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| | '''''NAFA's Guide to Fleet Vehicle Policy Development''''' | | '''''NAFA's Guide to Fleet Vehicle Policy Development''''' |
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| - | This is the current working draft of NAFA's new book on fleet policy development. All changes and additions must be made before June 1, 2007, when this forum will be closed and the draft will be sent to the editorial committee. Please log in to contribute or create a user name for yourself by clicking the link in the upper-right of this page. | + | This is the current working draft of NAFA's new book on fleet policy development. All changes and additions must be made before November 1, 2007, when this forum will be closed and the draft will be sent to the editorial committee. Please log in to contribute or create a user name for yourself by clicking the link in the upper-right of this page. |
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| | [http://www.nafa.org/books Back to NAFA books.] | | [http://www.nafa.org/books Back to NAFA books.] |
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| - | Overview of Fleet Policies & Procedures | + | Overview of Fleet Policies |
| - | • As policies may be specific to particular vehicles and applications, so too, may they be specific to the company or government agency that is responsible for the vehicle. Many times two different fleet managers will develop the same policy but they are expressed in completely different ways. This may be a result of the style of the writer and as much if not more so the desire to blend the essence of the message to mirror existing company or agency policy in structure and tenor. This guide will not provide instruction on how to write policies and procedures, but rather is will provide suggestions which will enable the fleet manager to construct clear and effective communication. When establishing a new policy or procedure the fleet manger may realize an advantage to concentrate first on the substance, expressing the message clearly, then to craft it into the profile of other communication that is in place with the Company. In this method the fleet manager concentrates on the substance first and then integrates the communication into a style consistent with other company or agency communication. After reviewing this guide, the fleet manager may realize that there may be significant opportunities to protect the safety and well being of the employee, the company and the equipment.
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| - | == Eligibility for Company Car/Vehicle ==
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| - | Eligibility for Company Car/Vehicle
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| - | • The eligibility for a Company vehicle may be predicated by a variety of reasons including but not limited to:
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| - | Need based. The vehicle is assigned to a driver because it is an integral tool in the performance of their job. This may include a sales representative, a technician who may be on call after hours, a specialized or officer of rank, or other such scenario. This may or may not provide for take home privileges.
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| - | Non-need based. This is typically reflective of senior management or special performance-based recognition in which the vehicle is not an integral part of that person's job requirements. In this instance the type, cost, level of equipment and term of eligibility may vary widely from company to company. Prior to implementing new policy in this area, The fleet manager will eliminate a significant amount of angst to ensure senior management has reached an absolute consensus regarding the specifics of and potential loss of eligibility.
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| - | == Use of a Personally Owned Vehicle ==
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| - | Use of a Personally Owned Vehicle
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| - | • Will the use of a personal vehicle be authorized and compensated for to make occasional business specific errands ? Will a personal vehicle be used each day to go to the post office box before arriving at the corporate office each morning ? While these examples may be at the extreme end of the spectrum, these scenarios clearly exist. If a crash or loss were to occur have expectations been clearly spelled out and understood ? Have the following concerns been addressed :
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| - | Does the employee understand that they will need to notify their automobile insurance carrier of the frequency or annual work related mileage which may result in a raise in their insurance premium ?
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| - | Has your company established minimum insurance levels which may be significantly higher than that of which the employee would typically have in force ?
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| - | Does the employee understand that regardless of a flat rate or per mile compensation, they will be responsible for all maintenance, repairs and losses due to crashes and other occurrences ?
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| - | Has your company established minimum standards regarding the exterior and mechanical condition of a personal vehicle used for business purposes ? As one can well imagine, given the nature of the position and many other factors this point is akin to the dress code of a specific company and the clients that they interact with on a routine basis. How will this be enforced ?
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| - | If the employee's vehicle experiences downtime due to significant repair, does the employee understand that they will need to bear the cost of a rental vehicle regardless of their compensation ?
