This Integration Guide was sponsored by Adrian Steel and Mercedes-Benz as a supplement to Residential Systems, April 2016.
Getting from here to there is a basic aspect of every custom integration business, large and small. Beyond the initial installation service, cargo vans and trucks are needed to maintain and manage projects epitomized by the classic “truck rollout,” which in the past few years has been augmented by the growing popularity of reliable remote management services that cut down on service costs. In fact, maintaining a fleet of cargo vans and trucks can be a tremendous financial burden on integration firms, especially ones working on numerous smaller projects throughout the year. Whether or not to invest in a fleet is often a huge decision for CIs. Beyond the challenge of deciding whether to buy or lease the fleet itself, there are other considerations, including interior flexibility, serviceability, and reliability.
LEASING VS. OWNERSHIP
“The home entertainment arena has exploded,” for cargo fleet service providers, said Michael Felices, fleet business development specialist at Mercedes Benz Vans, who also outlined the three basic things integrators seek when purchasing a fleet from the motor giant: cargo capacity, security of AV equipment, and image.
“We work with many FMCs (fleet management centers),” Felices said. “FMCs assist the customer by effectively managing the total cost of ownership of their fleet. The vast amount of data they have across their customer base can be invaluable to the end user. They provide many customized options, whether you are a small fleet of one or a mega fleet of 500 plus. FMCs can provide many options for the tradesperson in the type of vehicle, lifecycle management, maintenance options, etc.”
GM Commercial’s City Express offers 122.7 cubic feet of cargo space that can be customized for any trade.
Companies like Union Leasing in Schaumburg, IL, offers what it calls “a holistic approach” to fleet services by providing a menu of “integrative fleet services” throughout the lifecycle of the fleet, with planning consultation, leasing, operation, and re-marketing included in its services.
A great starter question is indeed whether leasing or buying vehicles is the right strategy for your company’s bottom line. Union Leasing and other motor agencies, including General Motors Fleet & Commercial and Nissan Commercial offer comprehensive overviews of your options, including cost of ownership versus leasing pros and cons, fleet needs assessments, and financial goal setting.
“This really depends on the company and how they prefer to cycle vehicles,” noted Felices, comparing leasing with cost of ownership. “If they live to run vehicles ‘into the ground,’ then purchasing may best suit them in the long run.
“For those companies that prefer to maintain a newer fleet, under warranty, and with minimal downtime, leasing is the best option. Leasing provides the customer options at the end of the term to purchase or dispose of the vehicle, which can be great as your business needs change. There are also additional tax advantages that can be maximized depending on the structure of the company, which should be discussed with your tax professional.”
From a pricing standpoint, Bob Wheeler, communications manager for General Motors Fleet, was candid about his view of leasing being the more attractive option, noting that it’s typically cheaper to lease the vehicle because you’re paying for depreciation during the terms of the lease, versus buying, where you are paying off the entire price of the vehicle.
“On the flip side, buying gives you more flexibility because you own the vehicle outright and you don’t have to worry as much about damage being done to the vehicle during the course of your day-to-day work,” he said. “Plus, when you own your fleet vehicles, you can customize them as you see fit. For some, this is a huge benefit, since a lot of companies have specialized needs that can be met with specialized vehicles.”
FLEXIBLE INTERIORS AND CUSTOMIZATION
Even custom integrators need customization of their own, and this extends to their in-the-field vehicles. Flexible interiors are essential for AV pros who often require room for racks, cables, and tech assessment tools.
For example, GM Commercial’s City Express offers 122.7 cubic feet of cargo space that can be customized for any trade, Wheeler explained. It also offers a 1,500-pound payload capacity and includes a fold-down mobile workspace passenger seat, 20 interior cargo-mounting points, six floor-mounted D-rings, six exterior roof rack mounting points, vinyl flooring, a 150-amp alternator, and a 12-volt power outlet.
Mercedes Benz Vans’ 2016 Metris has been garnering positive reviews for its fuel efficiency and cargo-caring ability, which mirrors larger trucks.
Mercedes Benz Vans’ 2016 Metris has been garnering positive reviews for its fuel efficiency and cargo-carrying ability, which mirrors larger trucks. Offering a 2,502-pound payload capacity, the Metris can be customized by MB’s master upfitters, who can integrate everything from mobile offices and workstations to bespoke service interiors into its range of “sprinter” vans.
“Our vehicles offer best-in-class utility, cargo capacity, and upfitting integration options,” Felices said. “If you can dream it, one of our master upfitters can create a solution for you.”
TRAINING AND SAFETY POLICIES
In an industry where the drivers are tradesman rather than full-time truckers, it is understandable that some training and an adherence to specific safety policies will need to be implemented. Though there is an emphasis on health and safety in our channel, fleet management presents its own set of safety rules that require compliance.
“I would recommend first starting with a complete overview and training on the vehicle,” Felices said. “Covering the basics, such as location and use of headlights, blinkers, wipers, etc. may seem rudimentary, but these basic daily features and functions are a reminder to drive safe. Keep in mind that the tradespeople are driving a personal vehicle and switching into a company van, so location of ‘standard’ features may be different between their personal vehicles versus the work van. Also, utilizing a checklist every morning to ensure all lights are functioning, tires are in good condition, etc., will keep your employees safe and bring to attention possible safety and maintenance issues before they develop into larger problems.”
THE BOTTOM LINE IS…
As an expenditure, cargo van purchasing or leasing is a critical aspect of business management. It can also get very expensive depending on your city, firm size, and staffing needs. While smaller integration firms might be able to cut out this expense altogether by utilizing personal vehicles or public transport (where provided and accessible), the truth is, having dedicated vehicles can influence client confidence in your projects; the ability to show up within a reasonable time to answer questions or fix a problem cannot be underestimated. And hiring a fleet management company can save further headaches and expenses for companies of a certain size.
“When done well, a fleet management company can help reduce costs and increase productivity, and they usually offer different programs for different companies, based on what you are looking for,” Wheeler said. “That can mean you give a management company complete autonomy to run your fleet how they see fit, or you work closely with them to ensure they are meeting your requirements.
“As for cons, there really aren’t any, save for the fact that you are distributing money to the management team, rather than putting it toward something else. And fleet management companies can be an expensive item, so it’s best to consider all avenues when deciding if you are going to put budget toward letting someone else manage your fleet.”
Llanor Alleyne is a contributing editor for Residential Systems.