IN DEPTH
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FRAIKIN GROUP
Putting the focus on own-account business
Reducing the risk
By targeting own-account operators, and improving its offering, Fraikin has moved with the times and reduced risk
Words: Kevin Swallow
One of the many reasons for Fraikin’s success is its policy of providing contract hire vehicles for ownaccount companies. Recently appointed chief operating oficer Mick Harrison (see box) says Fraikin is a conservative company where own-account business is considered less of a risk than haulage, which is seen as high risk. An example is the recent GeoAmey deal for 401 prison vans.
A restructure of the sales team has also brought greater focus, and has now generated more than 600 additions to the contract hire portfolio with a third of the inancial year still to go. “We restructured the sales team in 2010, which is now split into business development with eight people, and customer development with 16 people,” he says.
The Fraikin Group has also created a client list populated by all sales people across the group. This is updated and continuously monitored, and allows the UK company to see beyond its shores. “If you have 300 vehicles supplied in France to a customer that has none in the UK, you have a common link to approach the company. There could be an economy of scale they aren’t aware of – the database can give the sales team some leverage,” says Harrison.
Major accounts success
Contract hire customers are split into three areas; central and local government, major accounts, and small to medium-sized enterprises (SMEs). “The most success is with major accounts. With SMEs, economic uncertainty makes it dificult to get a renewal with them; they are more likely to extend contracts,” he says.
In terms of renewal, central and local government is becoming a worry as departments have to ind 20% cuts, which has led to a greater consultancy role. “We take a con sultancy approach to manage leet vehicles better by sweating the assets, and helping maximise leet utilisation.
“It’s counter intuitive to suggest an operator uses higher GVWs to downsize the leet, for example moving from eight smaller vehicles to six larger vehicles, but it saves the customer two vehicles and two wages, so it helps that business,” he adds.
Strong bargaining tool
Also offering leet management to customers is fast becoming a strong bargaining tool for Fraikin. There are 10,000 vehicles on leet management agreements, and Fraikin looks after around half of its contact hire leet, totalling 12,500 CVs.
“It’s a dedicated in-house leet management scheme that does everything from breakdown to scheduled maintenance,” says Harrison. “It’s all planned, anything from 12 months to ive years.” Fleet management also gives Fraikin the potential to enhance its customer base for contract hire deals.
“Central and local government is now starting to consider leet management. Where it was always outsourced, they are gravitating towards contract hire from outright purchase as well,” he says. ■
MICK HARRISON
Mick Harrison arrived at Fraikin in December 2010 as commercial director, and within 10 months was appointed chief operating officer. He was placed in charge of procurement and ensuring vehicles met the latest London Low Emission Zone regulations (which came in this week).
Harrison says vehicles go through a simple process; first into contract hire; and secondly all de-fleeted contract hire vehicles go to Used Vehicles Sales and are either put into rental with existing customers or sold.
There are more than 5,000 CVs in the contract hire fleet, and 1,000 in the rental fleet, which are mainly two-axle rigid trucks and around 100 tractor units and 200 vans.
“Contract hire stock tends to be around three years old, while rental is four to five years old. The recession has seen a strong utilisation of the product and price and a large number of customers have extended contract hire agreements,” he says.