As we all know, General Electric (GE) has exited the fleet management industry after a three-decade presence, which started in 1984 when GE Credit Corp. purchased Kerr Leasing, a small family-owned leasing company in Englewood, Colo. What is not well known is why GE entered the fleet management industry in the first place. Here is the prologue or “back story” that was the catalyst to GE’s entry into the fleet business.
“Total fleet management” is a generic, shorthand term used to refer to programs offered by FMCs that administer all aspects of a client company’s fleet operations. Have you ever wondered about the origin of this concept? You might be surprised to learn that IBM was one of the initial catalysts leading to the development of today’s total fleet management programs. This might surprise some in the fleet industry, because for the longest time, IBM has been the poster child of driver reimbursement.
Merger mania is hitting the fleet market once again. We’re hearing about potential OEM consolidations and we now have Element Financial Corp. expanding its foothold in the U.S., with the acquisition of GE Capital Fleet Services on the heels of its recent purchase of PHH.
More than 1,000 inspections per hour in North America are being conducted in a 72-hour period. Some small fleets may not know that the regulations covered in the inspections apply to them.
Stable fuel prices were the primary reason fleet costs remained flat. Also, national accounts did not increase prices for oil changes and replacement tires. Maintenance costs were up for fleets that extended vehicle cycling.
It will become more expensive to operate a fleet in the coming years. Vehicle acquisition costs will increase. Fuel prices, in all likelihood, will trend upward and maintenance costs will ratchet higher due to more companies adopting extended replacement schedules. In addition, vehicle-related taxes will increase. Let's examine the dynamics that will force fleet expenses to escalate.
The annual survey is open to private and public sector fleet and environmental managers.
In the commercial fleet industry, the most common amortization rate used for establishing a depreciation reserve is 50 months. Recently, some major fleets extended amortization rates on new-vehicle orders.
According to industry analysts, most vehicle segments increased in vehicle depreciation in 2009 due to such factors as extended replacement cycling, shifts in the wholesale vehicle market, and higher capitalized vehicle costs.
Fuel costs, the largest fleet operating expense, declined dramatically in the 2009 calendar-year due to a sharp decline in worldwide consumption. Also, many fleets have downsized, which contributed to a lower overall fuel spend.
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