Setting industry benchmarks – report on the LAPV round table debate

Published:  10 December, 2013

After several in-depth discussions with suppliers and manufacturers in the municipal specialist vehicle sector at recent trade shows, LAPV organised an industry round table event – held at the end of August. Several leading companies took part in what resulted in an animated discussion that revealed essential insights, as well as highlighting key issues relevant to everyone active in public sector fleet management. Ann-Marie Knegt reports.

On January 1, 2014, Euro VI engine legislation will come into force, and the new standard will have wide ranging implications for anyone involved in the building, supplying and purchasing of fleets. Obviously a standard that prescribes cleaner engines with lower emissions should be seen as a beneficial development, but the prologue to the new legislation has not been without its glitches for specialist vehicle manufacturers, which has had massive implications for end users in local authorities and contracting organisations.

The discussion kicked off with the fact that there has been severe confusion about the availability of compliant chassis over the back end of this year.

‘On one side the phasing out of Euro V chassis, and having bodies mounted on them – and to get these vehicles registered before the end of December 2013 – has been a real frustration for us, since we could not get enough chassis in time from some of our suppliers,' commented one of the delegates.

‘On the other side there was the lack of availability of Euro VI chassis to build up stock for next year's production. Both issues have been particularly challenging. Fortunately, we have managed to satisfy our customer demands for Euro V chassis and have enough Euro VI stock to have a downscaled production next year. However, information about as and when compliant chassis would become available has been very limited.'

Other specialist vehicle builders have had very similar challenges during 2013. Due to the lack of Euro VI chassis, there was also a subsequent information gap on how they would actually perform, because obviously when building specialist vehicles such as RCVs or sweepers it is essential to know that a chassis is right for the application, in order to iron out any potential problems.

Key elements such as PTO – Power Take Offs – are very important, and there are no benefits in buying a large volume of stock chassis only to find out that it is not right for the body. ‘Luckily,' said another delegate, ‘we have now found out that the Euro VI chassis works with our bodies. On the other hand, from our customers' point of view there is still a lot of education required, because there is an additional cost to Euro VI chassis. In many cases this extra cost is still regarded as a surprise by some local authorities, even though this fact has been well advertised over the last 18 months.'

Other bodybuilders agreed that communication could have been better. One of the delegates pointed out that his company had taken this into account for this specific reason, had made a conscious effort to stay in contact with the chassis dealers at all times in order to handle the surge in demand for Euro V chassis before the end of the year.

The same delegate added that handling Whole Type Vehicle Approval had also become more complicated due to the incoming new engine legislation. ‘As a body builder, we are the last link in the chain that gets to see the vehicle before it is delivered, so you have to get all three certificates in conformity, and this has been particularly difficult.'

Fuel consumption by Euro VI chassis was raised as a topic by another participant, who had experienced that many of his customers were bidding for contracts on municipal tenders but had no clear idea of what the fuel consumption of Euro VI chassis was – as fuel accounts for 40% of the cost on a waste collection round. ‘My clients in the body building industry were all pointing out that they required Euro VI demo trucks in order to get an idea of what these vehicles delivered in fuel savings. If the fuel consumption turns out to be higher than with Euro V engines, then the vehicles will not deliver a return on investment for prospective clients.'

Another delegate with a contract hire industry background pointed out that many of his clients wanted to replace their contracts with Euro VI, but due to chassis not being available many were forced to extend their existing contracts.

Someone then asked whether the contract hire industry expected the majority of its customers to extend contracts instead of opting for Euro VI or change?

‘Nobody has ordered 10,000 extra chassis, because they are not currently available. This means that the client expects us to absorb the extra cost of extending the life of the fleet. So I fully expect that many will extend existing contracts over the next half year.'

All delegates around the table were anticipating a lull in manufacturing as a direct result of the lack of Euro VI chassis. An attendee emphasised that things will probably not become as bad as they may seem. ‘Euro VI is just an evolution, just as Euro IV and Euro V were in previous years. This perceived period of reduced production probably will not last very long, since Euro VI chassis will be more than likely be abundant by March next year.'

‘The problem associated with extended contracts is increased maintenance costs, which could be somewhere along the same range as actually converting to Euro VI,' one delegate pointed out. ‘The new legislation is a change that we all have to get used to and eventually in 12 months time we will all be sat around this table again, set for Euro VII.' (Note, there are currently no plans to implement a Euro VII standard).

Participants agreed that it came down to the same principle again; the reluctance of some organisations to look further than capital cost. Savings for extending existing fleet contracts are hard to quantify, but while there is a difficulty in supplying the actual vehicles, it should also be taken into account that build up time of specialist fleet is also quite long.

