What is often said of the IT industry—the only thing constant is change—can also be said of fleet management. From industry challenges to government regulations, driver recruitment and retention, to advances in technology and safety, the fleet management industry is always on the move and constantly evolving.
To stay ahead of the curve, being informed on what is happening and what to watch for down the road can help you grow your business, control your budget and keep your drivers engaged, loyal and productive.
With 2016 coming to a close and 2017 just around the corner, let’s build upon the trends covered in a previous post and take a look at additional industry trends that fleet managers and industry suppliers say to be on the lookout for, as a little knowledge can be a powerful weapon when it comes to staying competitive.
Vehicle Acquisition Challenges
The lack of a standard “model year,” coupled with OEM production schedules with a scattered model-year launch time frame, means early build-out and mid-year model changes, making the ordering of new vehicles a time-consuming challenge.
In fact, according to a fleet manager from an Automotive Fleet survey, if you’re a fleet manager who works with more than one OEM, mid-year model changes require you to redo all templates and vehicle configurations twice or more every year.
Unlike the past, where new model-year specs were ready by July or August with build-out occurring from March through May, build-out now occurs in January, with the new model year starting in April or May and production starting in June.
With the shortened order cycle meaning the loss of half a year’s worth of orders, not only is planning difficult, meeting agreed upon model-year volume requirements is as well.
Interdepartmental Friction
Procurement is more and more driving change in fleet management, with the corporate procurement department influential in vendor selection, contract negotiations, service-level agreements and supplier management.
The same increase in influence can be applied to risk management, with fleet managers under enormous pressure from the human resources, legal and risk management departments to minimize preventable accidents.
Additionally, there is a third department gaining influence over fleet— Environment, Health & Safety (EHS)—as drivers are the largest source of workers’ compensation claims.
The result of this increased influence is a fleet decision-making process that has gone from a fleet department focus to that of a corporate committee consisting of representatives from various departments, including fleet, HR, legal, sales and operations.
The transition from fleet managers being more in control of decision-making to decision-making by committee results in inevitable interdepartmental conflicts, with approvals required from every affected department—meaning long-winded discussions that prevent a timely resolution of issues and prevent fleet managers from concentrating on what they do best.
Fuel Management
As a major budget item, better fuel efficiency is always on the radar. To that end, new fuel management trends are emerging, including fleet right sizing and holding drivers accountable.
Right sizing means determining the correct number of vehicles for the best utilization rate and also finding the most fuel-efficient vehicles for the job. It can be accomplished through two methods:
- Investing in newer and more fuel-efficient vehicles that do not sacrifice performance.
- Evaluating business requirements around vehicle size and job classification levels. For example, downsizing from a mid-size SUV to a compact SUV.
Drivers can also be the force behind change for fuel use, with an emerging trend of adding MPG and price per gallon to drivers’ KPIs. If a driver’s habits bring about better MPG, they are rewarded. If not, they are coached on better driving behaviors.
Telematics
Telematics technology is being leveraged by fleets in record numbers and at lower costs. For fleet managers, keeping up with technology is a challenge, as each year more technology is added to vehicles in order to provide even greater insight for improving efficiencies.
No doubt, telematics is widespread. In a survey by Bobit Business Media of more than 1,000 commercial and government fleets of various sizes, 92% said telematics had a positive effect on their fleet operations—citing improved productivity, decreased fuel consumption and improved routing as the top three benefits.
Reimbursement
With attracting millennials a challenge, many fleets are looking at options to attract younger drivers. Offering reimbursement over a company vehicle is one such option that is and will continue to be a hot topic.
Younger drivers think of reimbursement as extra cash in their pocket rather than money for the upkeep of their personal vehicle for work purposes. With the driver shortage currently close to 40,000, hiring managers and fleet managers are willing to bend and conform to attract this most important demographic.
What’s in store for your fleet in 2017? Change is good. Embrace it.
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