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At A GlAnceDamage happens to vehicles while in transit, be it weather related or transportation related. To help mitigate the potential expense and downtime, fleet managers can: •Ensuretheyhaveaplaninplaceforwhen

damage happens. •Understandwhoisresponsibleforvehicledamage,whetheritbethedealerorOEM,and know who to call.

•Adjustvehiclespec’ingandupfittingtoreducepotentialcostsofdamagedvehicles.

Fleet managers often depend on vehicle transport companies to deliver fleet ve-hicles to satellite locations or drivers

from dealerships, pool locations, or up-fitters. During this time on the road, be it via a transport truck, rail car, or ship, a lot can happen before a vehicle is even is-sued to a driver.

While viewed as a potentially small-er concern among the myriad issues fleet managers deal with daily, vehicles do get damaged in transit, and there may not be much fleet managers can do about it. Subject-matter experts weigh in on the issue and provide advice on actions that can be taken.

Damage HappensWhile not a high-volume vehicle concern, every ding, dent, or ful-ly totaled vehicle costs a company time and money, all while creat-ing headaches for the fleet man-ager. Top causes for vehicle dam-age in transit include weather- and transport-related damage due to carelessness or accidents.

“Considering the amount of or-ders Donlen places annually, it is not often that vehicles are damaged in transit; however, when they are, it is frustrating and challenging for both Donlen and our customers,” said Cindy Gomez, director of vehi-cle acquisition services at Donlen.

Phil Schreiber, fleet manager North America, OTIS Service Center, noted that he sees about five to 10 vehicles damaged in transit each year. “However, I think it happens more often and is due to careless-ness and a lack of knowledge with work-ing equipment,” he said.

“John Conte, supervisor – sup-ply chain at ARI, noted that “from March 2014 through February 2015, there were 36 documented cases of

new vehicle damage facili-tated by ARI’s Vehicle Sup-ply Chain team. Of those 36 situations, 18 — or half — were weather related, and the other 18 were transit related.”

Jan Freund, director of manu-facturer relations at Wheels Inc., reported being notified of approx-imately three to four damaged ve-hicles per month across all man-ufacturers.

Weather is a top cause of vehi-cle damage, with hail being the prime culprit.

“Hail damage is the most com-mon, and, unfortunately, the dam-age that can be sustained to a vehi-

cle in a hail storm can quickly add up. In extreme cases, such damage could cause a total loss if the cost to repair the vehi-cle extends beyond what makes economic sense. Other situations that can result in damage include train derailments, acci-dents involving commuter vehicles, floods, and vandalism,” Conte said.

And, the amount of damage due to weather can vary by time of year, as well.

“There are certain times throughout the year — spring in the Midwest in par-

ticular — when hail storms are frequent and multiple damage incidents can occur within the same time frame,” Conte said.

If vehicles remain in one outdoor lo-cation for long periods of time, they are further susceptible to increased damage.

“Weather is the primary cause of vehicle damage. We are seeing more vehicles on hold in a secure lot for quality control. So, when an act of nature, such as a hail storm, occurs, more vehicles are affect-ed. Before this practice, damage would be a small chip from road

debris; now, we are seeing more signifi-cant damage that can result in the total-ing of vehicles,” said Elizabeth Kelly, di-rector of operations, vehicle acquisition at LeasePlan USA.

In addition to hail, floods are also a ma-jor concern. “Flood damage has become more prevalent due to manufacturers moving production overseas,” Kelly said.

However, transit-related damage also can occur.

From hail to carelessness to simple scratches and dents to completely totaled vehicles, damage during vehicle transit does happen and can cost a company time and money. Can anything be done? By lauren fletcHer

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Roof damage can occur when a trans-port truck doesn’t make it under an over-pass due to height clearance.

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“We have seen roof damage to vehicles while en route to the dealer caused by car-riers going through an underpass that does not meet the height clearance. Unloading vehicles carelessly at the dealership has also caused damage to bum-pers of the vehicles and rail dust has caused damage to the exteri-or paint,” said Gomez of Donlen.

