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The use of transport activities is an integral component in the successful completion of the business model. However, the use of vehicles for or on behalf of an organisation gives rise to a number of risks. Often the organisations third highest cost, behind premises and payroll, fleet if not optimally managed can have significant negative implications for the organisation ranging from financial loss to legal action.



The Australasian Fleet Management Association (AfMA) has undertaken the task of presenting this most important of business activities in a system format, a collection of interrelated tasks and activities taking place in a legislative, business and social context and environment.

The manuals’ task is to present a method/process by which an organisation will be able to identify activities requiring active management enabling effective and efficient fleet management outcomes.

Every industry is subject change and appreciation must be given to amendments in legislation and methods of working as they occur. Current best practice needs to be constantly monitored to ensure Key Performance Indicators (KPI’s) and the organisations continued legislative compliance remains relevant and appropriate.

While every attempt has been made to include as many aspects of the management of the fleet it should be appreciated that as there are myriad of different way to achieve a desired outcome. It is the intent of the manual to touch on as many aspects as possible that we believe requires management attention and control.

No business activity takes place in isolation. Organisations must operate in an environment (usually a set of rules and regulations to which the organisation must comply) which may impose restrictions, define methods of operation or characterise outcomes to be achieved i.e. provision of a safe workplace.

Such statutes as Occupational Health and Safety (OH&S) legislation and its implicit ‘Duty of Care’ requirement, Chain of Responsibility and Fatigue Management legislation define systems to be adopted or outcomes that organisations must achieve. The organisation is required through its control and management systems to ensure a safe workplace for its employees and that its activities do not adversely impact on others not in the organisations employment.

Such regulatory systems have a single purpose which is to force the organisation to develop and deploy a management control system to ensure the attainment of a ‘planned outcome’.

A management system should be sufficiently developed that it can recognise/identify and pre-empt a systems failure. Should a failure occur the organisation ought to be able to identify the causes of such failures and undertake ‘corrective action’ ensuring there is no repeat of like incidents.

This manual is about the identification and management of a set of approaches, activities and actions concerning the organisations transport related tasks (the fleet) in the context of reducing a number of risks to the organisation.

In the context of fleet operations and this guide there are four types of risk outcomes that are required to be addressed.

  • The first is operational risk, a negative outcome in the day to day transport activities of the organisation.
  • Second is the risk of criminal prosecution. Failure to have an adequate system based on a risk analysis of operational activities. Followed by a risk evaluation, reduction and/or elimination consisting of policies, procedures, management supplied information and oversight.
  • Thirdly there is the risk of civil (private) prosecution of the organisation where its systems, policies and procedures failed to manage its operations resulting in a negative outcome.
  • The fourth risk is the maintenance of the organisations reputation in the marketplace. Reputation harm is one of the most damaging occurrences an organisation can suffer.

As with any management activity there are many views and opinions as to how best to manage it effectively and efficiently; it is one of many different approaches. The manual is not meant to be an all encompassing, it simply sets out a model that identifies issues required to be addressed and ways in which this might be achieved.




AfMA is not engaged in rendering legal, contractual, taxation, accounting or management consultancy advice or services and cannot, nor intend to, make any recommendation and expressly disclaim all liability for the results of action taken, or not taken, on the basis of information provided, nor for any errors or omissions.

Organisations need to ensure they have identified their operational risks and have adequate controls for their risk exposure. This exposure will vary over time and from organisation to organisation and is linked directly to the organisation’s industry profile, methods of working, policies, procedures and practices.

One characteristic of risk assessment is that it is dynamic and will be subject to constant change over time. This means that the controls required for effectively managing the risks need to respond appropriately as knowledge and/or practices change or as the risk profile changes.

Organisations should obtain advice from professionals in the accounting, legal and taxation fields to ensure any conclusions drawn are suitable and appropriate for your own particular structure, circumstance, contractual obligations and unique methods of working.





Active Management of the fleet can take place on different levels from one of a basic allocation of vehicles to staff to all the through to the full financial and operational responsibility.

