This year, Donlen celebrates its 50th anniversary in the fleet leasing and management industry. For the first 46 years of the company’s existence, Donlen was a family-owned corporation. In 2011, Hertz Global Holdings purchased Donlen Corporation. As a Hertz subsidiary, Donlen now has a global reach through its various partners and Hertz’s global footprint.
Now headquartered in Northbrook, Ill., Donlen leases and manages more than 200,000 vehicles across the United States, Canada, and Mexico to more than 500 corporate clients.
Among the company’s accomplishments during the past 50 years were its advancements on technology and fleet sustainability. Donlen was one of the first fleet management companies to trail blaze the development of a Web-enabled fleet management system. In addition, Donlen pioneered many fleet sustainability programs through its early partnerships with the Environmental Defense Fund and the EPA SmartWay program.
To learn more about Donlen’s strategy for future growth, AF interviewed Donlen President Tom Callahan.
AF: Congratulations to Donlen on celebrating its 50th anniversary. What were the key milestones in the history of Donlen that helped transform the company into what it is today? Similarly, in the past 50 years, what were the key milestones that helped transform the fleet management industry into what it is today?
Callahan: Our history began on April 27, 1965, when our founders Donald “Don” Rappeport and Leonard “Len” Vine recognized the potential that existed in the commercial fleet industry, and a new fleet technology innovator was born. Donlen’s technology contributions to the fleet industry took off during the early 1980s. We were actually the first fleet company to pioneer computer-based fleet ordering, which reduced vehicle ordering by weeks.
We redefined fleet management again in the 1990s as Donlen was one of the first fleet companies to go paperless. In the late 1990s, we led the industry again by developing our Internet-based fleet management platform, FleetWeb, and changed the way our customers worked. With FleetWeb, it was easier and more efficient to place orders, create reports, and check order status online. As a result, we received Microsoft’s “Best e-Commerce Solution” for FleetWeb in 1998. FleetWeb was an SaaS solution before that term became popular.
In 2009, we launched the first fleet management mobile application for the iPhone, and, in 2011, we saw telematics as the future of fleet, and developed a fully integrated application known as DriverPoint Telematics. All these innovations have brought value to our customers and growth to Donlen.
As for key milestones that have helped transform the fleet industry, one major milestone is odometer capture at the time of fuel purchase. This enabled fleet managers to track vehicle usage much more regularly, allowing them to manage fleet policies with more control and precision. Technology is the enabler that has shaped the fleet management industry, as we know it today.
In the early 1990s, fleets regularly received boxes of paper reports from their fleet management companies. Many hours were spent manually reviewing these reports to find exceptions. Once reporting was available online, it made management of the fleet data much easier. As a result, electronic notifications could then be sent to customers when exceptions occurred, which significantly enhanced fleet policy compliance.
Now, the power of real-time telematics data can be utilized to create the next generation of reporting and analytical tools. This real-time information gives fleets quicker views into their operations and, as a result, they make better-informed decisions. Technology has transformed and will continue to transform the industry.
AF: As president of Donlen, what are your goals? What would you like your legacy to be, and how do you plan to reach this goal?
Callahan: I have a great deal of respect and admiration for the founders of our company. Their entrepreneurial spirit paved the way for new and innovative solutions not seen in the industry before. Gary Rappeport significantly built upon his father’s success and took this company to new heights, and I am now honored to be the third leader. My goal is to continue raising the technology bar higher than before, and for Donlen to give the most responsive service to all of our customers.
Our customers come first and they will always come first. That is our focus. Our employees are empowered to make decisions at all levels of the organization to satisfy our customers’ needs completely. Good attentive service really shines during the tough times.
Take a look at the oil industry for example. Right now they are experiencing financial challenges. Several of our customers are in this space and they are dealing with these challenges head on. They are under pressure to reduce costs and do everything possible to run a lean fleet during the tough times. This is when real partnerships are forged.
I’d like my legacy to be that Donlen forged real partnerships that allow our customers to focus on their core business without worrying about their fleet operations. We worked with one particular customer in the oil industry and met with their leadership team to develop a strategic cost savings plan. I’m happy to say the plan is being executed and they are getting through the tough times with a more efficient fleet. I want to be remembered for the partnerships that Donlen has enabled, and I want to be there for our customers in the good times and the challenging times.
AF: Four years ago, Donlen was acquired by Hertz. How has this benefited Donlen and its clients?
Callahan: People wondered how Donlen would change. The truth is that the DNA of who we are is still the same. We are a forward-thinking company, and so is Hertz. Together, we have created new products like Donlen Dealer Direct, a high-value remarketing channel that our customers are taking advantage of. When customers sell their vehicles, they have access to a large buyer base of fleet focused dealers. Customers see better returns, as well as shorter days to sell.
Today our customers also take advantage of short-term leases through our Hertz Value Lease program. Together, we created this program where a company can lease a pre-driven vehicle from the Hertz rental inventory, saving thousands of dollars in depreciation on each vehicle. Our customers tell us that they like the tools and technology that Donlen and Hertz collectively provide.
AF: What are Donlen’s strengths as a company and in which areas does it need to enhance its service and product offerings?
Callahan: Technology is one of our core strengths. To have the best technology requires top tier technology talent and our strategy is to recruit top IT individuals around Chicago. Last year, Crain’s ranked Chicago sixth in tech jobs among the nation’s top 20 tech markets.
We want the best creative minds on our team, so we’ve created a culture where employees want to work at Donlen. We’ve worked hard to earn the title as one of Chicago’s 101 Best and Brightest Companies to Work For. Having a culture where we focus on the employee allows us to attract and retain the best technology team members, and the best talent. Donlen is very fortunate to also have a very experienced, passionate and engaged employee base.
