JESI CEO, Joe Hoolahan and Strategic Analytics Team, Senior Partner, Paul Jorgensen
Joe Hoolahan: Welcome this is Joe Hoolahan CEO of JESI Management Solutions. Thank you for joining us in our grey fleet webinar. We’ve been inundated with responses and very fortunate to have people calling in from all over the globe to listen to our special guest Paul Jorgensen. Paul are you there?
Paul Jorgensen: Yes, good morning Joe.
Joe Hoolahan: It’s eight o’clock in the UK, it’s seven o’clock in Sydney, Melbourne and eastern states and Queensland we have six o’clock. We are testing the realms of technology.
But certainly, we welcome everybody into the conference and as a way of introduction I would like to introduce Paul Jorgensen Senior Partner from Strategics Analytics Team.
Paul has over 25 years Logistics and HSSE Operations experience gained across the Europe and the Middle East with Shell, Occidental Petroleum, DHL and Exel. These have often been in challenging and remote locations including a four-year period in Iraq.
Paul has a clear and deep understanding of complex business issues. He combines this with an understanding of working in multi-cultural teams to get the very best from them to deliver to the high standards he sets. With a focus on lean practitioner methodology enabling organisations to focus on continual improvement, combined with a strong ability to help design, deliver, implement and embed new technical and process solutions to clients allows Paul to assist clients in multiple areas of their logistics operations and HSSE.
Paul is an identified subject matter expert in safe journey management systems for land transport operations and works closely with clients on the design and implementation of innovative logistics management systems.
Paul Jorgensen: Thank you Joe, that is very kind of you.
As you know the new partnership between JESI and Strategic Analytics Team and I’m quite looking forward to building on that as we go forward into the future. One of the comments that you made earlier about having all of these people in from all over the world reminded me that when I was a kid in school, more years ago that I probably want to remember, we had a computer laboratory and I was never allowed into it, on the grounds I wasn’t smart enough. Apparently, because I was too busy dreaming about things like James T Kirk and his communicator talking to the rest of the world and the universe.
Here we are having gone through a communications revolution and a technology revolution, that now allows us to talk to all of our guests today and welcome them into this conference. I think it’s really useful for us to be able to do that on more than one level because it just saves us so many things. For example all the things in the past where you and I would have to get on planes to travel to places and all the rest of it, and now we can sit at our desks and talk to everybody and show and explain to people what it is that we can do for them and the capabilities around the systems that we have. So really exciting stuff.
Joe Hoolahan: It’s truly the enabling aspect of technology that we are certainly very grateful for. I did also hear a rumour that Strategic Analytics Team, have once again been nominated for another award in the UK. You guys are cleaning up the awards.
Paul Jorgensen: We are a little bit actually Joe. The last award that we have been nominated for is the Greater Manchester Business Awards. We have just been nominated as a finalist for the North West Business Masters Awards which covers all businesses across the north-west of the UK. That one was announced at the end of last week, so I’m really pleased about that.
Joe Hoolahan: Congratulations, all that has happened since you became a partner of JESI isn’t it?
Paul Jorgensen: Haha. Yeah, I think so!
Joe Hoolahan: We would like to take some credit for that but obviously we’re very happy to be working with yourself and your very dedicated team.
Without spending too much time talking about us, we could talk about cricket and all sorts of things, this morning, this afternoon, but we are obviously here talking about defining grey fleets.
Now jumping straight into it, for our Australian listeners grey fleet is a relatively new term, Paul from a European context what are you seeing at the moment that defines this topic of grey fleets?
Paul Jorgensen: Right, so grey fleets essentially is what is referred to as any vehicle that is not owned by the company or an employer but is used for business purposes. To put that into context for people, that could be one of your employees who you have asked to drop some mail off for you on the way home. When they use their personal car to do that, that now becomes part of your grey fleet.
Just to put that into context for you, in the UK there are an estimated 14 million grey fleet vehicles on the road and at the end of September 2016 there were only 37.4 million vehicles registered on roads in the UK, so they account for almost 50% of all traffic on the roads.
They cover then all types of companies and organisations from SME’s, small to medium sized enterprises, to major corporations and government bodies. So the message to employers really is, that it doesn’t matter who owns the car. If it’s being used on company business, they could be held liable if an incident occurs. To give you an example, I’ll put some more strength to that. If you pay a car allowance, if you pay for fuel to go into the vehicle for a mileage allowance, amongst many other things, then you as an employer could now be held responsible for both the employee driving it, the vehicle, and any incident that may occur, even if that happens to be a third-party hitting your vehicle, or your employees.
Joe Hoolahan: It’s quite an astonishing fact when you start to think about the knock-on effects of that when you’re talking about the UK alone, that 14 million vehicles you said, are classified as grey fleets, it’s quite a large number that’s going to touch a lot of businesses and a lot of people.
