Adding to any fleet 400 new prime movers, what’s more all with Euro 6-rated powertrains, is an event that will have significant repercussions.
Not only for those directly involved but also for the downstream effects such a large contingent of heavy vehicles will have when it comes to setting the bar for safety, acceptable standards of comfort and lowering noxious emissions at scale.
This the upshot of what Toll Group effectively achieved, at least through formal channels in mid-October when the official OEM partners awarded its Request for Proposal (RFP) were named.
It can be fairly characterised as something of a big deal for Volvo Group Australia, and especially Penske Australia, who are the first recipients of what is planned to be a biennial exercise conducted by the global logistics titan.
At Toll, this initial investment, reportedly of more than $200 million, closes out a two-year process of planning and strategy but opens up opportunities within the partnerships that are likely to be telling for those involved.
In 2022, Toll Group stood up a fleet strategy team whose core remit was to assess the current fleet composition holistically across all contracts within the global logistics divisions.
That included Resources & Industrials, Retail & Consumer and Government & Defence as well as Global Logistics Asia.
The team was headed up by Toll General Manager, Global Fleet Management, Shaun O’Flaherty.
Every contract that involved company fleet was put under a microscope. Initially, according to Shaun, the fleet strategy team built out the attributes of the fleet by factoring in the most important elements.
Type of prime mover and rigid. Age of the asset. The kilometres each asset had clocked. Market value estimate as well as some other symbiotic categories.
“One of the key objectives here was to drive the average age of our fleet down,” says Shaun.
“That would have to align with a reduction in R&M costs and increase vehicle uptime and reliability.”
The fleet strategy team included George Gioras, Head of Commercial Global Fleet Management Team; Craig Lester, Innovation and Technology Specialist within the Global Fleet Team; and Bronte Veitch.
Bronte was a graduate at the time, fully dedicated to the fleet strategy project. She has subsequently been retained and joins the Fleet Team as a Project Implementation Co-ordinator.
Together they compiled detailed data through repair and maintenance history and fuel efficiency numbers and packaged together what a multiyear demand for new fleet might look like.
An extensive process involving the company parent, Japan Post, ensued with the Toll Board helping to step them through the need to invest in the fleet to shore up contracts with customers but also to make the brand a compelling proposition in appealing to transport operators in the market by having the newest, safest and most reliable heavy vehicles.
Pleasingly, for Shaun, that was approved by Japan Post in November last year. The proposal covered prime movers, trailers and rigids.
As the light truck supplier, Isuzu Australia, is the third OEM in the RFP and will supply 20 rigid vehicles as a strategic partner.
Toll eventually tendered to the market via its enterprise services procurement team. The team also sought to pinpoint the age when productivity gains and efficiency gains drop off depending on the asset and demands of the application.
“There’s a significant cost to that when the vehicle is off the road and unable to generate revenue as it’s designed to do,” says Shaun.
“This procurement exercise that we’ve gone through also supports that in terms of the warranty down claims across the new OEMs and boosting uptime. We’ve put skin in the game. Skin in the game from their perspective whereby the manufacturer is backing in their product which is really pleasing to see. We certainly believe through this new partnership that we’ll better manage that moving forward.”
It moves the needle for Penske Australia by validating the newest trucks it offers in the market — the latest generation MAN and the X-Series from Western Star.
For Shane Miller, Penske Australia Fleet Sales Manager, who was instrumental in proving the brands with Toll, having more than 180 new units of the two brands combined and showcased in a major company livery like Toll’s, speaks volumes.
“When people see our product out on the road and being operated, it does help with acceptance and taking sales further forward,” he says.
“The most exciting thing for me is to see more of the MAN and Western Star trucks out on the road and following the success of the Toll RFP, it takes a good volume all around the country.”
It was after showing the Toll fleet team, headed up by Mitch Brooke, Toll’s National Fleet & Maintenance Manager, the new products and Penske’s Wacol operations, that the relationship commenced in earnest.
“That was an important day as it got people talking,” recalls Shane.
Shannon Mair, Penske Australia Head of Fleet, was a lead on the project. He says the rigorous selection process reinforces the investment Western Star and MAN have made in both of the new products that are represented in the tender.
“There are some broader commitments around uptime and the importance of having excellent brand-new product that is safe, innovative and fuel efficient with the latest emissions technology but also to back that up with a strong dealer network,” he tells Prime Mover.
“All of the vehicles that are purchased are on contract maintenance and supported through our network. That’s something that is going to be key to reinforcing the partnership long-term.”
There was certainly an appetite that predates Toll Group Managing Director Alan Beacham’s arrival six years ago, to explore a multiyear reinvestment program for the trucks given the oversight and commitments required of having such an extensive national fleet.
Replacing approximately 25 per cent of the fleet over two years with 400 Euro 6 trucks is a major accomplishment but one that comes with a limited time frame.
