside with the food company’s fleet buyer excellent. We have gone from 17mpg in
Traditionally, customers or see a member of staff except for our Range, which is also supporting Iceland with assistance service package also played Gary Bound pointing out reliability our previous van choice to 19mpg with
always visited a store in person to buy drivers, so we want to make sure they are handover and driver training at Iceland’s a role in the decision switch to the plays a key part in deciding which vans the Sprinter. With driver monitoring,
their goods, either to take with them or for ambassadors for us,” says Alex McKinlay, Centre of Excellence. manufacturer’s vans. make it on to his fleet. that has improved even further to
home delivery. Head of Home Delivery. “We have tied the courses in with the The Sprinters will also be able to carry A van on the Ginsters’ fleet will 21mpg and with a consequent
With the company rolling out its new “Our Centre of Excellence is providing five-year-vehicle replacement cycle so 72 crates of shopping - 50% more than the average 200,000 miles in four years, reduction in accident rates too.
online shopping service across the country, two-day training courses for all our home day two is taken by a professional Mercedes- outgoing vans. after which the whole chassis cab and “Over the course of the van’s life
the only contact with a member of staff a delivery drivers with the first day about what Benz driver who goes through vehicle Earlier this year, Iceland chose Handsfree refrigerator body will be replaced. with Ginsters, those small
customer may have now is when their items they need to do to deliver world-class familiarisation and gives training on safe and and Roadsense as its vehicle telematics Bound says: “Economy and reliability improvements in fuel economy add up
are delivered. customer service.” efficient driving,” says McKinlay. provider to monitor its home delivery fleet. are of paramount importance when to significant reductions in cost.”
“We recognise our
Iceland has agreed with
Mercedes-Benz to replace its
online customers may Case study: Dairy Crest
entire home delivery fleet
never set foot in a store” Dairy Crest operates the biggest
fleet of electric vehicles in the
which includes 182 Mercedes-Benz
Sprinter models, is on a conventional
country, although it also has a more full maintenance leasing contract,
Alex McKinlay, Head of Home Delivery
conventional collection of diesel- except tyres which are on a separate
powered company vehicles. deal with ATS. The operating cycle has
The web-based system will help the Its 3,290-strong fleet includes been reduced from six plus one year to
company monitor driver behaviour such as 1,800 electric vehicles, ranging from five plus one – the one being the
speeding, aggressive braking and cornering, three-wheelers for tight urban streets option of a secondary lease if the
and help reduce fuel consumption and to refrigerated 7.5-tonne HGVs. vehicle still has a life left.
accident costs, says McKinlay. National fleet manager Sean Smith “It’s driven by age profile and to
“We have also fitted front-facing and estimates that the fuel saving achieved help manage dilapidation charges,”
driver-facing cameras to make sure we are by using an EV compared to a diesel Smith says.
protecting our drivers from any accusations alternative is “probably £80 per week” Crucial to ensuring life longevity for
by other road users,” he adds. on current fuel prices. every vehicle is Dairy Crest’s rigorous
“For example, on one of our sites we had Dairy Crest’s non-electric fleet, maintenance programme.
an allegation of a driver being abusive. In Vehicles with a gvw of 7.5 tonnes
many cases this could be just one person’s and above are inspected every six
word against another, but we were able to weeks; electric vehicles are inspected
view the video footage from the driver-facing every 10 weeks; 3.5-tonne vans
camera which proved the allegation was every 13 weeks; and car-derived vans
unfounded. every 26 weeks or sooner depending
“This was the first time we had to use the on mileage.
cameras for an incident like that and “Ultimately we’ve got to be
it was a very positive result for the driver compliant; there is no place for people
and company.” that do not operate commercial
vehicles in a compliant manner,” says
Smith. “If you have a 3.5-tonne vehicle
For more best practice Sean Smith: that is not inspected and maintained
case studies of van fleets, operates a properly, it’s a potential disaster
visit: www.mbvans.co.uk/transport 3,290-strong fleet waiting to happen.”
