Contract: The legal implications of entering into the agreement. Honorarium. Maintenance management fees are usually charged for one fee per vehicle per month and are always negotiable (as with all prices and fees). Know what the market will carry for a fleet of your size. However, sometimes a contract suggests charging the fee as part of the rental price factor. This regulation is not advantageous because the fees then vary with the cost of the vehicle and increase as the prices of the vehicles increase. If this is the method your provider wants to use for fees, you should plan for a fee per vehicle per month. Most suppliers maintain a network of stores through which services are provided and charge a fee or surcharge when the customer leaves the network for maintenance or repair work. These fees are also negotiable. A lump sum is preferable to a supplement.
As with all elements of a framework agreement, you need to negotiate with clear and up-to-date knowledge of where your fleet is in the market and the cost levels you should be able to access. In the broadest sense, there are two main areas covered in a fleet management contract: leasing (or buying/selling) and services. The first is a financial transaction, the second an operational transaction. Both involve processes and cost factors that are generally not negotiable, and also some that are. Within these two broad categories, three topics are covered by the contract: although this is not always the case, a framework agreement usually covers various management and fleet administration services of the seller. These include maintenance management, accident and recourse management, registration renewal, MVNOs, fuel and safety programs, among others. While many points of fleet service contracts are negotiable, this article only discusses important issues and how they may or may not be negotiable. Maintenance management programs provide the fleet with a means by which drivers can receive preventive maintenance on a schedule, purchase smaller services, have major repairs carried out, and seek expert assistance to authorize the work. Here are a few things that should be negotiated: A main fleet lease is a legally binding contract. However, unless previously agreed, the renter is not obliged to rent vehicles. The contract simply describes the responsibilities of the parties if one or more vehicles are leased underneath. Of course, there are plenty of legal boilerplates in every rental agreement.
Some are negotiable; Some are not: negotiating fleet management contracts is above all a matter of common sense. Just remember that all fees and costs are negotiable, the contract must describe each party`s responsibilities, and performance targets must be included. This is not negotiable. Fleet leases require the lessee to keep the vehicle in service for a minimum number of months, usually 12 or 24. This requirement is not subject to negotiation since it determines the tax and accounting treatment of the lease. Fleet leases are billed in advance, which means that the lease is billed on the first of the month for the following month. Of course, vehicles are not always put into service as comfortably, and most fleet contracts «trigger» settlements around the 15th of the month. This Transportation Management Agreement («Agreement») will be entered into on May 16, 2008 («Effective Date») by and between Archway Marketing Services, Inc., a Delaware corporation headquartered at 19850 South Diamond Lake Road, Rogers, MN, 55374 («Archway»), and Echo Global Logistics, Inc., a Delaware corporation headquartered at 600 West Chicago. Suite 750, Chicago, IL 60610 («Echo»). One area that is often overlooked in contracts is performance.
The standard fleet management agreement generally does not include performance requirements. You should make sure that yours does. The insertion of performance benchmarks not only ensures the success of the programs, but they also benefit the provider. On the leasing side, performance indices are best suited for the resale of non-lease units, while several positions lend themselves to service performance targets. Benchmarks can be established for a number of areas, including: price, performance, law. These three issues are part of any fleet management agreement, and suppliers and their customers will benefit from being addressed, clearly defined and understood. WHEREAS PRESTIGE BRANDS wishes to use NLI`s services for prestige brands` activities, a comprehensive transportation management function, including but not limited to freight routing (entry, replenishment and exit), payment and verification of waybills, claims management, obtaining proof of delivery, reporting and automation, as well as other administrative traffic tasks and compliance with tariffs by all parties concerned; and accident management includes accident reporting (first claim report), repair management and recourse recovery. The reports are quite simple and there is not much important to negotiate. Just make sure you know how many reports are provided. Many of the same problems come into play in an accident management program as they do in maintenance management. .