Damage to vehicles during transit is an unavoidable problem for fleet managers. The most common causes are weather events like hail storms and carelessness during transportation. While fleet managers have little control over transit damage, they can partner with reputable transport vendors and consider vehicle specifications to potentially reduce damage risks. When damage does occur, financial responsibility typically lies with the transit company, and fleet managers should know claim processes.

1. fleet financials I MARCH / APRIL 20152
At aGlance
Damage happens to vehicles while in transit,
be it weather related or transportation related.
To help mitigate the potential expense and
downtime, fleet managers can:
• Ensure they have a plan in place for when
damage happens.
• Understand who is responsible for vehicle
damage, whether it be the dealer or OEM,
and know who to call.
• Adjust vehicle spec’ing and upfitting to
reduce potential costs of damaged vehicles.
F
leet 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 Happens
While 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
in
SCHREIBER
OTIS Service
Center
GOMEZ
Donlen
CONTE
ARI
Damaged
Roof damage can occur when a trans-
port truck doesn’t make it under an over-
pass due to height clearance.
PHOTO:DONLEN

2. MARCH / APRIL 2015 I fleet financials 3
“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 Unavoidable
Transportation-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
Transport
FREUND
Wheels Inc.
KELLY
LeasePlan USA
HUNTER
LeasePlan USA
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.
PHOTO:ARI

3. 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.
Nightmares in Transit
vehicle transit
fleet financials I MARCH / APRIL 20154
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
GROTH
GE Capital Fleet
Services
HAYES
LeasePlan USA
Scratches in a vehicle’s exterior paint
can be caused by road debris or sim-
ple carelessness.
PHOTO:DONLEN