Paul Jorgensen: Significantly! And you know the way that legal action moves across, kind of like America and European and other places, it becomes more relevant to employers. It’s kind of always been there, just maybe not very well-defined and enforced. I think that is going to change.
Joe Hoolahan: I’m mindful that we are getting a few more people joining in. Welcome to those who have joined in late. We have kicked off with Paul Jorgensen, Senior Partner of Strategic Analytics Team.
Paul, getting into the discussion. Australian businesses are now starting to pay attention to grey fleets as they are becoming more aware of it. I’m not talking about the large corporations but any size business, like you just mentioned. Are there any key industries that seem to be leading the way regards to identifying these grey fleets?
Are there obvious businesses or industries that are more likely to be leading the way or harnessing the risks and exposure around the grey fleets?
Paul Jorgensen: No there aren’t actually, as we just discussed almost 50% of cars on the road in the UK are potentially in that grey fleet area, so the types of businesses that will be affected by it, could be anywhere. For example, my wife is a gas engineering and plumber, her van is effectively grey fleet. You have plumbers, electricians, you could have people who own flower shops or newsagents, all types of businesses and it can go across all of those into things like, service industry, so you can have carers, nurses, health workers, government workers, which can all be part of that grey fleet.
It doesn’t matter to a large degree with the types of industries or businesses that people are involved in, I think what’s important, is the employer’s duty of care and their compliance. The checks and balances that they need to go through to ensure that their employees are looked after and that they as an employer are protected against claims that may be made against.
That’s where we want to focus, so for example, it’s one of the reasons that we really like JESI products because it leads us into that position of being able to look after that duty of care element and the compliance elements that we need to go through.
Joe Hoolahan: That’s a great plug for JESI Paul, we appreciate that. It really is alarming as you mentioned, the person who might be using their car to run an errand on the way home, all good willing, but unfortunately, if there is an incident that can certainly be a question that is now raised. I was only thinking this morning before our chat, that we think how many people are probably even in the position where they’re driving to an after hours function that is a work function, obviously the additional risk of being at night and maybe after a few corporate drinks etc, it really does bring an alarming aspect, doesn’t it?
Paul Jorgensen: It does actually. And just to make it more alarming there are some shocking statistics and we are showing here 59% of work-related fatalities involved a vehicle, in 2015.
I haven’t been able to check out the standards in Australia, but I do know there are different standards in driving licenses, in Tasmania, there’s a law requirement for a basic learner driver than say Queensland or Western Australia.
But here’s a shocking one for you, a newspaper article the other day in the UK, congratulated a seventeen-year-old, because they passed their driving test the first time, having had six hours of driver training. He’s now legally entitled to drive a Ferrari if he could get insurance for it.
Depending on where you are in the world there are different legislation, so if you’re in Norway for example, there would be very strict limitations on the type of vehicle that you could drive. There are limitations, I’m glad to say on the types of vehicles you could drive in the UK. You can’t go out and drive say, for example, a three and a half tonne truck, or a seven and a half tonne truck, or a 40-tonne truck.
Joe Hoolahan: Paul, talking about the statistics in Australia for the Australian listeners, we are talking about work-related road crashes account for 1 in 3 occupational fatalities. Every time we have a fatality, 1 in 3 is due to an incident involving a road crash. The second one that was on the screen, is 59% of work-related fatalities involve a vehicle. They are stats that are right in our backyard. What does amaze me, is we still drive massive distances in Australia and we are probably expecting people to drive home from those massive distances as well. That’s a point that’s true to us as well.
Paul Jorgensen: There are some other things in there as well Joe. From an employer’s perspective, under those areas around duty of care and grey fleet, lots of employers don’t do anything around their grey fleet. It’s kind of, we don’t own it, therefore, we are not responsible for it. Yet they allow those vehicles to be used for business purposes.
Last year in the UK 98,000 licenses revoked because drivers had committed offences. 48,000 on top of the 98,000, a further 48,000 were taken away for medical reasons. 80% of employers in the UK don’t check to make sure that their employees have a legal right to drive. They’re not checking licenses, they’re not checking insurances.
Employers should be taking action to ensure that their employees are safe and compliant, and then the legislation here in the UK, Europe as well as Australia employees do have that duty of care for most employees and recently in the EU for many people that then meant that that’s from the time they leave home to the time they get back home again. It’s no longer just about the time they sat in the office you’re asking somebody to go and go to a meeting on their way to work, then they are deemed to be at work from the time that they left their front door. If they’re doing that in their personal car, or a car that you provided to them, or leased, or rented, you become liable.