Extreme cases also occur. “We have also seen vehicles fall off rail cars or trucks, but this is rare,” Kelly said.

Handle the unavoidableTransportation-related vehicle damage is a perennial problem, and some do not see it improving.

“This problem always existed and I do not see year-over-year im-provement,” said Schreiber of OTIS.

Some vehicles may wait longer for shipment, causing some increased dam-age as well.

“In 2014, we saw vehicles sitting wait-ing for shipment at ramps and at the as-sembly plants, so there were a few more damaged vehicles; however, it has not re-ally been a problem this year,” said Freund of Wheels.

Others are also seeing an improvement, noting an increased quality of communi-cation regarding the vehicle transporta-tion process.

“Damage to vehicles in transit is not necessarily on the rise. In-stead, we are hearing more about the damage due to better commu-nication from the manufacturers,” said Kelly of LeasePlan.

Conte of ARI agreed. “I do not believe that there is a ‘spike’ or upsurge in in-stances of damage corre-lated to transportation — there is just more visibility into the process and fleet managers are more cogni-zant of it than they have been in the past,” he said.

When life Hands you lemons…What can fleet managers do about transit-related vehicle damage? For the most part, Schreiber of OTIS Service Center summed it up neatly: “Nothing.”

Freund of Wheels agreed, explaining that “this is an issue between the carri-er and the manufacturer. Fleet managers cannot control this.”

This was seconded by Gomez of Don-len, who noted that “unfortunately, this is not avoidable and is completely out of the fleet managers’ and FMCs’ control.”

However, it may not be totally un-avoidable.

“Partnering with reputable transpor-tation vendors that have a proven track record of low damage is the best tool to mitigate the chances for damage to occur. The same applies for damage that occurs on a dealer’s lot. Having a strong part-nership with the dealership will help ex-pedite the repair and get the vehicle into the client’s hands as quickly as possible,” said Conte of ARI.

Additionally, adjusting vehicle spec’ing and upfitting options may help reduce the potential for transportation-related vehi-cle damage.

“Fleet managers should consider the up-fit required for their vehicles. Any addi-tions that change the height and/or width of the vehicle, such as rear-view mirrors, ladder racks, light bars, etc., could be im-pacted during rail or truck transport. It is best to request these items be stowed in

the vehicle until it reaches its final destination,” said Laurie Hunter, CAFM, senior account manager at LeasePlan USA.

Hunter noted that many of these items can be installed by the deliv-ering dealer or a local upfit vendor.

“Make sure any upfit items, such as traffic pylons, fire extinguishers,

etc., are secured by the installer prior to shipment,” she continued.

Fleet managers should also know who is financially responsible for the damage.

“Financial responsibility for the ve-hicle’s condition generally lies with the transit company while they have posses-sion. Fleet managers should always be certain that all relevant parties have ade-quate coverage should damage occur dur-ing transit. If fleet managers need assis-tance with damaged vehicles, they should

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The No. 1 cause of weather-related damage is hail, which can cause hundreds of dings and dents in a ve-hicle in a short time period.

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When it comes to dealing with vehicle transit nightmares, Phil Sch-reiber, fleet manager North America, OTIS Service Center, had a few

of his favorites to share:

One small Problem, One Big Headache “My Ford Transit Connect van came to the U.S. from Turkey with a broken wind-shield. The vehicle was put aside when it was off loaded from the boat at the Baltimore port. It was in limbo for almost six months because of the $300 pay-ment for the glass replacement. Of course, the van was assigned as a replace-ment van, but no one could tell us why it was not at the dealer when we ex-pected it. It took about three weeks of an investigation and vehicle searching to find this vehicle,” Schreiber shared.

experiencing a sense of Déjà Vu “I had my own bailment pool for one particular van, which was in the Cleve-land area. I assigned one of the vans from the pool as an emergency replace-ment to a van in my Seattle branch. About four weeks later, the van was deliv-ered to the dealer in Seattle; however, the truck driver dropped my van from the truck and the van was totaled. About three weeks later, the truck was at the dealership delivering the second, replacement van — and the exact thing happened. At this point, I went to the OEM and told them that I will not move another van from Cleveland to Seattle, and they will have to find van for me lo-cally. We finally got a new van in Seattle after two totaled vans and a com-bined 12 weeks of nightmares,” Schreiber said.

