Formed in 1973 Industrial Fleet Management (IFM) has for over four decades helped manufacturing and distribution companies save tens of millions of dollars on their fleet costs. IFM has worked with small businesses to some of the most well-known Fortune 500 firms. In fact, some of their clients are members of the North American Building Material Distribution Association (NBMDA). IFM’s method of helping businesses save money is simple and can also prove invaluable for NBMDA members.
IFM Chief Executive Officer Jack Mandato explains, “We review the costs clients face in running their truck and material handling fleets. This free review includes full service and finance lease, contract maintenance, taxation, fuel, and other costs. So we take a comprehensive look at a company’s equipment-related fleet costs. Mandato adds, “Our job is to determine for each individual client where there are financial opportunities to take advantage of that will reduce their costs of running their fleet.
Mandato says these savings opportunities can come from a number of areas. For example, companies may find savings in better negotiated purchasing of fuel or improving on equipment leases. IFM manages to find these savings by staying up-to-date on industry changes. Mandato says, “If we find something like a new tax law for example that might help a member reduce their costs we can make them aware of it.”
Part of Mandato’s success lies in his diligence at staying knowledgeable about industry. He recently had a meeting with Tesla, the electric car manufacturer. Tesla is planning to release an electric powered truck that could change the fleet industry. Mandato is leaning as much as he can about this new truck and how it may one day benefit IFM clients. “Anything that we can pass on to a customer or NBMDA member that could help their business we will find,” says Mandato.
IFM also utilizes its knowledge of fleet industry best practices to guide the recommendations made to clients. They review thousands of lease rates, maintenance charges, fuel transactions, and equipment acquisitions each year. In some cases, companies are doing well without IFM’s assistance; however, for the majority of clients additional savings can be achieved. Regardless, every client will receive IFM’s comprehensive report on their fleet, detailing how their costs stack up to what IFM sees in the marketplace.
“When we share these findings with the client, we also address what alternatives may be available to how they are running their fleets today. For example, full service leasing isn’t the only solution, particularly as it has grown more and more expensive compared to the alternatives,” adds IFM General Manager Joelle Marr.
She adds that savings opportunities also exist for NBMDA members that own their truck fleets. For example, IFM helped coordinate a recent partnership between NBMDA and Navistar that allows members to receive rebates on the purchase of International equipment.
Once the client has received the report they can make the recommended changes or chose to make no changes at all. If a company decides not to make any changes IFM does not make any money. However, that company still obtains an in-depth look into the efficiency of their company.
For clients that wish to make the recommended changes, IFM will work with the company and its vendors to make the cost savings a reality. “Only once those costs savings are achieved, does IFM receive any fee. That fee is based on a share of the actual savings as those savings are realized,” says Marr. “Essentially, our clients pay as they save, but they are never left short changed.”
And the time may be now for NBMDA companies to consider working with IFM to lower costs. Mandato says the company is currently offering a discount on top of their normal savings. The amount of savings realized depends on a number of factors, including the size of the fleet but Mandato says he has clients that have saved millions. “For NBMDA members with an average of 30 to 40 full service leased trucksthere’s an opportunity to save as much as $200,000,” estimates Mandato.
Some companies that are currently working with IFM include The Sherwin-Williams Company, Smithfield Food, and CORT Furniture.
IFM’s relationship with the NBMDA is still relatively new and Mandato looks forward to working with additional NBMDA companies. “We believe the upcoming meeting in Colorado will help us build working relationships with NBMDA companies. I think many will find we have a lot to offer them,” says Mandato.
Ultimately, IFM’s main goal is to build a relationship with clients and help them save money where possible. “For some companies the cost to get out of bad leases can be astronomical. The leasee needs protection. They need to pay the right price and have protection in the lease that gives him flexibility to make a change if needed,” Marr says.
“The reason I went into this business is because my experience as a salesman in the leasing industry showed me how the contracts were so one sided. The older, loyal customers paid more money than the new customers. The new customers were often more prudent when negotiating a lease, and would receive a better deal than older customers that just renewed every time a lease ran out. It’s a market where you really need to be aware of what is really happening,” says Mandato.