Rob Hill: ARI’s Unique Approach to Global Fleet Management

What are the glob­al objec­tives at ARI?

We are look­ing to meet the needs of our clients who are grow­ing glob­al­ly and to intro­duce our unique approach to fleet man­age­ment to mar­kets where we see the oppor­tu­ni­ty to do so. ARI has had a plan in place for quite some time with regard to the Euro­pean mar­ket based on cer­tain oppor­tu­ni­ties we had iden­ti­fied. We believed that because of trans­paren­cy con­cerns, there were poten­tial cus­tomers look­ing for the kinds of inno­v­a­tive prod­ucts and ser­vices we are able to offer. So, we focused our efforts on find­ing oppor­tu­ni­ties that would com­ple­ment our company’s unique cul­ture and would allow us to build a foun­da­tion upon which we could begin to intro­duce our tech­nol­o­gy-dri­ven suite of prod­ucts and ser­vices to the mar­ket­place.

Our first tar­get­ed acqui­si­tion was Fleet Sup­port Group in the UK in 2011. The inte­gra­tion of that com­pa­ny, now known as ARI Fleet UK, has been extreme­ly suc­cess­ful because they had a cul­ture and a cus­tomer-cen­tric approach to fleet man­age­ment that was sim­i­lar to ours. That was very impor­tant to us. As you know, ARI is focused around peo­ple, process­es and tech­nol­o­gy, with the num­ber one pri­or­i­ty being our peo­ple. In the UK, we found the right peo­ple to bring the tech­nol­o­gy and process­es to the table, fur­ther enhanc­ing the syn­er­gies between our com­pa­nies.

We also recent­ly acquired Fleetlev­el+ and HPI Fleet & Mobil­i­ty in Ger­many. Like ARI Fleet UK, both of those com­pa­nies were a fit cul­tur­al­ly for us because both placed an empha­sis on their peo­ple and on their cus­tomers. We feel that these acqui­si­tions, in tan­dem with our pres­ence in the UK, will give us the strate­gic lever­age we need to con­tin­ue to meet our clients’ glob­al needs.

What is your role?

In terms of our recent acqui­si­tions, I was for­tu­nate enough to be select­ed by the senior man­age­ment to help iden­ti­fy com­pa­nies that fit in terms of our company’s cul­ture and our approach to rela­tion­ship man­age­ment. That is very sim­i­lar to my nor­mal role, so it was not unusu­al for me to help in build­ing the rela­tion­ships and cre­at­ing a plat­form that allowed our team to take the lead when the time was right with regard to the acqui­si­tions. My oth­er role, obvi­ous­ly, is man­ag­ing ARI’s glob­al con­sult­ing busi­ness and work­ing with our Glob­al Fleet Alliance part­ners, among oth­er things.

What are some of the issues you see ris­ing in glob­al fleets right now?

In Europe, the big oppor­tu­ni­ty is increased trans­paren­cy. This is a focus that has been increas­ing for a while and we think it is going to con­tin­ue.

I think that financ­ing options will also begin to diver­si­fy in the future. We are pre­dict­ing that com­pa­nies are going to begin to look beyond closed-end leas­ing – and, in fact, some of them already have. Some of them have cho­sen to self-fund their fleets with a cap­tive leas­ing com­pa­ny. Oth­ers are look­ing to the fleet man­age­ment com­pa­nies to help them with both acqui­si­tion and resale, among oth­er things – essen­tial­ly, they’re seek­ing help with the life­cy­cle of their fleet, not just the financ­ing. We ful­ly rec­og­nize that oper­a­tional leas­ing will con­tin­ue for the fore­see­able future, but it’s like­ly that alter­na­tive options will increase.

What is dri­ving this quest for trans­paren­cy?

