Operations

Global Transportation Consolidation More Difficult Than it Appears

Posted on October 10, 2007 by LCT Staff - Also by this author - About the author

BOSTON — Chauffeured car service providers are growing their franchise and affiliate networks and improving upon existing technologies that coordinate purchasing, but it remains to be seen whether these trends help corporations consolidate multinational ground transportation buying with fewer suppliers, according to an article in the Transnational, a major business travel publication.

Ground transportation typically accounts for up to 10% of corporate travel expenditures in the United States and an even higher proportion overseas, according to Carlson Wagonlit Travel. Some multinationals have shown interest in finding ways to consolidate and control those costs.

Bob Steiner, procurement director for decision-support firm Fair Isaac Corp., said his company launched a multinational car rental program when he joined in mid-2004. The company is now looking to develop a similar multinational provider for chauffeured car services. "We do it on a case-by-case basis right now, but we're looking at globalizing the entire thing," Steiner said. "Once you've done your air and hotel and everything else, you start looking at the lower hanging fruit out there, and ground transportation is one of those areas."

Though buyers may like the idea of a single ground transportation provider for their worldwide needs, a number of hurdles exist. For one thing, the industry remains in the early stages of creating global branding and connectivity.

Carey International in July announced a new alliance network that links network partners to its 250 franchise operators. With the franchises and network partners combined, Carey offers branded service in 550 cities across 65 countries.

"Our global corporate clients naturally assume complete information is always provided, so by providing information regarding the Carey Global Franchise Network on every booking, we are definitely meeting that need," according to a prepared statement from Carey president and CEO Gary Kessler. BostonCoach, with 155 international affiliate locations, is also looking at expanding overseas.

U.K.-based Tristar Worldwide Chauffeur Services has structured its growth around a "transatlantic hub," according to Mike Fogarty, the company's U.S. chief executive. The company also offers central billing, with consolidated invoices in either U.S. or British currency.

Dav El, whose network of partners also covers more than 550 cities worldwide, offers clients a program that links global distribution systems such as Sabre with Dav El's inventory to provide "real-time" responses to online reservations for anywhere the company offers service, according to the company's website. The company also offers customized billing options and consolidated invoices so that corporations can more easily consolidate their system-wide expenditures, even if they do not have a single global agreement.

Meanwhile, such technology providers as FleetBook, GT3, and GroundRez continue to build out solutions designed to improve the management of reservations and reporting.

Despite these developments, Dav El Chauffeured Transportation Network president and CEO Scott Solombrino suggested that globalizing a ground transportation program may be more difficult than it looks.

"We do have more people asking for this type of RFP than we've seen in the past," he said. "Companies are really trying to consolidate ground at every level — but it's a trend that may not last,” said Solombrino. Ground transportation still has, in some parts of the world, a local connotation associated with it for a wide variety of reasons, most of which are regulatory and beyond our control. We do get asked; we do participate and have been awarded deals, but as people get into the details, they realize it sometimes doesn't work"

The complexity of various governmental and insurance rules and regulations on car services around the world "play a bigger role than you might think in a large program," Solombrino explained.

Travel managers should be aware that car service needs are often quite different from one market to another, Solombrino said. For example, a local corporate office in India may require bus service to transport employees to work on a daily basis, while another local office in Paris may need VIP service for executives. Regional approaches sometimes produce better results, he said.

Some companies choose to consolidate car service providers in an area such as Europe and then use the volume as leverage for better rates in another area of the world. Still other companies that attempted to consolidate with one global chauffeured car supplier are now returning to a localized approach to sourcing, Solombrino said.

SOURCE: The Transnational — ProMedia Travel

View comments or post a comment on this story. (0 Comments)

More News

Chauffeur Retention Made Easy: Show You Care

WEB-X-CLUSIVE: The key to happy employees is understanding what they mean to you and your business.

California Operations Combine To Span Regions

Classique Limousines Worldwide in Orange County buys Showcase Limousines based in the Inland Empire.

Renault Purchases Tech Startup Karhoo

The taxi comparison app has found new life with the French carmaker.

Lincoln Ends 2016 With 10% Sales Increase In U.S.

The increase comes against a luxury market that saw gains of less than 1%.

Houston Operations Merge To Form Big Regional Service

Avanti Transportation and A Ambassador Transportation combine complementary vehicles, markets, and clients into 135-vehicle fleet.

See More News

Facebook Comments ()

Comments (0)

Post a Comment

Submit

Blogs

See More

See More

See More

See More

LCT Store

LCT Magazine - January 2017 $12.95 THE MONEY ISSUE COVER STORY: * Dashboard Helps Steer Company Finances * *



Connect

Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The number 1 resource for vocational truck fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close