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A Risk-Averse Fleet Makes A Bold Decision That Pays Off



By Donald Dunphy

April 2020


 

All fleets are grappling with the COVID-19 pandemic, and each organization is dealing with circumstances unique to them.  Such is the case with the fleet of 2020 Fleet Excellence Award Winner Chris Schaefer. Schaefer won in the Excellence in Corporate/Private Fleet or Mobility Management category.
 

Change of Venue
 

“Every fleet needs to be mindful of risk, but we’re an insurance company,” Schaefer says. “We are naturally risk-averse. We have to protect our drivers, employees, and customers, but also set the example based on the services we provide.” Schaefer, Fleet and Travel Manager for Westfield Insurance, has been working from home along with his team members. “We have roughly 1,500 people who work at our home office, so that is a large population to move to work-from-home setups, but we implemented that quickly.”
 

Prepared and Ready
 

As the company’s fleet leader, Schaefer solely manages 300 vehicles in 38 states. He is well experienced in adapting to a work-from-home dynamic. “I used to work for a fleet management company and that was a work-from-home arrangement, so this is an environment I’ve experienced before. I get up in the morning, get ready to work, and spend the rest of the day being productive.”

From the standpoint of operational necessities, Schaefer says the coronavirus has not changed things all that much. “We have folks that are specifically responsible for storm duties. We’ve had some claims recently in Tennessee, for example. If we have tornado damage that needs to be underwritten, we take the fleet vehicles out into the field and perform those duties. These are essential services, and we have a responsibility to meet the needs of our customers.”

Westfield Insurance runs a take-home vehicle fleet, meaning individual employees are assigned vehicles and do not trade off a single vehicle among multiple drivers, reducing the possibility of spreading Covid-19 among users.  “We follow the guidelines we’ve been given by the CDC and we that will go a long way in not making a very bad situation worse,” explains Schaefer.


Car Guy


Schaefer is not surprised he wound up in an automotive-related field like fleet, but his initial trajectory was much different. “In high school, I took vocational courses to be an automobile technician,” Schaefer explains. “That led me to a car dealership out of school, not as a technician, but as a service writer and later a service director. I was still using my knowledge base, but in a less hands-on way than I’d expected.”

From there, he became a vice president of sales for a fastener manufacturing company that supplied parts for steering columns and dashboard assembly to the Big Three OEMs. Later, he worked as an insurance agent for State Farm Insurance, then transitioning to work with the PHH fleet management company. (Element Financial purchased PHH in 2014.)
 

2020 Fleet Excellence Award Winner Chris Schaefer shares “Every fleet needs to be mindful of risk, but we’re an insurance company, we are naturally risk-averse. We have to protect our drivers, employees, and customers, but also set the example based on the services we provide.”


While all this seems like an indirect path to his current job with Westfield Insurance, Schaefer says that each job offered educational lessons that benefit him to this day. As a fleet professional, these experiences offer him an understanding of fleet management literally inside and out.
 

Organization First
 

Westfield has a wide footprint across the U.S., and Schaefer’s role in overseeing all these sub-units is very much like that of an international fleet manager. Above all else, he says, you must be organized. “I utilize email and Microsoft Outlook a lot,” he says, “and the calendar function is the biggest tool which I have in that toolkit. Whether it comes from an email, phone call, or face-to-face meeting, I’m consistently plugging information into that calendar. This keeps me on-task and from missing any opportunities.” The calendar function also allows Schaefer the ability to prioritize work and to break apart tasks over days so that he is not overwhelmed by deadlines all coming due at one time.
 

Tech Connections


Westfield Insurance utilizes a fleet management company with an online software platform. “The system helps me gather vehicle details and quickly find the information I need to make informed decisions,” Schaefer says. “Especially when it comes to individual driver details, the system has been very helpful in keeping me on top of it all.”

Just as these digital organizers unify Westfield’s widespread fleet information, Schaefer also has a system to unify their communication. “We have an intranet site on which I post articles and other information out to drivers and other employees,” Schaefer explains.


Maximizing Resale Value
 

Westfield’s standard vehicle cycling schedule is 36 months or 75,000 miles before equipment is put up for potential remarketing. However, this is merely a baseline. Schaefer maintains a regular plan to study the remarketing industry alongside this timing.

“We typically replace vehicles in the spring and fall, and we run vehicle lifecycle analyses faithfully during these periods each year to determine what vehicles are the best candidates for remarketing,” he says. He then combines these findings with the recommendations from the FMC. Finally, after reviewing what the marketplace is offering for used vehicles that match his makes/models, he can make an informed decision that can maximize resale.

“We do not want to be locked into a rigid ‘36 months-or-75k mile’ pattern, especially if there is a viable market for assets we have,” Schaefer says. “This can determine if we remarket vehicles that aren’t near those benchmarks yet and change them out. If we wait too long, we could miss out.” Conversely, the information could dissuade Westfield from divesting if there’s still life to be had from the vehicles while the marketplace is weak.
 

Change Management
 

The status quo is comfortable for most people, so managing change requires some unique skills, not the least of which making your team comfortable with the new and answering a lot of questions. When Schaefer and Westfield Insurance were presented with the opportunity of making a major change, he did his homework with a lot of research and encouraged collaboration.  

“Prior to working with our new FMC, we had been with our previous fleet management company for 15 years. Previous regular market examinations never provided the support for a change in FMC,” Schaefer says. “Significant questions came up. What about the costs involved with changing this relationship? What about changing systems, teaching people new ways of doing things or new applications that would have to be downloaded? Could we make the value of change greater than the costs of staying?”

Westfield Insurance entered the RFP process to determine what new ideas in fleet management were available. They discovered many options existed where an all-new fleet might be the best way forward. This was not a suggestion to take lightly. Alongside the rigors of working with a completely new entity, this proposal suggested virtually a full, clean break. Yet there was logic to this concept. By changing out so many vehicles at once, large-scale repairs like engine, brake, and transmission repairs would hypothetically disappear for at least two years. Only preventive maintenance with oil changes and tire rotations would be necessary, and in that time, Westfield could begin to offset the costs of change.

Further, because the equipment was new, it would not have the typical wear and tear which might compromise safety. Plus, having done a careful analysis of new vehicle safety features to update Westfield’s vehicle selector lists, Schaefer could reduce risks of accident claims due to equipment. The carryover value would be seen in reduced insurance costs for their fleet…which Westfield recognized very well.


Making a Change


Thanks to Schaefer’s homework and a thorough understanding of what was being offered, Westfield took the plunge. For its efforts, the fleet realized a maintenance cost reduction of 42% and a cost-per-mile-per-vehicle decrease of $0.02. This move was a reflection of the company’s mandate to manage risk. Schaefer concluded that the real risk to his organization was ignoring potential gains in deference to a comfort level with continuity. Schaefer concludes, “When you are presented with evidence and data, you can make informed decisions turning a blind eye to things that can potentially go wrong. Getting that data and really using it…that is our ‘big picture’ strategy in a nutshell.”


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