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wait until the repairs have been complet-ed. Dealers will then submit a claim to be reimbursed for the repairs. If a vehicle is declared a total loss, OEMs will request FMCs submit a replacement order and they will do their best to produce and ship the vehicle as soon as possible,” said Gomez of Donlen. “Unfortunately, if a customer cannot wait for another factory order and we are required to purchase a vehicle out of dealer inventory, the majority of the time, OEMs will not compensate for the price difference between purchasing out of stock vs. factory pricing, which causes issues for our customers.”

Upfit vehicles may cause additional headaches.

“If there are vehicles with upfitting that cannot be placed back into manufacturing traffic due to not fitting on a rail car, we will coordinate delivery with a transport ven-dor or upfitter. FMCs and customers must be very careful when coordinating moves via an upfitter as they may outsource these moves to outside transport companies or move vehicles themselves, but they may not have the necessary insurance to perform the move. Not knowing who is moving your vehicle and understanding their insurance requirements is a big risk and could ulti-mately place the liability on FMCs or cus-tomers,” Gomez continued. n

working with an FMC can help, saving time and paperwork.

“When a fleet manager utilizes an FMC to place orders, and, somewhere in the de-livery process the vehicle is damaged, the FMC will work on behalf of the customer based on the type of damage and where it happened. Ultimately, the FMC is working directly with the manufacturer or dealer-ship on behalf of the customer to remedy the situation,” said Candice Groth, fac-tory order and vehicle information cen-ter manager at GE Capital Fleet Services.

Regardless, time is not on a fleet manag-er’s side if damage occurs. From repairs to replacement, downtime will be incurred.

“Depending on the extent of damage, if the vehicle is not declared a total loss, the fleet manager will typically have to

consult their fleet insurance expert,” said John Hayes, VP, fleet insurance services at LeasePlan USA.

Dealers are also required to inspect the vehicles for damage and file a damage re-port prior to the vehicle being delivered to the driver, according to Freund of Wheels.

“Typically, it is minor damage, scrapes, or small dents that the manufactur-ers will repair. Each man-ufacturer has a threshold for the cost of damage re-pairs. If the cost exceeds that threshold, the man-

ufacturer will take the vehicle back. The customer can either re-order or purchase an out-of-stock unit if time is an issue,”

she said. OEMs have detailed,

and specific, procedure documents that must be followed by carriers and dealers in the event of in-transit damage.

“When a carrier or dealer does not follow

the procedures it can result in extensive repair delays and delivery of the vehicle,” Freund said.

While damage during vehicle transit is a less frequent problem than other situa-tions that cause vehicle damage, such as accidents, fleet managers should be pre-pared, and have a plan in place in case of damaged vehicles.

“Having an internal process in place and understanding the policies of your FMC’s vendor partners are the two keys to identifying options and recourse. Most OEMs and their in-network transporta-tion carriers request notice of damages to be reported within 24-48 hours of deliv-ery,” said Conte of ARI.

Depending on the severity of the dam-age, OEMs will either repair or categorize it as a total loss and a new order can be placed, or a possible financial arrangement can be made for out-of-stock purchases.

“Each situation is unique. Third-party transportation companies use condition reports at the time of pick-up and deliv-ery to document vehicle state to proac-tively limit the amount of damage claim situations,” Conte said.

Additionally, this is one area where

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Scratches in a vehicle’s exterior paint can be caused by road debris or sim-ple carelessness.

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