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| - | == Authorized Cars/Vehicles & Optional Driver-Paid Equipment ==
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| - | Authorized Cars/Vehicles & Optional Driver-Paid Equipment
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| - | • Similar to who is eligible for a company vehicle, The breadth and depth of vehicles and optional equipment can quickly be daunting unless controls are established.
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| - | Who can, and specifically who cannot drive a company vehicle ? Are there exceptions and how are they addressed ?
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| - | If an employee is assigned a vehicle and it is taken home and parked in the driveway Friday evening, Saturday morning the employee's son with a valid drivers license wants to shoot basketball in the driveway and moves the car and backs into the neighbor's mailbox, what are the consequences ? Can the spouse of the employee use the vehicle to make a quick run to the store ?
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| - | Is the employee allowed to take the vehicle on a vacation with his family ? Is he required to pay the company mileage for personal use ? If the answer is yes (according to clear IRS guidelines) who manages this process and makes the payroll deductions ?
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| - | Does the Company or agency have a selector list of multiple vehicles or different trim levels based on specific criteria ?
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| - | Are driver paid options or upgrades allowed ? If a driver pays for an upgraded stereo and sunroof and is either demoted, fired or losses their license two months after receiving the vehicle, how will this be handled ? Are the cost of driver paid options collected in full prior to the vehicle order being placed ? Was an agreement signed ?
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| - | Is a driver allowed to install items such as a trailer hitch, roof luggage rack, dark tinted windows or bodyside moldings ? Are vehicles allowed to have bumper stickers, license frames, after market fog lights, remote starters or other equipment ? If this is allowed are the employees free to install items themselves which may possibly involve electrical connections or drilling into surfaces ?
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| - | == New Car/Vehicle Delivery ==
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| - | New Car/Vehicle Delivery
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| - | • When a new vehicle is ready for pickup at the dealer, or is delivered directly to the driver by other means, is the driver
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| - | expected to perform the following activities ?
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| - | Perform a walk-around inspection of the vehicle and ensure that it does not have any damage and all optional
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| - | equipment is in place and functional ? What is the chain of communication if discrepancies are identified ?
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| - | Will the driver need to register the vehicle or perform an activity to assist with the registration process ? Are all
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| - | parties clear what expectations are ?
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| - | How and when is the driver to advise the fleet manager that the new vehicle is on road ? This may impact insurance coverage, billing, and or warranty start dates for both the vehicle and any upfitting.
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| - | This may also trigger a “watch clock” on license and registration activities and internal accrual for accounting
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| - | == Car/Vehicle Replacement ==
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| - | Car/Vehicle Replacement
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| - | • Vehicle replacements may be decided by one or more of the following factors: mileage, age, mechanical or cosmetic conditions, suitability for a particular purpose or application, promotion or demotion, accident or other factors. The fleet manager may initiate some replacements while other replacements are communicated to the fleet manager by other members of the organization. Are replacement parameters clear and understood by all parties ?
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| - | == Disposition of Used/Pre-Owned Car/Vehicle ==
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| - | Disposition of Used/Pre-Owned Car/Vehicle
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| - | • Most fleet managers understand that leveraging various remarketing channels may provide for increased residual value and, if employee sales are allowed may provide for enhanced employee relations and lower maintenance due to the fact that the driver usually takes better care of the vehicle if they have an opportunity to purchase at termination.
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| - | Are employee sales allowed ad if so is it open to all employees or just the driver ?
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| - | How is the selling price determined ?
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| - | Are all monies collected up front and are taxes fully understood by employees ?
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| - | Are any warranties provided or expected ? What assumptions are made and by whom ?
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| - | If employee sales are not allowed or no one is interested then what is the best remarketing channel ?
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| - | When are vehicles to be turned in and when ? Are signed receipts required ?
