Although managing a fleet within a corporate environment is challenging, many businesses don't see the need for a full-time fleet manager until they get close to the 100 vehicle mark. This is despite the complexities of fleet management, with expanding regulatory demands adding to existing logistical and organisational requirements. In addition to this, as businesses seek increased asset utilisation, and reduced running costs, an additional level of expectation is added to the management of their business fleet.
This is where fleet management organisations (FMOs) come in, with their outsourced support across all aspects of the fleet lifecycle (acquisition, finance, management and disposal) able to offer clear benefits to an under pressure fleet manager. In our recent Corporate Fleet Insights research, we explored FMO usage by Australian businesses, seeing the extent to which they are tapping into these services.
As can be seen in the chart below, more than half of the organisations with fleets of 20 or more vehicles have an FMO relationship, increasing to two thirds of those operating 200 vehicles or more. This high level of penetration is what we expected to see, with the greater surprise being the one in three large corporate fleets managing their vehicles completely in-house.
What this doesn't tell us however is how big a market fleet management is in practice. Luckily, there are sources we can use to track this down. Since the integration of AFLA into the Australian Finance Industry Association, this data hasn't been officially published. A number of the large FMOs are however publicly listed companies, meaning information can be tracked down in annual reports, and other company updates. As shown in the chart below, the top ten FMOs are responsible for around 750,000 vehicles across the ANZ region. While SG Fleet are in front, the top five are largely comparable, at around 100,000 vehicles each, demonstrating the competitiveness of this market.
What's interesting to point out though, is that this is all still largely focussed on fleets with 20+ (and often 50+) vehicles. Despite businesses with smaller fleets operating almost 1.3 million vehicles, FMOs haven't to date been able to consistently and cost-effectively deliver services to these businesses.
To find out more about the current state of the Australian FMO marketplace, you can contact Ben Selwyn directly.