As Chevin Fleet Solutions in the U.S. celebrates a decade of successful business, Ron Katz, senior VP of North American Sales, takes a look back over the 10 most notable fleet management trends of the past 10 years. From boom to bust, the past 10 years have brought a number of trends and changes that have stretched and challenged even the most seasoned fleet managers.
Perhaps one of the defining narratives of the past 10 years in fleet is the move from a traditional ownership approach to an outsourced model. From outsourcing the entire fleet management function to adopting lessor agreements in the place of vehicle purchase and utilizing third-party providers for maintenance and accident management, the market has been flooded with choices in recent years.
Yet, with this pick and mix of options comes additional risks: losing access rights to crucial data, maintenance history getting lost in translation, and communication errors through disjointed functions and processes.
2-‘U’ is for Utilization
In the glory days of yesteryear (circa 2003), there was, arguably, less pressure on fleet managers to analyze vehicle usage in fine detail to ensure complete optimization of trip and/or load allocation.
Fast forward a few years and the signs of the economic slowdown started to appear, prompting organizations of all shapes and sizes to reassess traditional methods of assigning vehicles and equipment, while reducing both unnecessary costs and harmful CO2 emissions.
In fact, at Chevin’s 2012 user group conference, several senior fleet administrators admitted to having vehicles standing around unused for months on end — pushing up maintenance, storage, and finance costs.
3-Going for Green
The last decade has seen a major shift in how we relate to the environment and our role and responsibility in reducing unnecessary emissions and waste. Once unashamedly one of the world’s greatest contributors to global warming, the U.S. can now be proud of its position on climate change issues and sustainability initiatives.
Whether fleets embrace greener fleet practices, such as selecting more fuel-efficient or hybrid vehicles in an effort to meet ever-increasing environmental legislation or to add to the wider organization’s corporate social responsibility credentials, going green has become a prominent trend — one that is sure to continue for many decades to come.
The price per barrel of fuel has skyrocketed in the last decade, leaving many fleets struggling to maintain any type of control over their operating budget.
Reassessing the types of vehicles purchased or implementing driver awareness training to promote more fuel friendly driving behaviors are now required steps in an attempt to minimize fuel spend. Harnessing technology to encourage such fuel-saving strategies is crucial as the tide shows no sign of changing for the better.
5-Promoting Safety at Work
Driver safety has always been a priority for fleet operators, but, due to the increasingly litigious society that we all live and operate within today, employers must be ever vigilant of their legal responsibilities regarding employees’ welfare if they’re driving a vehicle for business purposes. This has facilitated a move toward process automation as a risk mitigation tactic, resulting in technology that can provide a safety net for thousands of fleets across the country.
This includes in-vehicle safety devices to technology that enables automated oversight of driving practices, maintenance schedules to ensure vehicles are roadworthy, and detailed intuitive exception reporting to warn of potential hazards or out-of-compliance situations, such as missed or overdue driver medical check-ups, certifications, or renewals.
6-Cutting the Cost
It isn’t just fuel that’s increased in price over the last 10 years. As the economic “Armageddon” of 2008 continues to impact companies the world over, revenues decline and customers demand more for less; weeding out the waste in every business function has been high on boardroom agendas in recent years.
Identifying waste in fleet operations requires close scrutiny of seemingly endless data relating to performance and expense and can be time consuming if approached manually. Yet, through the use of modern technology and information systems, under-utilized vehicles or excessive costs can be quickly identified and measures put in place to monitor and remedy these situations.
7-The Headache of Regulations & Taxation
Whether operating a fleet in the U.S., Canada, or any other country around the world, the ever-changing tax and regulatory rules are sure to keep many fleet managers up at night. Whether it’s the pending changes to lease accounting practices, the inevitable increase of fuel taxes (or some other method of generating income to pay for infrastructure maintenance), or the substantial increase of acquisition costs of new vehicles due to escalating CAFE standards, the responsibilities of the fleet manager to continually find offsetting cost reductions or deal with ever-increasing compliance and legislative mandates is only going to get more difficult.
8-Are You Connected?
With the proliferation of “connected vehicle” technology that didn’t even exist 10 years ago (whether GPS-based telematics devices, workforce management/dispatch and routing software, driver mentoring devices, video surveillance, or the ubiquitous smartphone), the explosion of technology is here to stay whether we like it or not.
Of course, some of this “empowering” technology brings with it new-found efficiencies and streamlined processes, yet the real-world risks associated with distracted driving and in-cab information overload have yet to be fully understood.
As I work in the technology sector, I’m no Luddite, but clearly there’s a limit as to how much information or how many tasks a driver can focus on while behind the wheel. The trend of in-vehicle connectivity is clearly going to be legislated at some point, and, of course, will add just one more responsibility to the already full plate of the fleet manager.
9-Strategic Approach to Acquiring Fleet Vehicles
With the ringing in of the new millennium, strategic sourcing had been all the rage in corporate boardrooms for more than 10 years and its ability to consolidate purchasing volume to leverage pricing from key suppliers was a proven success story. However, this strategy, when blindly applied to the fleet arena, in many cases resulted in less than optimal results, whether in higher costs or in intangible ways, resulting in significant service and quality issues.
Though the strategy of sole sourcing will never go completely out of style, many corporate and municipal fleets have adopted the tactic of competitive bidding and awards to multiple suppliers based upon a specific class or type of vehicle to ensure that the organization’s precise business and functional needs are maintained all the while achieving the best value for the money.
We’ve seen this approach dramatically impact our business as prospective fleets search for software that can adapt to meet the organization’s unique strategic and tactical needs; consolidating countless streams of data from multiple suppliers, while providing industry best practices for managing fleet information and oversight.
10-The Role of the Fleet Manager
One of the most significant changes over the past decade has been the importance of the role of fleet manager in an organization’s ability to accomplish its mission. In many organizations, with the exception of senior management, there are few roles that have as much influence over the day-to-day operations as the fleet manager:
Financial. Fleet is one of the larger capital costs and certainly a major operational expense in all municipal governments, as well as sales and service companies. Fleet managers directly influence a significant piece of this capital and operational expense pie. From accounting, to finance, to treasury, there are few financial areas that fleet managers don’t influence.
Operations. In a commercial organization, fleet directly supports warehousing, distribution, sales, and service. In a public-sector organization, fleet management directly supports the daily mission of providing municipal and public safety services to the taxpayer.
Recruitment. In a commercial organization, the company vehicle is a critical component of compensation to be sure, but of equal importance these days is maintaining a positive company image and providing a safe, reliable, and efficient means of accessing and interacting with customers.
The Decades to Come
With so many changes influencing the role of fleet managers over the last 10 years, accompanied by developments in technology and legislation to mandate safer operations; thoughts turn to what the future may bring for the fleet sector over the next 10 years.
Will the cost of fuel force the uptake of electric or autonomous vehicles where possible? Will the popularity of connected vehicle technology be legislated against on a national scale? And, will our economy see a return to the glory days of yesteryear?
About the Author
Ron Katz is senior VP of North American Sales for Chevin. He can be reached at [email protected]