Extract of an article from Fleet News
16 I Van Fleet Insight I www.mbvans.co.uk/transport www.mbvans.co.uk/transport I Van Fleet Insight I 17
Case study: La Fromagerie
Image important Extracts from
Fleet News profiles Best before, during and after.
for La Fromagerie
● Company
Tesco.com The ideal van for every stage of your distribution process.
● Fleet manager
Dino Papas
● Fleet size 3,500 In food distribution the right packaging is vital. Our experts can help you specify modifications and
Tesco.com runs its van fleet on a
gross vehicle weights for your Sprinter, to build a fleet that not only delivers your requirements,
Cheese supplier wants to make the right impression five-year operating cycle, which it
believes is the optimum time. but also enhances your overall performance. For 5 vans or 500, we’ve got your ideal fleet all wrapped up.
“Any less than five years and the
To make an appointment, please contact the Fleet Business Centre on 0870 120 1011.
running costs and greater residuals
don’t make up for the repayment
costs,” Dino Papas says.
“Beyond five years, wear and tear
costs are simply too great.”
● Company
DHL Express
● Fleet director
Richard Crook
● Fleet size 1,520
DHL negotiates its vehicle acquisition
contracts at European level, leveraging
the group buying power. It operates
900 Mercedes-Benz Sprinters.
The agreement centres on
specification – size, capacity, internal
racking and equipment – with each
T
Van reliability and low running costs were high on La Fromagerie’s wish list country responsible for deciding
replacement cycles, funding methods
here is a temptation to stick reliability and low running costs. Its outgoing and manufacturer partners.
with what you know when it vehicles were fitted with petrol engines and “Commonality on specification is
comes to replacing vans on an LPG conversion to exempt them from the where the savings really happen,” says
fleet. However, London-based London Congestion Charge, but this no Crook. “It drives the cost down.
specialist cheese supplier La longer applies. “We use a wholelife cost model –
Fromagerie decided to extend “A diesel engine became a priority for that’s what everyone should look at.”
its search much further. economy, while reliability was also a major
Wholesale Manager Danny consideration,” says Michelson. “For this
Michelson was charged with looking for reason, we were attracted to the Mercedes- ● Company
replacements for the company’s two vans. Benz Vito with a refrigeration conversion Sainsbury’s
He says: “Our current three-year contract because of the size for driving in London plus ● Training manager
and finance deals were coming to an end, Mercedes-Benz’s reputation for quality.” Paul Gibbons
and our old vans had developed several Another deciding factor for Michelson was ● Fleet size 3,150
faults during their warranty periods so we a competitive finance agreement from Sainsbury’s uses a ‘data test’ to ensure
didn’t want to keep them after their Mercedes-Benz and the excellent dealer it recruits the best drivers for its home
warranties had expired.” service from Mercedes-Benz Brentford. delivery fleet. It forged a partnership
With a need to deliver organic and artisan He says: “Alex Karas, the LCV Business with AA DriveTech which created a
cheeses, plus freshly-made bread, jams, Development Manager, has been superb to database of driver information.
chutneys and cakes, daily across London deal with. This enables it to test applicants prior
from a central hub to wholesalers and the “The deal included a discount for the to a formal job offer. Almost a third of
company’s own shops, La Fromagerie needs two vans we’ve purchased and good part- the people who want to be a driver on
exchange for our old vans. The new vans have its fleet fall foul of the test, reducing
an impressive list of standard equipment.” potentially costly recruitment mistakes.
“The Vito is in keeping Michelson says another benefit of opting
A Daimler Brand
for a Mercedes-Benz van is the prestige
with our company’s badge that is in keeping with La Fromagerie’s
image. “The Vito is in keeping with our For more information on
brand identity” company’s brand identity and, like us,
Mercedes-Benz has quickly delivered a
Mercedes-Benz vans
visit: www.mbvans.co.uk/transport
Danny Michelson, La Fromagerie made-to-order service,” he adds.
18 I Van Fleet Insight I www.mbvans.co.uk/transportwww.mbvans.co.uk
Fleet Business Centre
0870 120 1011
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