22 sep 21

Optimising TCO, safety in Latin America through internationalisation

When managing a fleet across multiple countries, you first need to know what impacts your TCO (total cost of ownership) and then apply the most cost-effective strategy all while keeping safety in mind.  

This is the objective of multinational pharmaceutical company MSD, according to the company’s lead EHS (Environmental, Safety, Health) Manager for the Latin America region, David Trujillo (pictured right). 

“Our objective is to provide safe and reliable transportation that fits the image and overall needs of the company through the most cost-effective means,” Mr. Trujillo said during the 4th edition of the Fleet LatAm Conference hosted by Fleet LatAm editor-in-chief Steven Schoefs (pictured above). 

When determining TCO, among the main costs to consider in fleet operations are fuel, parking, maintenance, repairs, documentation (registration, fees, insurances, taxes), depreciation, the impacts of traffic, as well as the initial car purchase, added the company’s Latam fleet manager Kevin Kibilds

In terms of selecting suppliers, MSD conducts bidding processes which are supported by business reviews, fleet manager referrals, and other market research. “We also look at supplier KPIs and gravitate toward those with clear contact information and a dedicated team for problem solving,” Mr. Kibilds (pictured right) said at the Conference.  

To optimize TCO, besides utilizing the company’s vehicle selector, Claudia Roa Fragoso who is LatAm fleet manager for the Sherman Williams company, works internally with her financial and human resources departments to develop the most cost effective and efficient fleet. 
And for Tania Mijas (pictured left) from Hoffman La Roche – Genentech, “One of the most important things fleet managers need to accomplish is strategic relationships with suppliers and partners, something that could be done through global negotiations, says Ms. Mijas who is the senior fleet, travel, and events manager in the Americas for the biotechnology firm. 

Among the partnerships needed are those with international fleet management and leasing companies, one being LeasePlan which is one of the largest players in Mexico. According to the company's Mexico commercial director Karla Flores and Mexico customer success director Edgard Torres (pictured both below), one key benefit of leasing in the country is higher tax write-offs. In Mexico, up to 6,000 MXN is deductible per month for ICE (internal combustion engine) vehicles and 8,550 MXN for EV (electric vehicles). 


Green is Good, but Safe is Better

Although L'Oreal Mexico CFO Antonio González (pictured right) did mention at the Conference that the cosmetics company is highly focused on reducing CO2 emissions (achieveing 50% BEVs by 2030), safety is really on the minds of fleet managers throughout the region.  
For MSD, its goal is to achieve zero adverse events, meaning no injuries, illnesses, vehicle accidents, or fines, and a similar vision is shared by multinational farming company Syngenta.  

“Fleet management is a critical process in risk management and safety is a leadership commitment and a priority for us. It is not just a guideline but a program which we call Camino Seguro [safe path],” says Mariana Costa (pictured left) who is the company’s fleet service delivery manager in Latin America.  

Through the program, drivers get a monthly score based on assessments on traffic infractions, seat belt usage, and other driver behavior.

Fleet Management across countries  

While OEM selection and the overall operating model and management strategy of your company could be done globally, factors related to gasoline usage could be managed regionally while tollbooth, parking, security requirements and telematics issues are better done locally, said Mr. Kibilds, adding that Fleet Management Company selection could be done locally or internationally. 

According to ALD Automotive Mexico commercial director Olivier Deleau (pictured right), the benefits of managing your fleet globally are increased visibility and control through best practice sharing, more efficient car policy, supplier consolidation. Purchasing power can also be increased by developing strategic partnerships on a larger scale.

One common phrase at the event was "think globally but to act locally". 

“Fleet managers really need to know the idiosyncrasies of every country. First understand their culture and then find the best way to communicate your global policy with them,” says Ms. Fragoso (pictured left). 

The 4th edition of the Fleet LatAm Conference entitled "International Fleet Management Simplified" was held digitally on Tuesday (21 September) and attended by more than 400 fleet and mobility decision makers and professionals from Latin America and beyond.




Authored by: Daniel Bland