Fleet Integration | Mergers and Acquisitions
Fleet Integration can be challenge as it may impact of employee terms and conditions or require approval from unions or works councils.
Whilst the process can be difficult it also represents a great opportunity to revisit the fleet strategy to make sure the fleet fits the needs of the organisation both in the short and longer term.
The integration of two fleets represents an opportunity to review the overall fleet strategy for the combined entity. This can bring the best practices from both organisations into the new business. Combining a fleet will also bring opportunities for reducing the overall size of the fleet through more efficient use of assets.
Where businesses are fully merged into a single operating entity it is likely driver grades will need to be aligned. In the short term this will create a two-tier system until all vehicles have been replaced under the new policy. Employees could have protected rights in respect vehicle selection which adds a further complication.
It is likely there will be differences in vehicle choice lists. Decisions will need to be made on which vehicle manufacturers will be carried forward and variations in vehicle policy documentation needs to be mapped and aligned. The timeline for implementation is likely to be aligned at the same time as other benefits such as pension, bonus and holiday entitlements.
Do you keep existing supply chain solutions or look to move to a completely different model? Existing suppliers will be keen to access the whole combined fleet so it is an ideal time to put existing suppliers into competition against each other. The combined entity will have more bargaining leverage across the supply chain which can be used to increase commercial benefit
The benchmarking of pricing and commercial terms is very useful starting point to understand how to unlock additional value. Central to this will be any existing contractual commitments in existing agreements which may dictate the timing of any change of supplier.
Tax and Funding
What is the optimal funding method for the vehicles and has this changed because of the corporate transaction? Private equity investments for example, may increase the focus on EBITDA measures which may favour a purchase based funding method.
Duplications of administrative resource, contract management and fleet management systems could exist? The combined fleet could be reduced as there are too many vehicles for the combined entity?
Process map the fleet to identify efficiency opportunities through economies of scale or deployment of digital solutions. Create an implementation plan providing detailed steps necessary to make the changes.
Some of combined business is likely to have a new brand which will require new livery. New branding can be phased in over time or pro-actively re-branded before they are replaced.
The data from both fleets should be combined, cleansed and reviewed. This can highlight areas of risk or opportunities for efficiency savings.
How does the geographical nature of the fleet impact on the supply of services? Is the approach to the fleet integration local, regional, or global in nature?
How Can EVP Help?
Tell me how to do it
EVP can quickly identify a streamlined vehicle strategy to support the fleet integration. The strategy is mapped onto a plan which identifies key activities, timings and potential benefits.
Do it for me
EVP can run the fleet integration process for you utilising a robust and proven project management approach. This covers all areas of fleet operations and supporting supply chain without impacting on your drivers.
If you would like to know more about how we can support your business then please