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| - | If employee sales are allowed, are safeguards in place to prevent or detect potential "packing" of repairs or maintenance items. An example would be the vehicle had all tires and brakes replaced 10,000 miles ago but prior to the employee sale they were replaced again. The sale of vehicles should be contingent of "as is - where is" Significant prior repairs may require a vehicle cost adjustment. The same may be regarded for recently found body damage.
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| - | == Personal use of a Company Car/Vehicle ==
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| - | Personal use of a Company Car/Vehicle
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| - | • Personal use of a Company or Agency vehicle may be predicated on many factors including but not limited to the following:
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| - | No use other than strictly business purposes. This is typical of specialty use and purpose-built vehicles such as emergency vehicles, Upfit and specialty trucks and vans and the like. Typically these vehicles have no other purpose other than the task that they were specifically designed to perform and often carry Company inventory, tools or equipment.
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| - | Limited use by the employee that the vehicle is assigned to. This may include transporting immediate or household family members for a limited nature or duration.
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| - | Unlimited personal use by the employee. This may include use of the vehicle for vacation purposes.
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| - | Limited or unlimited personal use by employee and their spouse/partner or immediate household members.
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| - | • If a Company vehicle is not allowed for use of any kind outside of the scope of work are the specifics clearly spelled out?
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| - | • If limited use is allowed, are the following items specifically addressed:
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| - | The number of passengers must not exceed the number of factory installed lap/shoulder and each passenger must properly wear the devices.
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| - | No cargo may be carried on or within the vehicle unless the vehicle is specifically designed and equipped to do so. If personal cargo is to be transported it must be adequately secured to eliminate the possibility the load shifting, possibly injuring the operator, other passengers or creating a hazard. It must be stated clearly that the vehicle is a Company / Agency asset which is designed to further the goals of the company or Agency. As such it is not intended to serve the personal needs of the operator.
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| - | Are trailer hitches, aftermarket luggage racks or other similar equipment allowed ?
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| - | If personal use includes vacation or similar purposes, is the employee required to reimburse the Company or Agency for personal mileage ? If so at what rate ?
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| - | If use is allowed by members of the household other than the employee, are there hours of use, age, and licensing considerations ? Will MVR's be required on those individuals ?
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| - | If an employee incurs a short or long term disability, up to and including participation in the FMLA program, do they still retain the assignment of the Company vehicle ?
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| - | Personal use rates are handled in several different manners. While few Companies do not require any driver reimbursement, other companies may charge a flat rate per week or month. In this instance a set amount such as $20-$50 per month may be charged by the company to cover the privilege of "occasional personal use". This scenario is typically a nominal amount which takes into consideration inevitable personal use with no bookkeeping. The majority of Companies rely on a structured Personal / Business mileage reporting program whereby the operator provides a report of all personal and business mileage each month. This is promulgated by IRS and Canadian Government regulations. For guidance of US based companies reference <www. IRS.gov> and search for publication 15-B
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| - | Although the IRS provides several methods of accountability, The essence of the program states that Personal mileage is defined as any personal use of the vehicle such as commutes, vacations personal errands, or any use during short term disability. Personal use of a Company vehicle is included as taxable income on the employee's W-2 utilizing IRS formulas which may be adjusted from time to time.
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| - | Additional important information relating to company vehicle and employee provided transportation related compensation scenarios and formulas may be found in publication 15-B and also <http://ecfr.gpoaccess.gov > search <title 26> then select <1.61 - 1.169>
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| - | Need Canadian specifics.
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| - | == Preventive Maintenance, Repairs & Warranty ==
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| - | Preventive Maintenance, Repairs & Warranty
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| - | • Maintenance and repairs of company or agency vehicles is required to varying degrees depending on a variety of factors. Typically the frequency will depend on the manufacture's recommendations and any adjustments based off of time, application or special circumstances. Understanding that maintenance and repairs are one to the three leading cost categories (behind depreciation and fuel) of vehicle operations, excessive operating costs may be quickly realized by either too much or too little maintenance and subsequent repairs. Additionally, when less than prescribed or substandard mechanical attention is applied to a vehicle it may result in significant risk exposure, Company or Agency image and employee satisfaction and retention.
