North American Fleets Sound Off on Supply Chain Constraints

Automotive Fleet magazine views itself as a facilitator to provide a platform for different voices from the industry to sound-off on today’s challenges. This regular column is designed to encourage discourse for fleet professionals to let their voices be heard to their peers and other industry professionals. Here is what is top of mind for North American  fleet professionals on the issue of inventory constraints and vehicle availability.

The Good and Bad of Inventory Constraints

I just watched the 61st episode of the State of the Fleet Industry and I have enjoyed all of them. Thank you for sharing your thoughts on a weekly basis during the COVID-19 pandemic. As a seasoned fleet manager and working at a fleet management company for the past 25 years, I have experienced the highs and lows of commercial fleet inventories and the fluctuating wholesale prices of commercial vehicles.

The current inventory of new commercial vehicle is at an all-time low, but fortunately I have many great contacts for vehicles throughout the United States that have been very helpful and I will remember their professional attitude on commercial vehicle pricing in the future when inventories improve. A short-term attitude on “taking advantage of the situation” will not sustain future sales. I also understand that commercial dealer ownership dictates policy to employees and the commercial sales managers are put in a bad situation. Fortunately, there are some commercial sales managers that are honoring current fleet pricing and competitive price allowance (CPA) programs and I will continue to be a great customer to them.

The commercial dealers that are short sighted and start commercial vehicle pricing at $2,500 over MSRP will no longer have my business. I play the long game and look to a positive business future. We are all in this together and need to use experience and a common sense approach to get through this.

Rick Sauter, VP - Operations for Allstate Leasing

You are absolutely right, Rick. Fleet is (and always will be) a relationship business. I too have heard of some looking to take advantage of desperate situation that many find themselves. I am reminded of the saying: “Penny wise, pound foolish.” -- Editor

Vehicle Availability in Mexico

In Mexico we are facing even a grater issue, in a market that traditionally sources directly from the dealerships stock based on the OEM information. Due to the lack of current inventories and production shortage taking vehicles at fleet prices or allocating large orders has become really difficult.

Armando Flores, Customer Experience Director for  LeasePlan Mexico in Mexico City, Mexico

The Future of Fleet Belongs to those Who are Nimble

It’s important that we don’t look at the current fleet industry as a moment in time.  Rather, it’s important that we look much more broadly at the last 5, 10, 15 years in the industry and recognize that no two-years are the same, and the each new year / model-year brings with it new challenges and opportunities that we’ve not had the opportunity to work through. However, it should also highlight the importance of the skillset of these leaders to be nimble, to be engaging with the industry-wide supplier set, and to be able to assess both lagging and leading indicators and adjust accordingly – in order to meet the needs of the organizations that are trusting us to keep up operations.

Finally, suppliers in (and considering) the fleet industry should recognize the importance of portfolio diversification and work more diligently in expanding, or partnering on, new service opportunities that enable further diversification.  As the fleet/mobility industry morphs at a pace unlike we’ve seen yet, prosperity will depend on it.

Jonathan Kamanns, Associate Director, Fleet & Driver Safety/HR Total Rewards for Boehringer Ingelheim USA Corp.

I completely agree and this is the perfect role for the fleet manager. In the final analysis, it is the fleet manager who “connects the dots” from the macro corporate level to the departmental level, all the way down to the individual employee level, which determines how the fleet is leveraged as a business tool to achieve user group objectives. The fleet manager is the one who links strategic business objectives to the management of the fleet by embracing corporate and user department goals. -- Editor

Most Challenging Year Ever

Fleet management always has its challenges but the 2021 model-year has been the most challenging ever.  I’ve lost more sleep this year looking for and upfitting vans and trucks than ever before.  Having orders canceled, upfits delayed three months, delays in driveaways, registrations renewals, new plating, etc. I love the fleet business but this has not been fun.

Lisa Kneggs, Fleet Manager for FleetPride

On Point as Always

I watched the May 17, 2021, State of the Fleet Industry video report on the impact of vehicle availability on fleet managers and it was on point as always. It is most definitely a challenging time.

Terri Stiffler, Vice President Driveaway for ACERTUS

Vehicle Availability Insights

Vehicle availability has become a major issue and things are going to get worse before they get better. Anyone who has a fleet should watch the May 17, 2021, State of the Fleet Industry video entitled “vehicle Availability is the No. 1 Issue Facing Fleet Managers” to gain some insight.

Lars Nielsen, Business Development Manager for Mike Albert Fleet Solutions

All State of the Fleet Industry videos are archived on  www.automotive-fleet.com under the “Video” heading of menu bar at the top of the on home page and can be watched on demand. -- Editor

Fleet Managers Get Vocal

I watched episode 57 of the State of the Fleet Industry video report entitled “Vehicle Availability is No. 1 Issue Facing Fleet Managers.” Thanks the report. The State of the Fleet weekly video series is always insightful.

Paul Kasbar, Commercial Fleet Account Executive for Volvo Cars USA

Conundrum of Constricted Supply & Variable Demand

Nice job framing the fleet management conundrum when supply is constructed and demand is variable. (See Market Trends editorial in July 2021 AF entitled “Shortcycling Re-emerges to Leverage the Strong Used-Vehicle Market.”) The decision tree has several options as you artfully explore on the supply side. Every fleet managers must assess demand (business risk) - Do we need an upfitter? What business/revenue/service is lost when vehicle is not available? Should we ship vehicles around the country? Do we have to relicense/ register in another state? It was a great article!

Charlie Schott, Managing Director for Schott and Associates

When company drivers quit or are terminated, fleets have two choices – cash in on the hot resale market by selling the vehicle at auction at a premium or to put the vehicle in storage to guarantee the availability of a replacement unit when needed for a new employee. The large majority of fleets are playing it safe and storing units so they are readily available when new-hires are brought onboard and are willing to forego the allure of higher resale values at auction. On the other hand, some fleets are actively looking for opportunities to cash in on the strong used-vehicle market by shortcycling some vehicles by taking them out of service earlier than their scheduled replacement. This strategy can be especially beneficial for companies looking to right-size their fleets. -- Editor