Turning the fleet green

Sarah Gardner Jul 11, 2007

Turning the fleet green

Sarah Gardner Jul 11, 2007


Kai Ryssdal: Oil’s at 72-something a barrel in New York. Gas is correspondingly high, tucked right under $3 a gallon for a nationwide average. That’s more than just a pinch to the pocketbook for many. Including companies that lease what are called fleet cars for their sales reps and other traveling employees.

So one of the biggest fleet managers in the country is moving to a greener company car. Sarah Gardner reports now from the Marketplace Sustainability Desk.

Sarah Gardner: L.A. native Lisa Valtierra is on the road five days a week in Southern California for her job with drug maker Abbott Labs.

Lisa Valtierra: I don’t use the freeways very much. You know, I’ll never get on the 405, that’s a kiss of death.

Valtierra knows her shortcuts. She knows her gas mileage, too. When Abbott recently offered her a choice of company cars, she picked a 2007 Dodge Caliber — a boxy little hatchback that’s been called versatile, capable and unexciting.

Valtierra: I chose this one mainly because it was the greenest of the options.

Valtierra’s company is one of four that’s signed onto a program called GreenFleet. It’s run by the company Abbott leases from, a huge corporate fleet management firm called PHH Arval, based in Baltimore.

PHH wants to manage climate-friendly fleets. So they’re nudging corporate clients into more fuel-efficient vehicles. Sometimes with baby steps.

Karen Healy: Before Abbott joined GreenFleet, their regional manager, for example, could get a Chrysler 300 with a hemi in it.

Cars with hemis, those powerful, gas-hogging engines, are no longer an option for Abbott’s managers, says PHH exec Karen Healy.

Healy: They can still get a Chrysler 300, but it’s with a regular engine, and it’s like a luxury package so it’s got nice leather seats and stuff.

In Abbott’s case, about 20 percent of company drivers are choosing the most fuel-efficient vehicle offered. The drug maker has improved total fuel economy by 4 percent, and reduced greenhouse gas emissions by a little more than that.

Healy says another GreenFleet participant, Infinity Insurance, doesn’t give employees a choice.

Healy: They were driving a Jeep Liberty and they are now driving a Jeep Compass.

Infinity’s gas mileage has improved 26 percent.

Rick Teebay chairs the Fuels and Technology Committee for the National Association of Fleet Administrators.

Rick Teebay: Everybody’s looking at their bottom line, particularly companies are trying to make their quarterly numbers. They can’t afford to have fuel costs ratchet out of control.

Teebay says many companies are trying to cut back on fuel use. Some are switching from six to four-cylinder cars. Others are using GPS navigation systems to find the most fuel-efficient routes.

UPS says it saves lots of gas by avoiding left-hand turns. Others are simply checking tire pressure more often. That saves gas as well.

Teebay: Fuel costs will be typically 10 percent of your fleet operation costs. And if fuel goes from $2 to $3, then that 10 percent goes to 15, and it begins to eat a hole in your budget.

Teebay says, depending on the business, switching to an all-hybrid fleet may be the greenest option. But hybrids often cost more upfront, and companies can’t often justify the expense under the typical three-year lease.

But it’s not always money motivating companies to clamp down on gas guzzlers. PHH says its first GreenFleet clients were more motivated by a need to meet corporate global-warming goals.

Tom Murray is with Environmental Defense, a nonprofit partnering on the GreenFleet campaign.

Tom Murray: We’ve seen gas prices rise and fall in the past. It’s exciting to me right now that there’s more influencing corporate decisions than just gas prices.

PHH may just be starting to green its fleets, but Environmental Defense sees potential for a huge expansion. GE, the biggest fleet manager around, is set to acquire PHH later this year. If environmentalists can convince GE to sign on as well, they say they could potentially steer a third of the country’s “company cars” in a greener direction.

I’m Sarah Gardner for Marketplace.

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