Business Vehicle Company Provided Fleet

1. CASE STUDY
at a Glance YRC Worldwide slashes business vehicle costs 20% and brings
new benefits to employees
Solution: Runzheimer International Business Vehicle Services
Challenges
• Achieve double-digit reduction
Situation
in business vehicle costs Driving an 18-wheeler through a heavy storm is no easy feat. Steering a
• Maintain employee Fortune 500 shipping firm through today’s turbulent economy is even
satisfaction during transition harder...by several orders of magnitude.
to reimbursement-based
business vehicle program Taking a tight grip on costs, YRC Worldwide is weathering today’s
stormy marketplace and has maintained its lead as the largest less-than-
Results truckload (LTL) transportation services provider with the biggest and most
comprehensive network in North America.
• On track to save several
million dollars, with a
projected 20% reduction The YRC Worldwide salesforce plays a central role in its success, but keeping
in business vehicle costs this nationwide team mobile had become increasingly costly. The business
• Employees express satisfaction vehicles program was an especially big challenge—as the economy darkened,
with the new program shipping volumes declined, and the company found its financial flexibility
hampered by multi-year leases for company-provided vehicles.
• Personal income taxes reduced
for participating employees
As part of a top-to-bottom initiative to shed costs, YRC Worldwide took a
hard look at its business vehicle strategy. “Company cars have been a tradition
in our industry and a part of our SG&A expenses,” says David DeMaria,
YRC Worldwide Senior Manager of Corporate Compensation. “But our
savings goals were aggressive, so we decided to look beyond tradition and
consider all options. Nothing was off the table.”
Setting the bar high, the company searched for a business vehicle solution that could deliver double-digit savings while
accommodating the needs of its vital salespeople. “We wanted improvements for the company and for employees,” says
DeMaria. “We were looking for reduced vehicle expenditures, less risk and lower administrative costs for the company,
plus tax savings and more individual vehicle choice for employees.”
Solution
The YRC Worldwide management team reached out to their networks for suggestions. “We heard about Runzheimer
and their tax-free approach, so we contacted them,” says DeMaria. “They provided regionally-based reimbursement
data, so we could run models based on our particular situation. It was immediately clear that we could save a lot of
money and bring some new benefits to employees.”
Based on YRC Worldwide business objectives, Runzheimer International designed and is implementing a phased
rollout of a fixed and variable reimbursement (FAVR) program to replace YRC Worldwide company-provided
vehicles as those leases terminate. With the FAVR program, participating YRC Worldwide employees now
drive their own vehicles and receive nontaxable reimbursements for their fixed and variable vehicle costs. These
reimbursements accurately reflect vehicle-related costs in each employee’s region, which can vary significantly across
North America.

2. client Success
CASE STUDY
Results
“...we’re slicing millions “We’re on track to achieve the anticipated 20% savings through reduced vehicle
of dollars off our expenses, lower administrative costs, plus less liability and FICA exposure,”
says DeMaria.
SG&A, and we’re
YRC Worldwide has also realized further benefits.
bringing a number of
positive new things “We’ve started to see changes among employees who are now driving their own
vehicles,”says DeMaria. “For example, some are finding more efficient routes to
to employees, as well.” reach their customers and prospects. That helps them reduce wear-and-tear on
their own vehicles, but it also trims our fuel reimbursement costs. It’s a win-win.”
~ David DeMaria Runzheimer International’s solution for YRC Worldwide includes several
Senior Manager of Corporate advantages for employees:
Compensation • Participating employees save on taxes—personal vehicle use is no longer
added to their reported income
• Using the solution’s web-based tools, employees have a quick and easy
way to submit expense reporting
• The direct deposit feature helps ensure timely reimbursement payments
to employees
• Choice has increased—employees can select vehicles that fit their
individual business and personal requirements
While financial modeling made it easy for YRC Worldwide management to see the projected savings, a spreadsheet couldn’t
predict how employees would accept the new program. “There was trepidation among some employees,”says DeMaria. “But
others familiar with this type of program volunteered to be first in the group to give up their company cars, and new hires go
right into the program. We’ve had to carefully manage the roll-out and communications. But by being open to feedback from
employees throughout, we were able to make modifications, raise acceptance and manage employee expectations.”
Customer service is another positive aspect of the relationship with Runzheimer International, according to DeMaria.
“Runzheimer has always been very flexible, and they’re diligent about following up to make sure our needs have been met,” he
says. “From the beginning, we got extensive help with internal communications. Runzheimer led webinars and conference calls
with our employees to explain the program and directly answer employees’ questions. And we still get great service. We can
always reach a person with answers in a short amount of time.”
Today, DeMaria sees fewer storms on the horizon. “We’ve trimmed costs throughout our company, and Runzheimer made it
easier than expected in the area of business vehicles. With their help, we’re slicing millions of dollars off our SG&A, and we’re
bringing a number of positive new things to employees as well.”
About Runzheimer International 800.558.1702 | www.runzheimer.com
Founded in 1933, Runzheimer International serves 60% of the For more information, contact us at 800-558-1702
Fortune 500 and numerous government agencies. Recognized
or email marketing@runzheimer.com.
for providing innovative solutions relating to Total Employee
Mobility®, Runzheimer International is the global leader
in workforce mobility programs including business vehicle,
logistics, business travel, corporate aircraft, employee relocation
and compensation, and virtual office. Copyright © 2010
Runzheimer International Ltd.