Global versus local, and “that bus” at the GFC 2023
The eternal question for global fleet managers is: Which is the right level for policy-setting and decision-making – global, local or ‘glocal’? This was one of the two main threads running through the plenary sessions of the 2023 Global Fleet Conference. (The other was sustainability; more on that here). Loosely following this thread, what did we learn, last Tuesday in Cascais (Portugal)?
For those in doubt of the global nature of the Global Fleet Conference, moderator Steven Schoefs (Head of Strategic Relations, Global Fleet) had an impressive list of stats about those present at the GFC 2023: “More than 300 participants from 120 companies, across 35 countries, plus 50 Fleet and Mobility experts”.
Collaborate or die
The first of those to speak was professor José Crespo de Carcalho (CEO and President of the Executive Board at ISCTE). In a stage-setting speech on the future of logistics and supply chain management, he fired a bunch of analogies – military, philosophical, strategic and more – on the attendees, culminating in one key message: “Collaborate, or you will lose your competitiveness. We must learn to live together, or perish as fools”, he quoted Martin Luther King. One of his more philosophical musings, but a very pertinent one: “Technology is the answer, but do we remember what the question was?”
Asking the right questions is where it all begins, as anyone experimenting with ChatGPT has learned by now. And what did we learn about the global-versus-local issue at Cascais?
Finding the right partners “not easy”
In the first panel discussion of the day, the topic up for discussion was: Fleet sourcing across the globe.
“Sustainability is important for us, but it’s not easy to find the right partners for this in Latin America. The local fleet suppliers are not talking about it”, said David Trujillo (Regional Fleet Manager Procurement at MSD).
“Regulations are getting stricter, so that helps setting sustainability targets in Europe”, said Andrea Montuori (Global Category Manager, Xylem). “The challenge for us is e-LCVs. There isn’t a lot of availability, and what’s available doesn’t have the range we want. We’re currently running some pilots, but there is a lot of range anxiety. Better data would help!”
“The drive from El Paso to Galveston is 1,200 km. In Europe, that puts you in another country. In the U.S., you’re still just in Texas. So, large distances are an issue. Or to put it another way: when we electrify, range anxiety will be an issue. But we have to do it. We’re focusing on what we can do now, and on preparing for the future.”
In complex regions like Africa, being sustainable and being ethical are strongly linked, explained Paul Jansen (Executive Director, Fleet Forum): “The ‘do no harm’ principle is very important. Conflict countries are more vulnerable to climate change, but also contribute much less to it. Safety is a big issue: you don’t want to cause accidents and hurt the people you’re there trying to help. And we should be aware that there are issues with child labour in harvesting the materials for EV batteries. I know organisations that refuse to use EVs because of this.”
Global reporting needs better data visibility
To measure is to know, and you need to know before you act. Hence the importance of reporting, but how do you do that reliably on a global scale?
“Reporting often starts simple, with a limited number of providers in a limited number of geographies. But things get complicated fast, as the number of datasets increase, as well as the languages, currencies, and other factors”, said Rory MacKinnon (Sales and Marketing Director at Holman), in a second panel discussion.
That’s why companies like his, with hundreds of developers working on software to satisfy reporting needs, still can’t convince all fleet customers. Some, like Paula Diniz Oliveira (Global Fleet Manager at Zoetis) compile supplier data on a homegrown system; while others, like Cindy Creel (Fleet Manager EU at UCB) have indeed acquired fleet management software, with a centralized global platform.
Everybody agreed, though: more visibility is needed. Not everybody wants to share data; and there are gaps for certain data categories (notably electrification). “Without those gaps, we would be much better at forecasting, notably cost. That’s something our stakeholders ask for a lot”, said Ms. Diniz Oliveira. “Having better data visibility would help us work on driver behaviour”, added Ms. Creel.
Live on stage: the Beatles and the Stones
The big finale of the plenary day was the big CEO debate (pictured), with the participation of the four head honchos of the two major global multibrand leasing alliances: Tim Albertsen (CEO of ALD Automotive) and Shlomo Crandus (CEO of Wheels) for the ALD-Wheels Alliance, and Alain van Groenendael (CEO and Chairman of Arval) and David Madrigal (Executive VP and CCO of Element Fleet) for the Element-Arval Alliance.
As usual, there was much agreement and few surprises on stage, and a lot of good humour and mild grilling (Albertsen revived the joke about Arval’s very slow autonomous bus obstructing access to ALD on the Paris street shared by both company’s headquarters). But just to see these four apex predators united on the same podium is a bit like seeing the Beatles and the Stones share a stage at Glastonbury.
The executives shared a bit about the internal working of their respective alliances – how many countries they covered, how many vehicles they jointly manage, and how often they spoke to their opposite number. And how many global framework agreements they have. “About 90”, said Mr Albertsen. “Well over a hundred”, retorted Mr Van Groenendael. “Shame we got that question first”, joked Mr Crandus.
The world is less globalized than a decade ago
But what is the actual advantage of such a global agreement? “One of our clients gets a lot of stick from their colleagues. You have it easy, you only have to deal with one supplier”, said Mr Madrigal. “Also, we notice that clients who manage fleets globally are better at implementing change”, added Mr Crandus.
About a decade ago, everybody expected growth to come from the so-called BRICS countries (Brazil, Russia, India, China and South Africa). That didn’t quite pan out. Any predictions for the future?
“The world is more segmented now. There was more talk of globalization 10 years ago. The axes of power are shifting. More and more, companies and industries are re-shoring and near-shoring, coming out of China”, observed Mr Madrigal.
“Also 10 years ago, the so-called PIGS – Portugal, Ireland, Greece and Spain – were labeled as the bad apples in Europe; but they have mostly turned around and have performed extremely well since then”, said Mr Van Groenendael.
“We think the Middle East could be interesting. We have a presence in Abu Dhabi via LeasePlan”, added Mr Albertsen. (the debate preceded the official closing of ALD’s acquisition of LeasePlan by a few days, Ed.) “However, I think there will be plenty of growth in Europe and North America. But we need to be present in other markets as well.”
“Ten years ago, growth was about geographic expansion. Today, we see that there’s plenty of work in sustainability, digitalization and related topics”, concluded Mr Crandus.
Image: Benjamin Brolet