Joe Hoolahan: The statistics you just mentioned, how often do employers validate that somebody has got a legitimate licence or a current licence? Are they driving to work in cars that are insured? Made me sit back and think you know what, we don’t do it. it’s just a simple thing, but you know what, I’ll put my hand up and say I haven’t done that. It’s quite an alarming fact, again to say that that are probably driving around for work and most of us probably don’t check licences regularly or know whether they have been disqualified. It’s a really valid point.
Paul Jorgensen: Absolutely. It is quite a scary one. The slide that’s up there now, 31% of grey fleet drivers are involved in a serious road traffic accidents. Under legislation at the moment, so under the UK, European law, I would assume under Australian law, because it’s very close to, kind of like UK law, in many respects. It’s important to ensure that people are capable of driving their vehicles, that they have a legal entitlement to do it, that they have adequate insurance in place, and it does vary from country to country. I’m not sure all of the countries that we have online today, but for example in the UK, I cannot insure an employee’s car, the employee has to do it. The onus sits on me to make sure that any of our employees if they’re using their personal vehicle that their insurance is adequate and covers business use.
In France, employers take out separate insurance on employees private cars, that allows them to use it, not just for business use but also for commuting.
I know another part of Europe, in Slovenia, the employee has to go to a designated person in the company to pick up an insurance document that allows them to make the journey from their place of employment to the meeting for example, and then back to their place of employment again.
The legislation does vary across different parts of Europe but it covers everybody. We look at sales reps, care workers, plumbers and electricians. All of those people fall under legislation which is covered by road traffic laws, employment law, health and safety law that make employers liable when people are using those vehicles.
Joe Hoolahan: One of the topics that we’ve talked before Paul, is the risk and best practice of grey fleets. We mentioned in Australia that we very rarely check licenses or roadworthiness or insurance and currency. What are some of the best practices and you’ve talked right down to someone having to sign a trip insurance cover? What are some of the examples you are seeing about the
best practice on how companies are reducing their liability around this area?
Paul Jorgensen: There are a number of areas and one of the things that surprise me a little, is that 80% of businesses do not have a written policy in place that covers travel of any description. Let or loan the use of grey fleet vehicles. It’s really important that companies put into place, a policy and that policy is adequate, and covers all the different aspects that they need to take into account. That’s the mode of transport, whether that’s public transport, whether it’s planes, trains, taxis, buses and now we see coming into play a couple of other things, Joe, as well.
What are people doing about ride shares? What are people doing about things like Uber? I use that very loosely, it’s not just Uber, but all of the other similar type organisations that provide that kind of service. Soon we will see autonomous vehicles and the way that those can be used. The policy needs to cover all forms of transport and I would include things like cycling and walking as well.
Joe Hoolahan: Is the 80% statistic, meaning 80% of businesses do not have any reference to a grey fleet in their policy at all?
Paul Jorgensen: No. 80% of businesses do not have a policy in place. They need to include their grey fleet into that policy. One of the shocking things Joe, because the grey fleet is dealt with not necessarily by logistics managers and fleet managers it’s dealt with HR people. Therefore the accounting process on it are different and nobody sees it as a big cost to the business, but potentially it can be.
Joe Hoolahan: Which is something we see quite often in our business JESI, we see a business who employ thousands of people and maybe only have a couple of hundred cars or corporate fleet under the true definition. We quite often, and our position is talking about every single person who travels use JESI. The best practice in actually having a policy in place, I’d be interested to see when we take Q and A at the end, is to ask, are there current templates, are you seeing an uplift in your services being requested by these companies? Maybe one story I’d like for you to share Paul is the example of the girl who actually was in the court of law and asked to defend whether she was actually given an induction on driving your own car. I know it’s a big question but if you can talk to that.
Paul Jorgensen: Of course, I can Joe. I think one of the important things to remember is because 80% of business don’t have a policy in place, it’s really critical and key for them to get the policy in place as quickly as possible. We are seeing, slowly but surely an increasing demand for companies wanting to put a policy in place that covers not only their existing professional drivers but also their grey fleet drivers. That’s a policy that covers all of their travel irrelevant to the mode of transport.
I think in that policy there are some key things that people need to make sure that they have in there. They need to make sure that driving license checks are in there, and that the employees agree to those driving license checks being made. They need to have something in there around insurance and making sure that the vehicles are insured for business use. They need to have something in there around maintenance and servicing records and ensuring that they can have access to those.
Across those three major areas, driving licenses, insurances and maintenance and servicing. Not only do they need to have the policy in place, they need to have a process in place that allows them to check those records on a regular basis. The policy needs to dictate how often that needs to be, whether that’s going to be monthly or quarterly or half yearly or yearly.