“We know technology is evolving and so putting together a multi-year program as we head towards making some material decisions around obviously propulsion system is important for us,” Beacham says.
“That’s the kind of conscious choice in doing the two years. Some of the conditions that we talked about that would allow us to get there are we’ve got to have a logical analysis of our current fleet, our operation and projection into the future.”
That future for Volvo Australia Group President and CEO, Martin Merrick is, by degrees, about partnerships.
Partnerships with customers and the benefits that are born from healthy competition in the market.
“We work in the industry together to lift the standards. That’s what we aim to do as part of this,” he says.
“For us, this partnership means more than just new trucks. Toll has set out a clear vision on zero net emissions by 2050. They’ve made that commitment. We share that commitment. We’ve got a clear decarbonisation strategy. We share that also. What we’re looking at today is a significant investment and it’s not just in new trucks within the fleet, it’s about the transformation to drive up a safer, cleaner and more productive transport industry overall.”
While the RFP process scored every element of an OEM’s tender offering, it’s fair to say the engine emissions categorisation of the vehicle was non-negotiable.
“Fuel efficiency and carbon abatement are major benefits from the Euro 6 engines and they’re all of that standard,” says Shaun.
“In terms of the safety features there is adaptive cruise control, lane departure warning, driver fatigue cameras. They will all come fitted with Toll’s telematics system. They are all automated manual transmissions and feature improved in-cab ergonomics to enhance the overall driver experience.”
Driver Paul Wiggins, who has been operating trucks out of the Spotswood Fuels depot for 20 years, is already in one of the new Western Stars.
Having driven many prime movers over the years including the previous Western Star iteration, he has experience hard to rival when it comes to contrasting vehicles in the application.
“The older model with the heavy clutch, especially in metro work, you’ve got that left knee going all the time in traffic,” he says.
“With these new autos it makes it so much easier and you’re not holding your leg forward, getting that knee pain coming through.”
The biggest change for him, as a fuel tanker driver who works 12-hour shifts, is the improvement to NVH.
“The noise, vibration and harshness has been reduced drastically,” he says.
“I didn’t mind driving that truck but compared to the Western Star X-Series it’s chalk and cheese as far as the smoothness of drive and the quality of experience driving on the road.”
Internally, Toll’s national workshop network have considerations every bit as vital to the yardstick by which expansive fleet upgrades like this are measured.
“As far as productivity and uptime in the fleet goes, Penske have been on the ball,” says Glenn Cruickshank, Toll’s East Coast Regional Workshop Manager.
“As the most recent OEM coming in, they have been really proactive. The support level from an aftersales point of view and I’m an ex-service manager, so I know that retail environment, it’s been impressive.”
In the background, before the first vehicles began arriving, Glenn’s team were compiling all of the service schedules and maintenance requirements and uploading these to the system to make direct comparisons with their own maintenance requirements.
“We were well aware of what parts inventory we might need to hold,” says Glenn.
“Penske are very quick in responding to glitches in relation to class 3 requirements or something that is boutique to this particular fleet.”
The architecture and nuances of the Detroit DD13 platform from a diagnostics perspective is not unfamiliar to the experienced workshop team in Spotswood according to Glenn.
“We’re already across it but Penske had the whole team out here and sat them here for three days with four trucks parked over there,” he says.
“Whether it was driver trainers, whether it was my mechanics coming over and spending time with them to talk parts on hand we’re really supportive of that. It’s been a seamless integration so far. I can’t fault it.”
An opportune moment presents itself without the fanfare that comes with battery-powered electric vehicles for companies beholden to net zero emissions targets.
The big push to decarbonise the industry as Shannon notes will come in many forms especially when the demographic, such as Australia’s 14-year old median fleet age, is being chipped away.
“Just by virtue of taking some of the older Euro 2 or Euro 3 vehicles off the road and by putting 400 new Euro 6 compatible prime movers into the Australian market makes a significant impact to the reduction of our emissions,” says Shannon.
“That’s a good key takeaway from the endeavour.”
Shaun, who is getting ready to announce a major order of Toll’s first battery electric prime movers from Volvo, says the RFP supports the company’s sustainability strategy.
“It will help us meet our overall target as we lead into 2030 and beyond,” he notes. “And those targets are in line with our parent Japan Post.”
That equates to a 46 per cent reduction in carbon emissions by 2031 and striving to achieve net zero by 2050 across all areas of the business.
This RFP is intended to have an afterlife within the broader fleet strategy now that the optimal age to refresh, dispose and replace fleet, based on the different applications that they operate within, is now established.
“We fully anticipate that this process will have a regular rhythm and be undertaken so that we don’t end up with unnecessarily aged fleet moving forward,” he says. “We don’t want this to be a one-off exercise. The intention is to get into a regular cycle.”