Since the onset of the COVID-19 pandemic, service and delivery fleets of all sizes have seen an unprecedented surge in demand in order to keep shelves stocked, along with retail, grocery, and restaurant deliveries to peoples’ homes. Service fleets, too, continue to provide much-needed tasks, such as HVAC and plumbing repairs, to keep essential businesses up and running and people safe in their homes. Perhaps, most importantly, fleets are still delivering much needed medical supplies of all types to hospitals as they continue to treat COVID-19 patients.
It's not much of a stretch to say that fleets providing deliveries of any kind – especially essential goods and services have become the country’s lifeline.
Meeting Today’s Challenges — Flexibly
While there’s no question that fleets have done a heroic job as the quartermasters in what looks to be a long campaign against COVID-19, fleets are still experiencing challenges that need to be overcome — and this is where fleet management companies (FMCs) can lend a hand.
Challenge: Not Having Enough Vehicles to Meet Demand
Many service and delivery fleets are struggling to meet demand due to a lack of an adequate number of rolling assets. Not being able to meet demand can impact the viability and longevity of the business in the short and long term as other players in the market who can meet surge capacity move in to take market share. But even more fundamentally, businesses with fleets are also part of the communities in which they work — and as good corporate citizens they have committed to serving their friends, neighbors, and customers. In a time of crisis this commitment becomes even more paramount.
Solution: There are a number of ways an FMC could help you scale up to meet the surge in demand depending on your needs. For example, if you expect that you’ll only need some extra vehicles in the short term, you can arrange for a short-term rental. Another option is a short-term lease with an option to turn it into a long-term lease. This avoids the hassle of having to extend a rental period and adds the advantage of both a fixed payment and the ability to easily adapt to emerging conditions—all while keeping your drivers on the road without interruption.
Challenge: Long OTD Times
Even before for the COVID-19 pandemic, order-to-delivery (OTD) times could be long and inconvenient. But now, with the urgent need for vehicles, fleets need a way to fill the gaps while they’re waiting for new assets to meet their customer obligations and keep the business running. With the halt in production by the major OEMs, factory-ordered vehicles may be significantly delayed.
Solution: Consult with your FMC to see if there are pool vehicles available in the area that could meet the demand while you wait for your new vehicles to be delivered. Another option could include used or near-new vehicles that can be obtained on a short- or long-term lease. And particularly for essential fleets, your FMC may be able to help you obtain the last-mile delivery vehicles you need.
Challenge: Cash Flow Problems
It’s evident that COVID-19 has put a strain on businesses, and while delivery and service fleets may have seen a surge for their services, your business may need some up-front cash to meet demands of scaling up the fleet or until accounts payable can catch up.
Solution: You can remarket your old or under-utilized vehicles for much needed cash. Consult with your FMC to arrange a safe, contactless evaluation and pickup of your unneeded vehicles. The FMC will be able to handle the entire remarketing process, and you’ll have cash in hand to either immediately reinvest in new assets or meet operational expenses.
Challenge: Juggling Several Leasing Providers
Many fleets have more than one leasing provider for a number of reasons, including: vehicles were obtained at different times, or there was a merger of two companies with different leasing providers.
Solution: It may be possible — with your FMC’s help — to consolidate all of your fleet leases to one provider, and even convert your owned vehicles to a lease. This will simplify administration, make payments uniform, and even free up some capital for investments into other operational areas of the company.
With no end in sight of the COVID-19 pandemic, fleets providing essential, last-mile deliveries of goods and services are in need of ongoing support from FMCs, OEMs, and suppliers in any way possible to keep the supply chain connected as the country weathers the storm.
Light at the End of the Tunnel
As for the future, that’s harder to predict in these uncertain times, but it is possible that as a result of this crisis — as with the Great Recession a decade ago — fleets will develop new efficiencies and see evolutionary changes in the market.
For example, with even greater number of consumers relying on and getting used to home deliveries, the trend to last-mile delivery services will undoubtedly increase, dictating new vehicle lifecycles, preventive maintenance plans, and workforce management models.
At a time like this, it’s useful to look back at how similar, past catastrophes have affected human lives and the economic landscape. The worldwide 1918 flu pandemic also resulted in shelter-in-place orders and a significant slowdown in business — but once the flu passed, business came roaring back to life, in some cases, stronger than ever.
Without an underlying economic cause, economists see a similar outcome possible in the post-COVID-19 pandemic world.
There will be changes, but all indicators point to them making us stronger and more united than before.
Going Forward Together
And like other fleet management companies, OEMs, and suppliers, Merchants Fleet is committed to supporting all of its fleet customers, particularly those fleets providing essential services.
To that end, Merchants has created eight programs designed specifically to meet the challenges above and more to support service and delivery fleets as they work to meet the demands being placed on their businesses and their vehicles. To learn more go here.
We are here to support you — and the essential work you are doing for us all.