ASSIGNMENT 2

Assignment 2 Making Transport Work

Name of the Writer

Name of the Institution

Table of Contents

Introduction3

Discussion3

Contract Hire brings Significant Value To A Company4

Facilitate in Policy Development5

Consideration of Costs and Improve Efficiency6

Driver's Hours Control and Livery9

Health & Safety10

Disadvantages12

Conclusion13

References14

Assignment 2 Making Transport Work

Introduction

The traditionally operated a fleet of vehicles can be costly and time-consuming function. The company wholly owned the fleet of vehicles, as well as the company has always carried out all servicing and repairs on its principle along with full facilities. Most of the organisations usually outsource fleet management to FMOs (Fleet Management Organisations), especially to increase efficiencies, to avoid being sidetracked by non-core activities, and by driving cost savings. Our company is not an exception and because of huge financial investment involve in fleet management, the company want to evaluate the possibility of changing vehicle sourcing to contract hire by assessing advantages and disadvantages of contract hire as regards to fleet management. In this paper, being a transport specialist the approach of contract hire is reviewed to examine its benefits and costs to an organisation (Zhang, 2005, pp.1534-1539).



Discussion

Fleet management refers to the management of a transportation fleet of a company. It includes commercial automobile vehicles like rail cars, trucks, vans and cars ships. Vehicle or fleet management may take in a variety of functions like health and safety management, fuel management, speed management, driver management, vehicle telematics (diagnostics and tracking), vehicle maintenance and vehicle financing. It refers to a function that permits the company that depend on transportation in their business to minimize or even remove the risk linked with fleet investment, decreasing their overall costs of staff and transportation, to improve productivity and efficiency, to provide 100 percent compliance with duty of care or government legislation and others (Chopra & Sodhi, 2004, pp.53-62).

Contract hire of commercial vehicle symbolizes the absolute solution of the fleet and gives the company with off-balance sheet financial support of the exact automobile as per the need of the company, in livery and with no or less burden of disposal and ownership. The truck or van is given to the company for a fixed time period (typically 3 to 8 years) and with a mileage stipend that fits the company specific requirements of transport. With contract hire of van or truck, they take care of all maintenance and servicing, documentation and administration; let the company free to focus on core business activities. It seems to be ideal for organisations whose business needs them to operate commercial means of transportation; however, for them road transportation is nor a core skill or interest.

In an organisation, such functions are carried out either through in-house management or outsourcing. There are a number of advantages and disadvantages of contract hire, some of them are discussed below:

Contract Hire brings Significant Value To A Company

Contract hire may carry out a number of functions of operational fleet management in an effective and cost effective manner because of its degree and scale of specialisation. Contract Hirers can play a very important role on ...