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| - | • Significant opportunities may be lost when vehicle operators are unaware of the specifics and term of the warranties that may cover their vehicle. Manufacturer's warranties may change from year and from model to model. Therefore it is imperative that at the first notice of any concern with the vehicle, the operator advises either the company or person responsible for vehicle maintenance.
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| - | Are vehicle operators and their supervisors clear on the time and or mileage intervals that apply to individual vehicles ? Do vehicle operators know where to take their vehicle for maintenance and repairs and what instruments (maintenance card) need to be used ? Does the repair facility need to request authorizations for repairs if over a specific dollar amount ? Is s the vehicle operator able to request repairs or maintenance that are not authorized ? How are conflicts resolved ?
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| - | What are expectations for adherence to maintenance guidelines ? What steps are taken by management to monitor compliance ? Is there a progressive discipline which will escalate non compliance issues ?
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| - | Are all parties clear on conditions of the base manufacturer's warranty and any extended warranties that may be applicable to specific vehicles ?
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| - | Does the truck, trailer or equipment require annual Safety inspections as regulated by the DOT or other Agencies? What is the frequency and where are the documents to be retained? Who is responsible for subsequent ongoing inspections?
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| - | == Accident Reporting ==
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| - | * * * Added text of possible additional category here. See below for Accident Reporting
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| - | Operator and Equipment Training
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| - | • Safety must be the cornerstone of any progressive fleet. This includes the ability of any operator to know, understand and use not only the safety equipment, but all attributes of the equipment itself.
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| - | Does the vehicle require safety equipment due to DOT, contractual, or environmental regulations?
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| - | Is there initial and ongoing training regarding the appropriate use of all equipment ?
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| - | Has the operator fully read and understands the owner's manual for the vehicle and any additional equipment?
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| - | Are additional manuals available for quick reference?
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| - | Are supervisors familiar with all manuals? Is there a mechanism which ensures all new hires or transfers become familiar with all safety devices and equipment ?
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| - | Are there policies which, at a minimum, provide guidance for the change of a tire, jumpstarting or emergency refueling?
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| - | Are interlock or other devices installed by the OEM to prevent injuries? Are these inspected upon the initial delivery and on an ongoing basis with supporting documentation?
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| - | Are DOT manifests or logbooks required? Who will be responsible for auditing and retention?
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| - | * * * * Accident Reporting * * * *
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| - | Accident and Crash Reporting
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| - | It is important to understand that in the context of this guide, an accident and crash are treated as an unplanned activity. The advancement of the fleet management lexicon has changed from using the word "accident" to now using the word "crash". This is typically used when one vehicle is involved in an unplanned collision, whether it is another vehicle, object or person. While it is important to refer to a "collision" as a "crash", unfortunately there are other scenarios which may create either significant personal injury, liability or risk exposure. If an employee is using a piece of equipment that is either part of or even detached form the actual vehicle, or the employee injures themselves in or on the vehicle without the involvement of another vehicle, person or object, the fleet manager may consider some of the following points which may be applied in variety of applications. Therefore while using the correct terminology is important, this guide will attempt to engage thought for most situations regardless of the type of vehicle or equipment that may be involved.
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| - | • It is important to clearly communicate that each vehicle operator must report all accidents immediately, regardless of fault, minimal or lack of visible damage, or details. Extreme situations such as a catastrophic loss or a fatality further underscores the need for immediate communication regardless of the situation or condition of those involved. The importance of this activity cannot be understated and many Companies or Agencies have conveyed this urgency by the directive or instructions having been communicated by the President, Commanding Officer or the senior most person within the company or agency.
