Carlson Wagonlit Travel last month announced a new "ground transportation optimization service" to help managed travel accounts with their car rental, rail and limo expenses. Leading the practice is Dave Kilduff, who joined CWT in April after he ran a car rental procurement practice for American Express for a couple years, preceded by a 21-year career with The Hertz Corporation. As managing director of ground transportation within CWT Solutions Group, Kilduff's job is to help clients with a spend category that does not merit as much of their attention as air and lodging, CWT said. "Travel buyers need to focus more on this area of their program spend, though any one of them would tell you they simply don't have the time," according to Kilduff. His recent discussion with Management.travelfollows.
How are you approaching ground transportation consulting?
A lot of times we're seeing that it's an overlooked category, but that's not necessarily so. There are companies that manage it. A lot of people think they manage this category, but it's not what most are doing every day. What we're saying is, we're going to manage it with more of an expertise by bringing in analytical tools and industry experts to it.
On balance, the biggest piece of ground transportation in the United States is car rental. There's a lot going on with products, services and benefits for frequent renters, but from a management perspective, why does there seem to be so little going on?
Car rental companies are going for the add-ons, like Wi-Fi and global positioning systems. There's a lot of financial pressure, and for the first time you have Avis/Budget and Hertz on Wall Street. They're going to have to answer to analysts, who want to see profitability, which will push prices up because they need to cover fuel. Major corporations have a lot of fixed-fuel rates, so they are literally losing money when fuel goes up. You will also see a lot more concentration on green fleets.
Can you give some examples of things people haven't been, but should be doing to manage this area?
Benchmarking. Individual clients would have to call 1,000 people, but we already know the details. We also look at contract language. Some companies just sign the standard language--you should go through that.
What's the typical ground portion of a T&E budget?
It's probably 8 percent to 10 percent, and that will vary by country.
Do travel management companies traditionally have preferred-supplier relationships in these categories?
This is a different side of the business. Our work is client-driven. We're going for the client's best deal--there is no outside influence.