With hiring the best talent comes the challenge to get them up to speed quickly, and training has become a huge opportunity to enhance our service and product offerings. As our company grows, new employees must learn the ins and outs of the fleet industry. We continue to invest in our training programs and knowledge base. Each operational area at Donlen does a great job servicing our customers, but when we share best practices across all of Donlen, we improve the quality of our employees, which improves our customer service.
AF: With consolidation continuing in the fleet management industry, how do you see Donlen’s position in the marketplace?
Callahan: When companies consolidate and become too big, they may lose that personal connection — that personal touch — that their customers need and expect. It also becomes harder to move and act quickly to address the needs of a dynamic and changing market. Now, imagine if you are a customer with unique needs that no longer align with the direction of the bigger fleet company. You are not in a good position and that will be an opportunity for Donlen.
We have developed a solid reputation for delivering a customer-configured fleet experience. We focus on each customer’s unique needs. Customers continue to have a choice and through our state-of the-art technology, speed of execution, and customer-focused approach, I see us well positioned in the marketplace.
AF: Donlen has built a reputation of being a trailblazer with many technology innovations. In the coming years, what technologies do you foresee playing a greater role in fleet management?
Callahan: We have a saying at Donlen: “Everything is better with telematics.” Telematics allows data to be matched up against other data and that improves the quality of our other programs. Let’s use fuel for example. When comparing both sets of data, misuse of a fuel card and potential fraud can be easily uncovered. The telematics data provides a clearer view on vehicle downtime, driver safety, and predictive maintenance. Fleet management is better with telematics, and customers see a reduction in total operating costs by up to 11 percent.
Data management really is the key to the future of fleet management. The tsunami of robust data creation in this industry is setting the stage for predictive analytics. With predictive analytics, fleet managers are able to forecast downtime and its implications. Drivers will be reminded that they are due for maintenance as they drive close to a shop.
Fleet managers will know what to expect when they choose between scenario A, B, or C. The data and the technology will make driving safer. The technology will allow fleet managers to be more strategic and enhance their decision-making ability. Predictive and prescriptive analytics will play a bigger role in fleet management.
AF: What is Donlen’s strategy to expand its truck portfolio and enhance the services that it offers to this market segment?
Callahan: Expanding our portfolio starts with having the right people, processes, and products. When you look at a truck fleet, the different elements that make up a program can be complex. We hire truck experts to work in the different aspects of the truck supply chain. When you have highly experienced truck experts, you improve the quality of service that your truck customers receive. Our experts bring extensive experience, and we use their experience to guide our ordering, upfitting, and management process.
When it comes to truck technology, products like our JBUS truck telematics device allows tracking of truck location, speed, adherence to the speed limit, and idle time. Customers can successfully manage an efficient fleet if you know what your fleet is doing. Customers tell us that trailers and equipment can go missing for long periods of time. Our DriverPoint AssetCheck device solves that problem by accurately tracking the location of trailers and equipment.
We work directly with our customers utilizing a consultative approach to understand their truck needs. We look at what they need now, and what they’ll need in the future. This allows us to develop and enhance our truck services — examples would be our regulatory compliance and truck maintenance management products. In the end, the combination of the right people, process, and technology will allow us to expand our truck portfolio further.
AF: Could you explain Donlen’s relationship with the European headquartered lessor, Athlon, and your long-term goal for this partnership?
Callahan: At the Global Fleet Conference in Miami this year, we heard that specific regional expertise is very important to fleets. As the auto industry forges strategic partnerships, so too must the fleet management industry. That is what our partnership with Athlon accomplishes. We have a combined strategy to help our mutual customers stay current with fleet trends in their respective global regions.
When we looked to partner, one thing was very clear: We needed a partner that was just as innovative as Donlen. They needed to have a deep commitment to customer service, and a focus on technology innovation. Athlon is that partner and a highly regarded mobility solutions leader in Europe. The goal is to develop a comprehensive global fleet program for our customers involving strategic consultation, integrated reporting, ease of implementation, joint product development and best practice sharing. This allows our clients to thrive in the different regions. When you combine our partnership with Hertz’s global footprint, you give our customers local expertise in 144 countries.
AF: Looking forward, how do you foresee Donlen evolving from here? Similarly, how do you foresee the fleet management industry evolving in both the short-term and long-term?
Callahan: Donlen will continue to innovate that is in our DNA. While I can’t talk about all the things that we are currently working on, I can mention one. Prescriptive analytics is one area that will continue to be a focus at Donlen. We are taking real-time data from our products and services, and creating predictive models that forecast various outcomes based on a set of inputs.
We are finding that the more data you have, the more powerful your predictions and prescriptions become, and we have a lot of data! As a result, our customers will have a better way of knowing the future, and that can be turned into real value for them. For instance, knowing when a vehicle will fail, and when maintenance will be needed, will allow customers to avoid unexpected maintenance costs by cycling vehicles before the failure actually occurs. This means not only lifecycle cost savings, but also downtime savings for our customers.
In the short term, the industry will continue to save customers time and money. Fleet departments, generally speaking, must do more with less. This means right-sizing fleets, and showing company decision makers that cost savings can be both identified and realized.
We must continue to be true business partners, and help our customers achieve their corporate goals. Our fleet scorecards identify costs savings, and specific actions to realize those opportunities. This valuable information allows our customers to make necessary changes that help with their short-term and long-term goals.
In the long-term, more data will be created from the vehicles that will interact with the surrounding infrastructure — the so-called Internet of Things. We will have better information about traffic patterns and have better routing. All of this data will create new opportunities and ultimately lead to safer driving. We are preparing ourselves for this shift and are working with industry partners to understand how our fleet management platform can gain access to all of the new data. Ultimately, we will be able to synthesize this data, and provide information in a usable format to our customers.
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