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| - | • If a Company or Agency recruits the best operators, provides the best initial and ongoing training and maintains the safest vehicles to the highest degree, regrettably there will be accidents. Accidents may range from a simple low speed "fender bender" in a parking lot to a situation where one or more fatalities are involved with the Company or Agency vehicle, the other party, or both. The manner and urgency in which a sequence of events that are internally set in motion will have a direct impact upon the ability of appropriate personnel to respond appropriately. In extreme cases this will have a profound effect in regard to human suffering,
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| - | Do all vehicle operators and their immediate supervisors fully understand the need to immediately report any vehicle or equipment activity that was either unplanned or unwanted ? Has Senior Management or Command agreed upon and will immediately enforce significant disciplinary actions to operators who do not report information as soon as practicably possible ?
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| - | When information is received who is responsible for reviewing and investigation reported activities ?
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| - | Depending on the seriousness of the situation, is there a clear hierarchy of immediate notification within the Company or Agency to Senior Management, Command, Human Resources or Risk personnel ?
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| - | Does the Company or agency have a disaster recovery plan in the event of a catastrophic occurrence ? Has this been rehearsed internally ? Have allowances been made for the absence of key personnel during vacation, offsite meetings or after hours notification ?
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| - | If the incident involves a fuel or other hazardous material leak or spill is there a recovery plan in place ?
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| - | Does the Company or Agency have a policy which only allows pre-identified people to or Departments to solely respond to media or press inquires and that no other employees are permitted to make statements on the employers behalf?
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| - | Is there a clear process in place to investigate and respond to allegations of unsound or unsafe vehicles or equipment in which the operator claims was a result or contributed to the cause of the accident ?
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| - | Is there a daily, weekly, monthly or yearly visual inspection which will identify potential "unknown" or " unattended" damages ? Are the discovery of which reported with the same urgency as known activities.
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| - | Is employee assistance or counseling available to employees who have been directly or indirectly involved a catastrophic activity ?
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| - | == Motor Vehicle Records and Violations ==
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| - | Motor Vehicle Records and Violations
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| - | • The ability for an employee to posses and maintain a valid operators license, including applicable endorsements or supplemental licenses is creates the very essence of their eligibility to operate a Company or Agency vehicle. While obtaining Motor Vehicle Reports may be a function of the Fleet Department, many times this falls under the auspices of the Human Resources Department and is often a product of a third-party vendor which may provide economies associated with background checks.
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| - | Are MVR's obtained for new hires as well as transfers and promotions? Are they verified annually? What actions are taken when and by whom when concerns are detected? Is there a "grading" of minor and major moving offences which may result in either probation or loss of eligibility to operate a vehicle? Does the Company or Agency impose a duty for the employee to immediately notify their supervisor or Human Resources of any change or adverse change of their license ? Is there a provision while an employee challenges or disputes an adverse action against them through legal or court remedies?
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| - | Is the license adequate for class of vehicle that the employee will or may operate? This could include endorsements, class, grade, or supplemental licenses. Specific license requirements may be predicated by not only the State that issued the operators' license, but also the type of vehicle or Gross Vehicle Weight Rating (GVWR) of the vehicle that will be operated.
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| - | While there are minimal State by State variations for passenger cars and vehicles with a GVWR of under 10,000 lbs., Vehicles between 10,001 and under 26,000 GVWR, Vehicles towing a trailer with a with a Gross Combined Weight Rating (GCWR) of 10,001 Lbs. And under 26,000, or vehicles that carry 16 passengers or more usually require an endorsement, class change or in certain States, a Chauffeur's license.
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| - | Specifically regarding vehicles with a GVWR or GCWR of 10,001 Lbs. or more that are solely within one State are regarded as intrastate are subject to the laws of the state that the vehicle is registered in. If the vehicle crosses any State line then it is classified as an interstate vehicle and both the vehicle and the operator are subject to basic Federal Department of Transportation (DOT) regulations. In this instance the following regulations apply.
