Managing the Financial Side of Commercial Fleets

Meet the 2016 Fleet Executive of the Year

November 2016, by Chris Wolski - Also by this author

Photo courtesy of Jake Dean
Photo courtesy of Jake Dean

Michael Ahart, vice president of transportation for Dean Foods, was honored as the Fleet Executive of the Year for 2016 during the Automotive Fleet & Leasing Association (AFLA)’s annual conference in September. The award is exclusively sponsored by The CEI Group.

Since taking on fleet responsibilities at Dean Foods in 2006, Ahart has centralized fleet operations, making the fleet more efficient for the company.

Ahart came to fleet from finance, and Dean Foods’ fleet is the first fleet operation he has been responsible for, and, while he wasn’t an expert in fleet, at first, he demonstrated one of the classic qualities of leadership when faced with the unfamiliar — he asked questions.

Asking Questions

Ahart’s involvement with Dean Foods’ fleet began in 2004, because of the acquisition of several smaller companies, which resulted in the creation of a larger company with a decentralized fleet organization.

“As we started pulling all these regional companies together, we started forming a very large fleet that had been operated in a very decentralized manner,” said Ahart. “And, as I started looking at the amount of money that we were spending in the area of registrations and our process for vehicle and title management, I quickly learned that I needed to become more educated on how large fleets operate.”

At a Glance

Michael Ahart, vice president of transportation for Dean Foods, was named the 2016 Fleet Executive of the Year. His accomplishments include:

  • Centralizing fleet operations.
  • Cutting idling.
  • Introducing compressed natural gas vehicles to the Dean Foods’ fleet.
  • Implementing in-vehicle safety monitoring and coaching.

Ahart started by looking at the problem from a familiar point of reference, and seeking help from industry experts.

“I had a strong tax background. So my initial reaction was to immediately reach out to get an education from both a legalization and a taxation aspect. So I engaged the team at Scopelitis, Garvin, Light, Hanson & Feary [a law firm specializing in trucking issues—Ed.], and worked extensively with Andy Light on gaining a thorough understanding of how vehicle legalization works.”

While working through these issues, Ahart began asking more questions, such as how much it cost to register all of the vehicles from the various regional fleets that had been acquired through the various mergers that created Dean Foods.

This led Ahart toward a deeper understanding of the fleet’s operations, slowly transforming him from a “finance guy” into a quintessential “truck guy.”

“As I started learning more about fleet legalization, I started then digging more into the Department of Transportation regulations and the management of our driver legalization,” he said. “We had, at the time, a very complex legal structure. We had 18 DOT numbers under one parent company. ”

Ahart made the transition to full-time fleet leadership in 2006 during a period of reorganization and consolidation.

Ripe for Consolidation

Ahart consolidated the decentralized fleets into a single centralized structure through a series of steps beginning with the consolidation of the company’s various registration plans into a single International Registration Plan (IRP).

The next step in the consolidation process involved paring down the thousands of vehicle specifications into a handful that would work for the entire organization.

“I didn’t do that single-handedly. I brought in a number of team members from our different organizations. We sat in a room for two full days, brought in our OEM representatives, and we just hammered out specs,” he said. “It was a major undertaking for us to do.”

As part of this process, Ahart and his team set up a captive transportation company.

Consolidation and centralization didn’t only affect vehicles and drivers. Ahart also centralized maintenance.

“We have 45 maintenance shops that today have the same tools, they follow the same preventive maintenance inspection procedures, and we have an annual team building and management training workshop. We participate in the Technology & Maintenance Council, and we’ve had technicians participating in the SuperTech Competition the last two years,” he said. “We partner with our OEMS on leveraging all the training that they have to offer and we are very big on warranty recovery.”

Today, Dean Foods’ fleet consists of about 6,000 refrigerated trailers. About 4,800 of its vehicles are Class 7 and 8 trucks and about 1,200 passenger vehicles.

Ahart oversees a team of 40 fleet managers, four regional fleet managers, two fleet directors, and 10 fleet support roles from its corporate headquarters in Dallas. The company also has 280 diesel technicians.

The fleet operates in the 48 contiguous states and Hawaii, traveling approximately 170 million miles per year.

Coming Full Circle

While not fated to work at Dean Foods, Ahart’s early life foreshadowed his involvement in the dairy industry as an adult.

He grew up on an Iowa dairy farm, later moving with his family to rural Missouri, where he finished high school.

A three-year hitch in the U.S. Army followed, and then it was to the University of Texas at Arlington where he earned his bachelor’s degree and later received a master’s degree in professional accounting.

After receiving his certified public accountant (CPA)’s license he went to work for Deloitte & Touche, then briefly worked for the Halliburton Corporation, joining Dean Foods in 2000 where he served in a number of finance positions, including vice president of finance for the dairy division before segueing into fleet.

Ahead of the Curve

Bringing a new perspective to Dean Foods’ fleet operations has allowed Ahart and his team to implement steps that have impacted the bottom line and improve efficiency.

When looking at the fleet’s vehicle replacement cycles, particularly why engines were failing after a certain amount of time, Ahart started looking at why the company’s vehicles were being allowed to idle. And as he has throughout his fleet career, he started asking questions and learned that there was no need to idle the vehicles.

Wanting to monitor idling, Ahart instituted his first initiative, installing on-board computers in the company’s fleet operation in Franklin, Mass.

“With the addition of those onboard computers, we were able to do some fleet rationalization, cut fuel consumption, and we reduced idle time. It proved that there was a lot of benefits to it, but our challenge was still the return on investment. Because in 2006 and 2007 we were still dealing with very low fuel prices, and onboard technology was still very expensive,” he explained.

Ahart looked at the solution holistically, realizing that cutting idling had other benefits.