The other things they need to do is to have an induction process in place as new employees join the business, in the same way, that you would if for example you ran an engineering company and somebody came to you who’s got 20 years experience of operating a lade. You will still have an induction process to make sure that they operate that lade correctly and that all the safeguards are in place.
That’s all you need to do when people come and they drive to your business, even if it’s there own the vehicle, you need to make sure that they have a driving license, that it is current and valid that their insurance is in place and that they can drive that vehicle safely, because they’re using it on company business.
Just to explain to you how bad that can be. There was a court case last year where there was a young lady in court, she’d been hit by a third party and the solicitors, the lawyers were very shrewd and asked her at what point in time did her employer give her training to drive her vehicle. Her response was I have a driving licence. No, that’s not the question we asked. When did your employer give you the training to drive your vehicle? Never.
That was the end of the case and everything was found in favour of the employee, the third party, and it was all costed against the business.
Joe Hoolahan: It’s actually bringing in a whole new level of competency for all sorts of skills. Even having a license that may have been issued 20 years ago, in some way what you are saying is that the competency is still there and that person is still able to drive. If it’s going to come back as discussions for the business. It’s a pretty important point, isn’t it?
Paul Jorgensen: Absolutely. In the UK last year just an example, 48,000 people had their licences revoked on medical grounds alone. If they haven’t declared that to the employers, then they could still be out there driving those vehicles today. They could be driving anything, they could be driving a heavy goods vehicle, could be driving a bus, they could be driving their own personal.
Joe Hoolahan: It’s certainly been an intriguing topic. I know that it’s something that we’ve looked at and talked to our clients about. Raising awareness around the potential risks and liabilities. It’s certain that I’m sure that we will get some questions around. We’ll start to take some Q&A from the audience listening.
We have one here from Renee. Will putting a grey fleet policy in place mean that I will reduce any of my potential insurance claims?
Paul Jorgensen: On its own, it’s unlikely that it would reduce your insurance premiums. What it can do, though, is very much defend you against potential claims that are made against you. It’s a bit like having a health and safety policy if you don’t have one and somebody makes a claim against you, then obviously you are in difficulties.
It’s the same thing, and it should be part of your health and safety process to have a grey fleet policy in place, so it will begin to strengthen your position against any claims that are made against you. It should go to reducing your liabilities, but it needs to be backed up. As I said you know it’s great having policies in place but how many of us enforce those policies. And part of this is ensuring those policies are enforced.
There are some other things to strengthen that as well, and part of that is making sure that you send people on accredited defensive driver training courses.
Joe Hoolahan: This is obviously coming from a JESI supporter. Viewer 25 is asking, hi Joe, how is JESI helping with this problem. Probably an answer for you Paul, as you are one of our partners in the UK.
Paul Jorgensen: As a part of SAT’s policy, we make sure that everybody who’s driving on company business has been on a defensive driver training course, so me as the senior partner right the way down to the guys at the bottom, everybody goes on one of those courses. That’s then strengthened by our written policy and then we back that up by using JESI.
The way that we use JESI is essential, that every journey undertaken on business has to be put into JESI. If it’s not in there then a couple things happen, one is we will raise queries with the employee about why they’re not using it, and the second one is that we won’t pay any expenses or claims against that journey. If somebody submits a claim to us today, and I travelled from Manchester in the UK to Glasgow in the UK and the journey was 220 miles at 45 pence a mile and it’s not in JESI, we don’t pay for it. It’s a simple as that.
We are thinking of currently extending that to all of our contractors as well, we have quite a number of contractors and we are thinking of extending that to them. Saying, that if you’re travelling for business on behalf of SAT then you need to be using this system.
Joe Hoolahan: Ok, so really starting to, I guess, put our tool into place which is great for us to see. Have you started using that the travel risk assessment Paul?
Paul Jorgensen: We have yes in part, we were using the old risk assessment that was in there, now obviously the latest one has been released so we have started using that and we’ve also started using the travel itinerary import as well. Which is particularly useful, as I fly quite a lot backwards and forwards to Europe, I’ve been able to use it for that and it’s very effective, very easy.
Joe Hoolahan: Very good plug for us at the end thanks, Paul. We are certainly getting towards the end of our time and we may actually wrap it up there. Certainly, encourage listeners to reach out to either Paul or myself in regards to any questions you might have.
The details are on the screen there for Paul, it’s firstname.lastname@example.org and for the JESI team email@example.com
Paul, really appreciate your time, we are loving working with you and your team over in the UK. We look forward to doing a lot more.
Certainly to all of our listeners who have taken time out to dial in, whether it be the morning or the evening, no matter where you find yourself in the world. We certainly thank you for your time and we certainly want you to travel safely. Paul, thanks again and looking forward to catching up again soon.
Paul Jorgensen: My pleasure Joe, thank you very much.