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| - | The operator must posses a valid medical card
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| - | The operator must posses a drivers log or manifest
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| - | The vehicle must be identified with a DOT number
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| - | The vehicle must have a record of an annual DOT Safety inspection
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| - | The vehicle must have specific safety equipment
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| - | The Company or Agency must perform specific activities regarding the following:
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| - | Be familiar with and conversant in applicable DOT rules and regulations applicable to their operation
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| - | Maintain a separate driver's qualification file and perform prescribed activities
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| - | Maintain an accident log per DOT regulations.
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| - | Even if a vehicle does not cross a State line, and therefore is engaged in intrastate operations, each state may adapt all or part of the Federal DOT regulations. This means that what applies to one vehicle that is operated solely in one State may be entirely different to that of the same vehicle operated in an adjoining State.
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| - | When an employee operates a vehicle with a GVWR of 26,001 Lbs. or more, tows a trailer and has a GCWR of 26,001 Lbs. or more, or carries more than 16 passengers, they are required to posses a Commercial Drivers License (CDL) which is a Federal requirement administered through each State's licensing agency. When a CDL license is required, the Company or Agency, vehicle operator and the individual vehicle(s) are held to significantly higher standard of regulations, recordkeeping and performance than that of other vehicle configurations. The depth and breadth of requirements, qualifications and penalties associated with CDL related operators and vehicles are substantial and complex. Fleet Managers of equipment that falls under these guidelines should refer the Federal Motor Carrier Safety Regulations.
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| - | == Registration Renewals ==
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| - | Initial Registration, Renewals, Property Tax and Permits
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| - | • Several areas of opportunities may present themselves regarding the licensing of vehicles.
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| - | When an old vehicle is being replaced by a new vehicle and it is a passenger car or light truck with a similar GVWR, the license plates may be transferred from one vehicle to the other, which may provide for cost savings.
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| - | If license plates are not transferred, it is important to understand the requirements for the disposition of the old plates. In some States, unless the plates are received and documented in accordance with individual regulations, The registered owner may be liable for ongoing taxes and or penalties even though the old vehicle may be off road and even sold
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| - | Whether the license plates are transferred or not, it is critical that the registration of a new vehicle be performed to exacting standards which may include the following scenarios:
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| - | The delivering dealer may perform the temporary paperwork and initial registration with the State.
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| - | The delivering dealer completes the temporary paperwork and gives the remaining paperwork to either the vehicle operator or Leasing Company to complete on their own. This is often the case when an individual State requires either a VIN inspection or some type of safety inspection which may or may not be completed by the delivering dealer.
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| - | Many times when a truck has been upfitted with a body or specialty equipment, paperwork containing a second stage MSO, the cost of the upfitting, a weigh slip and or photographs may be needed, by the registering
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| - | The paperwork is completed by a third party other than the dealer. In this case an "agent" may complete all paperwork and have it delivered to the driver, while in another scenario a transport company may complete all registration activity while en-route to delivering the vehicle to the driver.
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| - | When registering medium and heavy trucks it is important to understand the regulations and needs of specific weight classes and or apportioned tags. This will depend on the GVWR of the vehicle, the registering State, the anticipated operational footprint of the vehicle. While some States base the registration on the manufacturer's GVWR, other States rely on the "declared weight" of the vehicle.
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| - | In States that utilize personal property tax,
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| - | == International Travel ==
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| - | == Personal Property Taxes ==
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| - | == Insurance ==
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| - | == Equipment Transfer ==
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| - | == Rental Cars and Pool Cars ==
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| - | Add section for vehicles >10,001 Lbs. GVWR and also . 26,001 Lbs. (Plus GCWR's).In essence a Commercial Motor Vehicle Primer including references to:
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| - | Overview
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| - | Where a CDL enters in
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| - | Medical Card and D & A testing and when
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| - | Random Drug testing
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| - | Driver files
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| - | Etc.
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This is the current working draft of NAFA's new book on fleet policy development. All changes and additions must be made before November 1, 2007, when this forum will be closed and the draft will be sent to the editorial committee. Please log in to contribute or create a user name for yourself by clicking the link in the upper-right of this page.