“It wasn’t until 2009 when fuel prices started spiking at over $3 a gallon that we went all out with the onboard computer,” he said.

By tackling the problem of idling when fuel prices were low, Dean Foods subsequently was able to reap the benefits during the fuel spikes of 2009, taking what was learned in 2006 and implementing it with the rest of the fleet.

“We went forward with the on-board computer system in 2009, because the return on investment became so immediately apparent,” Ahart said.

There were numerous benefits that Dean Foods realized in addition to cutting idling and reducing fuel use.

“We realized the benefits related to electronic hours of service records, being able to tell where our vehicles were, and looking at our delivery performance to our customers,” Ahart said.

Being Sustainable

Ahart has implemented a number of alt-fuel initiatives. These programs reflect Dean Foods’ sustainability plan, which includes reducing the company’s carbon footprint.

The fleet, naturally, is an important part of this program, considering that Dean Foods’ fleet of Class 8 vehicles average about 75,000 miles per year per vehicle and each of its Class 7 vehicles average about 33,000 miles per year.

“For us, we needed to reduce the amount of diesel fuel that we were running through our vehicles every year to help to reduce our carbon footprint. So as part of our sustainability, the on-board computer was helping us with idle reduction, we were working to drive less miles through routing efficiencies, and we also were looking at the opportunity to figure out how natural gas might play into our fleet of vehicles as we looked at alternative fuel,” Ahart said. “It took us awhile to get this done, because we needed to have grants to help us pay for the incremental cost of the vehicles. I’m kind of a fast follower in things that I don’t really have a lot of expertise in. I let other people who have the experts behind them to jump in and pave the way.”

Compressed natural gas (CNG) penciled out as the best alt-fuel alternative for the fleet, and after a couple years of looking for grant money to implement these vehicles into the fleet without success, Ahart was able to partner with the fleet’s Freightliner dealer in Dallas who was able to help secure grant funding for the fleet.

“We were awarded the funds necessary to start putting some natural gas vehicles in our fleet,” he said. “We eventually grew our Houston, Texas, fleet into running 64 natural gas vehicles. We also contracted with Clean Energy to build a natural gas station.”

The station went live in July 2016, at the same time diesel fuel was experiencing some of its lowest prices in years.

“It is going to be difficult for us to say that we’re meeting our financial goals associated with our natural gas strategy,” he said. “It doesn’t necessarily stop us from increasing the natural gas fleet size in Houston because the more fuel we put through the station, the better the return. However, we must continue to receive grants in order to help offset the incremental cost of the vehicles.”

Ahart is committed to CNG as the fleet’s alternative fuel of choice, and, while acknowledging that the costs aren’t as favorable today, does recognize that, as with many of his initiatives, long-term, holistic thinking is the order of the day.

“Current market conditions are probably not favorable for a quick change, but at some point in time the volatility of diesel prices could completely turn the world upside down all over again,” he said.

Being Safe

As with the rest of the fleet, when Ahart took the leadership reins, safety programs were being run in a very decentralized way, but, with consolidation, he quickly realized that safety was another aspect of fleet operations that, by necessity, had to be centralized and strengthened.

“As we started looking at the consolidation of our DOT numbers, we were able to recognize the fact that, as we become a larger carrier, we became more attuned to the fact that the DOT would be looking at us,” he said. “We needed to make sure that we had programs in place that would not only protect the public, we wanted to make sure that our drivers were safe. ”

In addition to adding the onboard computer system, which helped monitor driving behavior, Ahart worked with the Smith System driving team to roll out a program to help the company’s drivers understand how to drive more safely and the benefits of safe driving.

“We organized and launched observation and coaching processes within our organization to help us. We continued to look at how we improve our business and our safety records, last year we rolled out DriveCam throughout our entire organization,” Ahart said.

All of the company’s Class 7 and Class 8 vehicles are now equipped with DriveCam devices.

The fleet also has a cell-phone-use-while-driving ban.

“As we work to continue enhancing driver safety, we now equip all Class 7 and 8 acquisitions with advanced roll stability, collision mitigation and adaptive cruise control systems,” he said.

Being Involved

Ahart has been involved in the industry in a number of ways. Dean Foods has been a member of the American Trucking Associations (ATA) since 2010.

Ahart was recently elected to the ATA’s executive board.

Ahart and Dean Foods is also involved with the Technology & Maintenance Council, the National Private Truck Council (NPTC), and works closely with his OEMs.

All for One, One for All

When Ahart accepted the award as Fleet Executive of the Year, he credited his team as the secret of his success.

“As I said at the award ceremony and as people have called me to provide recognition of the award, I appreciate the recognition, but it’s about the team, it’s about all the work our team has accomplished that even makes us worthy of recognition. You can come up with all these ideas, but you must put the right team and processes together, and empower them and encourage them to make change, then you can accomplish great things,” he said. “So in the end it’s about my team, and the people that I work with. It’s the employees at Dean Foods, the leadership team that I’ve put together, the OEMs and the legal specialists that I’ve relied on to become mentors. It goes back to the way that I was brought up. Never just say, ‘That’s too complicated,’ or, ‘You don’t know anything about that, so just move on.’ I’ve always been told you’ve got to try.”

Taking the Next Steps

Ahart embodies this “I can” attitude as he looks ahead to his and the fleet’s next steps.

“For Dean Foods the next step is looking for the transformational step. The question is how do we transform? How do we make a transformational step so that we become that fleet that not only delivers the highest level of financial performance, but also gives our customers exactly what they need when they need it?” he said. “I love what I do, I love working with the people that I work with, and I continue to see opportunity after opportunity from where I am. And we, as a company, recognize that those opportunities exist. And, as long as we continue to work towards conquering these opportunities, then I’m going to be doing this every day.”

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