Each requires a lesser or greater level of understanding of process, level of knowledge of key management concepts such as financial management, systems analysis, change management contract management principles etc.

There is increasing pressure being placed on companies to ensure that its workplace activities are adequately addressed and managed. Boards and management are required to implement an appropriate system for risk identification and reduction.

Organisation have to ensure that the processes, procedures and systems used are sound and adequate to manage the potential risks associated with the company’s transport activities so that personnel, contractors and the general public alike are not put at risk.

All personnel, including contractors, need to be managed by a documented system that encompasses a defined and managed program including the provision of information, skills assessment, training and emergency response through proven processes and procedures.

Simply to refer to the organisations fleet often does not provide an adequate indication of variations in needs and outcomes required by the organisations activities. Correctly classifying the organisations transport needs will often result in the identification of a series of different operational profiles each with its own sets of requirements and as a consequence their own set of controls, policies and procedures.

The basic operational classifications that make up the organisations transport needs are:

  • Tool of trade (vehicles the organisation uses in its core business activities),
  • Company supplied vehicles (usually passenger vehicles as part of an employment package),
  • Short/long term hire vehicles (outsourced vehicles whether with or without an operator),
  • Employee owned vehicles (used to perform activities on behalf of the organisation), and
  • Novated leased vehicles (employee owned vehicles acquired under a three way lease agreement with the employee, employer and vehicle supplier).

The common thread applicable to the above vehicle categories is that the law makes no distinction between them in relation to the organisations responsibilities. Responsibility rests solely with the organisations for the assessment of risk and the provision of a managed process via a set of policies and procedures remains the same.

Under current legislation the organisation will be held responsible for and can be held liable for any and all related (negative) outcomes from its transport activities being undertaken in a vehicle supplied by the organisation or any task being undertaken on behalf of the organisation.

Responsibility is extended from the individual driver to those tasked with determining the transport need, identifying and reducing or mitigating risk and actively managing the process. It puts responsibility on all those involved in the transport chain, whatever their capacity.

In broad terms, if the organisation and its management facilitates, either by direct action or inaction, any situation or circumstance that results in a negative outcome for either the employee or any other person that the employee’s actions affect, then the organisation and its managers can be held liable; see attachment one for details of a High Court Ruling outlining what it believes is the extent of the organisations obligations and responsibility.

This places a clear responsibility on the organisation to carry out assessments and periodic reviews, of the organisation’s safety/risk/harm awareness and minimisation system.

It must be acknowledge that organisational culture dictates how an organisation performs its activities. Organisational culture can be thought of at a basic level as ‘the way we do things around here’.

There are three key elements that shape and define an organisation’s culture, these are:

  • How the organisation represents itself (its beliefs, attitudes and values);
  • How an organisation functions (its structures, practices, controls, policies and procedures);
  • Whether or not these are positively managed by all levels within the organisation, from senior through middle and lower management, producing the outcome of success by design.

Only through supportive management can an organisation’s culture and operational philosophy be sufficiently developed to a level where it can still dominate even when activity is carried into the mobile workplace environment where it may be tested by external competing cultures.




The basic business model is simply a combination of process and outcome (the process is the provision of a product or service at a cost the market is prepared to pay). The outcome is satisfied customers, whether external or internal, and sufficient income for the organisation.

To every system there are two fundamental elements. The first is the internal system, over which the organisation can exercise control, basically the way they do things. Secondly there is the context or envelope, often referred to as the environment, in which the organisation must operate. What sets the environment apart from other is that it is usually made up of legal obligations, OH&S federal/state/local laws, rules and regulations, which the organisation has to address.

Environmental activity influences what we do, but over which we generally have no direct control, can be either beneficial or a drawback. Good managers have an eye for any such changes in the environment that allows them to modify the way they do things to deliver an advantage.