Vehicle manufacturers should keep in mind that technology is becoming increasingly more complex, and that a conscious effort should be made to educate operators about this.

Austerity measures were also mentioned as a big issue, and it has become clear that manufacturers have to add value and provide more references than ever, before a purchasing decision is made. Contracting organisations were deemed by the delegates as considerably rapid in their procurement decisions if funding was readily available, local authorities on the other hand were perceived as taking a long time to make purchasing decisions.

On the matter of alternatively-fuelled or eco-friendly vehicles, delegates had noticed that there was still apprehension within many local authorities to take on new technologies, mainly due to the initial capital investment required for the implementation of this type of kit.

The example of electric bin lifts was raised. ‘It has taken us two years to convince our customers that electric bin lifts can deliver considerable savings. Things are simpler now because we can provide them with 15 to 20 user references, which prove how effective they are.'

The provision of good references was deemed as the key for winning business in the current climate. One delegate asked: ‘Why is there still so little information shared about good practice between local authorities?'

There are several local authorities that are very progressive when it comes to supplying information on working practices in fleet management. It was especially felt that the PATN (Public Authority Transport Network), set up by Phillip Clifford, Fleet & Technical Manager at Forest Heath District Council and St Edmundsbury Borough Council, was instrumental in promoting examples of best practice between local authorities. However, it was a common belief with the participants that there were many public sector organisations that kept their ways of working ‘under cloak and dagger' for political reasons. This also highlighted the lack of a unified strategy for public sector fleet management in the UK, which makes procurement increasingly difficult, since the differences in approach all over the country are so large.

‘I do not believe in a generic tick-box philosophy for tenders,' said a delegate. ‘We are talking about specialist equipment here. However, it seems that many of the frameworks currently in existence in the UK have not evolved with the times, and I have no idea what the reason behind this is. Procurement has become too complicated for manufacturers and customers alike.'

Other delegates added that frameworks currently only offer the benefit of speeding the process up for the client, but offer very little advantage for the manufacturers. At the same time, the purchaser pays a rather large levy for shortening the tendering process from six months via the OJEU (the Official Journal of the European Union) to four weeks via a framework. Questions could also be asked about the effect framework procurement could have on the quality of the outcome of the tender, and whether it deprived the tendering process from innovation.

One person pointed out that joining a framework was one thing, but rejoining was just as much work from a manufacturing perspective, since the whole process had to be carried out again.

Most public sector clients in this climate want to work with a prime contractor, who will carry all the risk. However, because the prime contractor has to manage all the subcontractors involved to bid for a contract to manage and/or supply fleet, it means that everyone in this structure has to supply the most accurate information possible, in order for the prime contractor to even win a tender, let alone after it has been awarded the tender.

All present also agreed that manufacturers and service providers themselves have not been exactly forthcoming in cross referencing and getting together to address industry challenges. ‘Should we all join together in a forum like we are in today, highlight key issues and communicate clearly what we are dealing with to the responsible government organisations? We are all telling the same tale,' suggested a participant.

Subsequently, much of the responsibility for supplying unbiased information was placed on media, mainly the print and web-based trade press. The instigation of a benchmark for specialist fleet was also welcomed by the representatives. ‘Education is key,' said one delegate. ‘People need to be educated about what they need, how to use it, and the costs of this. Too many times we have been blinded by legislation. We should all work together to clarify these issues. It would be great if we had a platform from which we could operate together and work towards one standard. We are currently wasting too much time interpreting legislation on an individual level.'

Trade shows were found to be effective in showcasing products and conducting networking, but it was felt that attendance in general was dropping, since it was increasingly more difficult for people to leave the office in the current climate. Trade press was again emphasised as key for conveying messages to the public sector.

All of the attendees agreed that a forum such as this, in which several action points could be agreed and could then be taken to market, was an ideal way of improving standards in industry.

‘This forum is good because manufacturers and suppliers can be completely honest about what is bugging them and what they need to do in order to go forward. However, you can sit down a 100 times and discuss things, but if we don't do anything about it, it will have no use,' a delegate concluded.

Attendees:

Graham Howlett, Johnston Sweepers

Kate Lloyd, CMS Supatrack

Jason Airey, CMS Supatrack

Graham Bond, Hemming Group

Christine Foxley, Geesinknorba

Rob Colby, Terberg Matec

Jason Pidgeon, LAPV

Jon Siviter, Riverside Truck Rental

Mark York, Powelectrics Limited

Ann-Marie Knegt, LAPV

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LAPV (Local Authority Plant and Vehicles) is the only UK information source purely dedicated to local authority vehicles and affiliated plant equipment. Appearing four times a year, it offers well-researched technical articles on the latest equipment/technology as well as in-depth interviews with key industry professionals. More...

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