FLEET MANAGER ACCOUNTABILITY

• Negligent Entrustment– Cause of action in tort

• Occurs where a person entrusts another with a dangerous instrument, and that person uses the instrument in a dangerous manner

• 3 Required Elements– Entrustment (turnover of custody)– Negligence (forseeability)– Injury

• Negligent Entrustment in Fleet Management– Entrusting vehicles to people who should not be driving them for various reasons

• Other Potential Examples– Experience

• How to Avoid– Periodic review of driving records– Flexible training of new personnel

• Contract Negotiations– Examples

• Lease/Purchase Agreements• Fuel Agreements• Maintenance Agreements• Labor Agreements

• Role of the Fleet Manager in Contract Negotiations– Represent the Company and Its Interests How accomplished?

• Provide maximum amount of flexibility• Utilize a competitive process• Match your needs to the agreement

• The 4 “How’s” of Contract– How long? (term)– How much? (payment amount)– How do I get out of this? (termination) – How bad is that? (penalties)

• Sarbanes-Oxley Act (SOX)– Enacted in 2002 in response to multiple corporate scandals– Significant reform in corporate governance– Publicly-traded companies

• SOX for Fleet Managers– Increased scrutiny of contracts & their negotiation– Need to disclose liabilities accurately (lease transactions)– Value on back end on the balance sheet for closed end lease– Makes one-stop shopping probably more unlikely

• Ethics in Business– Sense of fair play

• Sales Depreciation– Shows by taking ownership of the sales process how a single day adds lift to a

vehicle portfolio – Point of diminishing returns

• Benchmark depreciation– Off the road January 1, sold March 31 benchmarked at what guide book publish

date?

• Outsourced sales process – End sales result is absolute

• Cost of Funds– No control over companies credit score– Taking ownership of the sales process allows shortening the days to sale – Decreasing days to sell adds monies back to bottom line

• Additional lease payments– 30 days to get a credit

• Management fees – Life of the lease

• Driver Sales – Distraction VS. Benefit– Liability issues