The major responsibility placed on the organisation is that under OH&S where the organisation is required to provide information and training, and actively manage its business processes to ensure their business activities do not adversely impact their employees and others not in its employment. While legislation in this area can differ from state to state in its detail the fundamental responsibilities requirements are constant across all jurisdictions.

It is this requirement that effectively determines the management processes, in the form of a series of policies and procedures that becomes the framework by which activities are undertaken. The purpose of this is the attaining of the planned (effective) outcome and the absence of unintended (negative) consequence. Once effectiveness is achieved then attention can be focussed on efficiency, achieving the planned outcome in the most proficient time and cost efficient manner.

As knowledge and/or practices change then so can an organisations risk profile. Risk profiles usually include two components, “Exposures” and “Controls”. There are many types of exposures, some inherent and some produced. Controls are the protection that you create through competent systems, policies and procedures within the organisation.

Currently legislation dictates that the organisation undertakes a risk assessment analysis of its operations to identify risks or hazards and introduce adequate controls to eliminate, reduce or manage identified risks. In their review the organisation is required to take into account.

  • Exposure to harm – the likelihood of a hazard or risk occurring;
  • Seriousness – the degree of harm that would result if the hazard or risk occurred;
  • Knowledge of the risk – what the person concerned knows (or ought reasonably to know*) about the hazard or risk;
  • Any ways of eliminating or reducing that hazard or risk and remedies;
  • Availability and suitability of ways to eliminate or reduce the hazard or risk.

*An important principle here is the understanding that should an incident occur and legal action be taken against the organisation then it is likely that the person with the management responsibility will be judged not on what they know but what they ought reasonably to know for someone holding that position within the organisation.

Adequate measures require the organisation to have a multi-level system approach which needs to demonstrate the presence of:

  • Risk assessment and evaluation leading to risk mitigation (this process must be documented);
  • Control measures (procedures);
  • Maintenance/compliance (management control system);
  • Emergency plans where appropriate (contingency plan if the control fails).

The organisation needs to certify that the measures it has chosen are defined and recorded in documented policies and procedures which are implemented, monitored and actively managed.

Should the organisation be required to demonstrate the adequacy of its program it must be able to demonstrate that it has taken all ‘Reasonably Practical’ measures to provide a planned outcome via a defined set of actively managed actions? This requirement can pose some difficulty as just what constitutes ‘Reasonably Practical’ is not defined in legislation.

It is the organisations responsibility to determine just what is reasonably practical when measured against the task being undertaken, its own operational circumstance, and methods of working while meeting all relevant industry specific, local, state and/or federal legislation.

Within any functioning management control system there needs to be a clear understanding as to the responsibility of each person. Responsibility must be clearly assigned to ensure that all know what they have ownership of and what they must manage.

Senior management will define and communicate the organisation’s fleet policy and objectives and employ a risk reduction program to ensure that a system is in place to identify and mitigate risk. It is essential that senior management maintains a high level of commitment and supports its application.




The AfMA ‘Manual of Fleet Management’ outlines one of a range of possible models and methods by which an organisation can use to accommodate its own particular circumstance and mode of operation. It has been structured to be of assistance to both the novice and the seasoned manager. This necessitates a level of duplication across several model policies and procedures.




There are several ways to use the manual. The model is presented in a number of interrelated forms. There is a series of questions (the activity/procedure matrix) that the organisation needs to address in an effort to ensure it has addressed all the issues identified by the model. These questions are cross linked to particular set of model policies and/or procedures, each with its own individual flow diagram, which can be adapted by the organisation to provide an active management process.

Several activity based subjects, such as the management of driving licences, can be accessed via a series of interactive flow diagrams that are linked to those policies/procedures relevant to that particular subject.

In addition we have included background information on several relevant management disciplines and principles. This information is of a preliminary nature and not intended to be a comprehensive study of the subject.

It is up to each individual to determine what level of knowledge they require for their particular position within an organisation on subjects such as strategic planning, understanding financial information, as well as working within OH&S and other relevant legislation.

AfMA hopes that this manual is of assistance.