Cur­rent­ly, when a fleet or sourc­ing man­ag­er makes a leas­ing deci­sion in Europe, the quote they are eval­u­at­ing is only good for approx­i­mate­ly 30 to 90 days and it may change after that because of the risk being tak­en by the leas­ing provider. This cre­ates a tough sit­u­a­tion for Euro­pean deci­sion mak­ers, how­ev­er, both in terms of decid­ing which provider is the best for them and deter­min­ing if the option that provider is offer­ing is the best option for their fleet. If a com­pa­ny had the abil­i­ty to see mul­ti­ple bids at one time, then the options become more trans­par­ent and the end deci­sion more sound. One of the rea­sons we acquired HPI Fleet & Mobil­i­ty was the abil­i­ty to offer a mul­ti-bid­ding prod­uct to the mar­ket­place.

I think anoth­er fac­tor that is dri­ving the grow­ing inter­est in trans­paren­cy is the increas­ing aware­ness of how financ­ing is done else­where in the world. Many com­pa­nies are begin­ning to think about how their fleets are financed, par­tic­u­lar­ly with regard to who takes the risk and how that is done. Com­pa­nies, espe­cial­ly mul­ti-nation­al com­pa­nies, know that in North Amer­i­ca, depend­ing on the type of lease that you nego­ti­ate, there is sig­nif­i­cant­ly more trans­paren­cy because of the way the leas­es are struc­tured. A com­pa­ny can make one deal for a set peri­od of time – say, three years – and that will secure what the rates and the over­all terms will be for that peri­od of time. The com­pa­ny does not need to be con­cerned that that deal will change. That is not the case in Europe today, and I think there are some com­pa­nies begin­ning to con­sid­er whether the time is right for a change. We agree and believe there will be a mar­ket for more trans­par­ent solu­tions going for­ward.

I think there is also the poten­tial to cre­ate more trans­paren­cy in the mar­ket through the unbundling of leas­ing and ser­vices.

Where are the emerg­ing mar­kets for fleet man­age­ment?

There are a lot of coun­tries where the per­cent­age of fleet vehi­cles on the road is sig­nif­i­cant­ly small­er than in Europe or the US. Take Chi­na as an exam­ple. Less than one per­cent of their vehi­cles are part of a fleet – and it is the largest car mar­ket in the world. We believe that is going to change over time. I think mar­kets like Chi­na and oth­er Asian mar­kets are very excit­ing because the pos­si­bil­i­ties are end­less. In Chi­na, you have com­pa­nies with thou­sands of sales peo­ple who cur­rent­ly have no vehi­cles – mobil­i­ty comes through taxis and oth­er forms of trans­porta­tion. But, taxi rates are going up and the expec­ta­tions of Chi­nese employ­ees are going up as well. As that mar­ket evolves and the mid­dle class emerges, their expec­ta­tions will change as well. Employ­ees with a need for trans­porta­tion will come to expect vehi­cles just as they are expect­ed in oth­er parts of the world, and the grow­ing mid­dle class will come to expect the kinds of goods and ser­vices that are com­mon in oth­er regions of the world as well. And as this hap­pens, the vehi­cles will fol­low along and the fleet mar­ket will grow.

The Euro­pean econ­o­my has faced enor­mous chal­lenges over the past few years. How have fleets adapt­ed?

I think the chal­leng­ing econ­o­my has cre­at­ed some ratio­nal­iza­tion around fleets in Europe, espe­cial­ly with regard to perk vehi­cles. It is a lot eas­i­er to start mak­ing deci­sions around perk vehi­cles when the econ­o­my is tough and peo­ple are will­ing to hold onto their jobs and not be quite as demand­ing. This has prob­a­bly hap­pened less in Ger­many because of the works coun­cil and the fact that the coun­try has remained in a rel­a­tive­ly strong posi­tion despite the chal­leng­ing econ­o­my. But, over­all, I think you have seen com­pa­nies mak­ing deci­sions around perk vehi­cles as a result of the bad econ­o­my.

