In the first week of February I was a panelist in a Business Travel iQ webinar, Ground transport: how to add value to your programme. One of the questions that came through was 'who is the best ground supplier'?
At first I wondered if I should give away my knowledge to who I think they are, especially as in today's world both clients and suppliers are trying to keep up with the need to become global. I have worked with and for outstanding suppliers. I am sure all of them, and their strongest competitors or at least most of them, would want me to say that they are the best. I could have answered a particular supplier in each of the car/chauffeur categories but over the last many years I have learned that there is no easy answer.
Here is the issue: most people want a simple easy solution or answer. If you are a small company and if there is not a lot of spend in the ground transportation area then there is a simpler solution. A single supplier can handle the majority of your needs but you still need to do your due diligence.
It's a different story if you are a larger client. A primary supplier with primary back-up supplier/suppliers may be the best bet.
The factors that influence supplier choice
Rent-a-car industry
I am starting here because there are far fewer suppliers to deal with than any other part of the travel business and specifically the ground transportation world. You would think that since there are so few suppliers it would be the easiest in which to choose an individual supplier, but there are several issues to consider which are mostly applicable for all segments of the ground transportation business, including chauffeur driven suppliers.
- Where is your company physically located?
- Where do your travellers travel to?
- How much volume you have in any one area and overall?
Any supplier will say they are global and that they can handle any one client's business everywhere. That is what we, the suppliers, sell. Sell is the operative word. Their job is to convince you that they are the solution to all your needs and their service will offer a seamless experience for your travellers with little to no service issues. It is important to be aware of this as travel managers and attempt to avoid problems from the outset. Your job will be easy if you pick them out.
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With so much choice, buyers have to ensure they know what they want from a supplier. ©DNY59/iStockHere's what I have learned. First, there are very good suppliers. Unfortunately, I have also learned the hard way that what was true a year ago, or the last time you sourced a supplier, has changed, mainly in the ability for supplier/s to offer the same level of service.
Many, including myself, are guilty of paying attention to supplier marketing, past reputation and what was true in the past instead of what might be the current reality. Many factors are shaking up the entire industry from management changes and profitability to technology and new innovators.
In the rent-a-car industry there has been consolidation: Hertz with Dollar/Thrifty, Avis with Budget, Enterprise with National/Alamo. There have been changes in some suppliers' global networks with Avis buying Avis Europe and Enterprise/National ending their business relationship with Europcar, choosing instead to build out their international locations under the Enterprise name. All of the above (with deeper context in 'Ground transport in 2015: it wasn't all about Uber') effects changes in service and pricing both positively and negatively.
Chauffeur-drive
Most if not all of what I said above also applies to the chauffeur-drive sector. The difference is the problems addressed above are much more exaggerated because there are literally thousands of suppliers in the chauffeur-drive field. They are also much more regional than global in the consistency of delivery of service and price. Paying attention to duty of care is paramount with the chauffeur-drive suppliers, limo, black-car, shuttle and charter busing space.
Another dilemma is with taxis and TNCs (transportation network companies) such as ridesharing companies.
If you want to get the best fit that offers your company the most proficient services for your travellers while paying attention to duty of care and satisfying your procurement departments goals of saving money you have to source your ground transportation. The most effective way is to go to RFP.
What needs to be addressed in the RFP
Just because a supplier states they are the biggest doesn't not mean that they are the best fit. Just because they are the least expensive does not mean they are the one you should choose. Just because in their marketing material they say their technology is the best and provides an amazing experience for the traveller does not mean that it will work as promised in reality.
It also does not mean that their clams aren't real.
You have to examine the facts through a pragmatic objective process to determine the reality of the offering.
- Speaking with existing customers, but not just those they recommend you speak to
- Read the press, not everything that is printed is accurate but you can see trends
- Talk to experts in the field
- Pay attention to fleet age, makes, models and condition. Rental car and chauffeur-drive companies telegraph the health of their fleet. When fleet becomes aged with high mileage and/or travellers run into no cars or dirty cars, it is generally a sign that there is a systemic problem related to profitability. In the chauffeur-drive space it can vary greatly by supplier by area and from new to 10+ years. Most of the major players' fleet ranges from one to three years' old.
Sourcing car suppliers
I do not believe in an 80/20 rule to sourcing a supplier or anything similar. When one takes any segment of the transactions other than all of it to determine the outcome of the whole you get a biased outcome that may not be representative of the actual savings or service offering. Pricing and service can vary greatly by location and by looking at all areas it can add up to a lot of money and improved service levels. It is such a competitive environment that when you do not drill down a supplier on pricing in a segment or location they will most likely charge a higher price to try to be profitable. You can't blame them.
If you are going to do it right, choosing a supplier is just not easy. You might think you will just work with your existing supplier and not go to RFP because you like them. But I will tell you this, despite what you get in concessions you will still be leaving money on the table. You may also might miss out on other suppliers that have now become better or innovative new suppliers that have built a better mouse trap.
Just when you think you have sourced the most important items of a travel programme the industry changes and has created a whole new category to pay attention to. Additional items used to go under the tax column and was reserved for taxes, but today all sorts of charges fall into that area including energy charges, pass-through fees, airport surcharges and airport fees to name a few. Unbundling is very complicated and a growing concern. It can add up to a lot of money.
Choosing the best supplier for your company requires considering many factors and objective measurement. Take the subjectivity out of the equation, weigh the facts and you will find what supplier or which suppliers will best fit your needs.