Aim is to gain ‘trusted advisor’ status with customers to look after all aspects of fleet and vehicle ownership
Custom Fleet is transforming into a focused commercial vehicle services provider as new owner Element Financial Corporation looks to bolster its overseas operations.
Element gained Custom Fleet in June on GE Capital’s surprise withdrawal from the finance space.
Element executive vice president James R Halliday, who is in charge of global alliances, tells ATN his firm is looking to use its expertise help the local arm bring its whole-of-truck-ownership model to fruition.
“Trucks is in our blood – I mean, 80 per cent of our portfolio in North America is America light trucks and up,” Halliday says, adding that 8 per cent is in heavy trucks.
While not ignoring smaller vehicles, Element sees more scope for doing business in added services, from fleet analysis, vehicle speccing, testing and buying trucks to efficient running of vehicles and components, maintenance and repair, to, eventually, the sale of the used vehicle.
In North America, this has stretched to building gas-powered trucks and specialty vehicles for the likes of Air Liquide, Halliday says.
“It’s all designed to lower the client’s cost of ownership, raise the asset productivity, the driver productivity in those vehicle and, obviously, do it in the safest way possible,” Halliday says.
With customer demand, including from non-freight fleet owners, increasingly moving towards outsourcing all fleet matters, Element has moved to beef up its team of independent industry experts undertaking the work.
This may involve a full fleet order or pilot order involving just a couple of vehicles.
Asked how original equipment manufacturers (OEMs) view its intervention, Halliday says they welcome it and cites close work his firm has done with Freightliner in fulfilling an Anheuser–Busch order in August, where the brewer replaced a 97-prime mover diesel fleet in St Louis with CNG-powered vehicles.
“We’re unbiased as to what truck it is because we’re accountable to the customer at the end of the day,” Halliday says.
“But what they [OEMs] get is a better technical relationship generally and we can get the entire job done faster and better than with the client directly.”
This might be when the client knows the objective but not how to translate that into the specifications, he adds, insisting Element views OEMs as strategic partners.
And Element looks to take the client relationship further, using relationships with repair workshops and telematics to reduce down time and bringing IT to bear on efficient running.
Two weeks ago, the group announced a US$70 million (A$100m) investment in IT, including predictive analytics for its fleet technology solutions and applications aimed at developing a state-of-the-art platform effectively doubling its existing capacity.
This investment will be matched in Australia with a $50 million IT investment with software firm Bynx that should be ready early in the first calendar quarter of next year, Custom Fleet Australia & New Zealand CEO Aaron Baxter says.
This is part a strategic repositioning of the firm to gain more exposure to the commercial vehicle market, which its research indicates has five times the growth rate of the ‘tools of trade’ sector, with a bespoke service offering relevant to individual company situations.
Baxter says his firm was moving towards greater service depth earlier but once the direction was cemented, the company appointed ex-GE Capital commercial sales and strategic insights manager Fulvio Fattore to build the local team to “essentially replicate the model with Element”.
Confident that the model does not exist elsewhere in the country, it has been tapping the market to bring in both originator resource and in-life management resource with the same goal.
It is taking a consultative approach to the commercial space with customers with a view to forming a “trusted advisor” relationship.
“We want to be fully integrated into our partner’s business model, where out trucking expertise is at least as required as our leasing expertise,” Baxter says.