I think you also see a lot of change around staffing – things have become more cen­tral­ized. The econ­o­my has caused many Euro­pean com­pa­nies to exam­ine how they can reduce their over­all head­count and many have cho­sen to cen­tral­ize many of their func­tions, includ­ing fleet. As a result, the num­ber of local fleet man­agers and coor­di­na­tors has decreased.

What do you think is the val­ue of vis­i­bil­i­ty?

There was an inter­est­ing sur­vey about two years ago, where a lot of peo­ple did not see report­ing as that impor­tant. That has total­ly changed. Those same indi­vid­u­als have all moved to “it is impor­tant” or “it is very impor­tant”. That is a very good change because I believe that suc­cess­ful fleet man­age­ment must be focused around three things: one is vis­i­bil­i­ty. The oth­er two are trans­paren­cy and con­trol.

With­out vis­i­bil­i­ty – with­out the abil­i­ty to take in all of the data a fleet gen­er­ates and turn that into action­able infor­ma­tion – you real­ly can’t do any­thing mean­ing­ful. You can’t make deci­sions about your bud­get if you don’t have an accu­rate under­stand­ing of where your costs are. You can’t make deci­sions about acqui­si­tion or main­te­nance or resale if you don’t have a true pic­ture of your fleet at that moment. You can estab­lish poli­cies and pro­ce­dures with­out under­stand­ing what you have and how well it is oper­at­ing. Vis­i­bil­i­ty is crit­i­cal to solv­ing all of those chal­lenges, and I think you are going to see an increas­ing demand for it, which in the end is good because vis­i­bil­i­ty is the foun­da­tion of any well run fleet.

You par­tic­i­pat­ed in NAFA’s Inter­na­tion­al Fleet Acad­e­my last fall. What was your expe­ri­ence at the event?

This was an awe­some oppor­tu­ni­ty. In our indus­try net­work­ing is more impor­tant than any­thing else. It is a niche with­in indus­tries and in that type of sit­u­a­tion what­ev­er you can learn from your peers is absolute­ly vital. It stops you from repeat­ing mis­takes they have made. I think asso­ci­a­tions like NAFA and con­fer­ences like this bring that to the table.

From my per­spec­tive, putting myself in the fleet man­agers’ shoes, it is absolute­ly vital. I think that the size of this con­fer­ence was ide­al for those types of con­ver­sa­tions to take place with­in the group, and I was pleas­ant­ly sur­prised by how many peo­ple spoke up, giv­ing their opin­ions, and chal­leng­ing ideas.

From a supplier’s per­spec­tive, con­fer­ences like this are awe­some because you get to hear first­hand from fleet man­agers what their con­cerns are and you get a sense of where the indus­try may be going. At the end of the day, no one group, com­pa­ny or indi­vid­ual has all of the answers. Con­fer­ences like this give sup­pli­ers the oppor­tu­ni­ty to lis­ten to the indi­vid­u­als who man­age fleets day in and day out, which helps us to under­stand their needs and their chal­lenges. This, in turn, helps us to shape our prod­ucts and offer­ings so that we can be respon­sive to their needs.

So, no mat­ter whether you are a fleet man­ag­er or a sup­pli­er, this was a valu­able expe­ri­ence. I always find val­ue when­ev­er I have the chance to attend these kinds of ses­sions. I do a lot of them all over the globe and each time I learn some­thing and hope­ful­ly I am able to give some­thing back.


Rob Hill is the Direc­tor of Glob­al Sales and Con­sul­ta­tion for ARI. In that role, he leads the ARI Glob­al Con­sult­ing team with prac­tices in Asia, Europe and the Amer­i­c­as. He also main­tains and evolves ARI’s glob­al part­ner­ships with lead­ers in Africa, Asia, Aus­tralia, Europe and Latin Amer­i­ca, and over­sees ARI’s place­ment of vehi­cles in emerg­ing mar­kets.

He has a BA in Account­ing from the Uni­ver­si­ty of Wash­ing­ton and an MBA from Thun­der­bird School of Glob­al Man­age­ment. He has been with ARI since Octo­ber 1996.




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