Fleet Management Weekly Staff
As supply chain disruptions are expected to continue into 2022, fleets continue to implement strategies for retaining assets to accommodate for a lack of new vehicle inventory.
Merchants Fleet, in its Guide on How to Adapt to Vehicle Shortages, has some excellent tips for any fleet manager facing the vehicle shortage dilemma, starting with maintaining an order calendar with milestones – such as incentive negotiations, upfitter discussions, total cost of ownership analysis, and vehicle selections — and then back track these required steps to take
For orders that are currently delayed, fleets must apply out-of-the-box thinking to the problem. After many months of shortages, dealership stock remains low and available vehicles that are available on dealer lots are being sold for extremely high prices.
Managing the Order Process
Here are some of the ideas Merchants’ shares:
- Roll your order to the next model year or keep existing orders in the queue and wait. While both options do not mitigate delays, it does ensure factory order vehicles with the exact spec.
- Explore alternative vehicle models and OEMs. When evaluating vehicle selections, in addition to total cost of ownership assessment of capital and operating expenses, perform a feature comparison. .
- Consider postponing upfits that can wait until a later date upfits in order to receive vehicles more quickly.
- Use short-term rentals to fill gaps. The fleet management partner may have pools of available inventory to rent.
- Stay on the lookout for dealers that may have inventory of certain vehicles.
For Those Extending Vehicle Lifecycle
For fleets that have kept vehicles on the road past the planned vehicle lifecycle due to supply chain disruptions, balancing an extended life cycle with preservation of residual value is possible through proven steps like leveraging high-mileage synthetic oil or implementing a severe-duty maintenance schedule.
The good news is that vehicle values are staying strong, so fleets will likely still see returns when they do have the ability to sell. However, longer lifecycles usher in unscheduled repair frequency and increased operating costs. Be sure to plan for a maintenance spend adjustment.
Track maintenance spend month-over-month in order to understand forecast fluctuations and revisit budgeting to account for increased repair costs.
Again, Merchants offers some ideas for dealing with extended lifecycles:
- Start with solid driver policies that address care for higher mileage vehicles.
- Implement pre-trip inspections.
- Frequently check any idle vehicles.
- If using a quick lube location, take vehicles into a full-service location for a comprehensive inspection so you can address any repairs or safety issues.
- Create a more frequent distribution schedule for preventative maintenance reports and alerts to ensure vehicles that are overdue or approaching their service internal are identified and properly maintained.
- Consider implementing a structured PM compliance program or scorecard process where drivers have accountability to ensure vehicles are properly maintained. Implement gamification for drivers, branches, or regions to encourage maintenance compliance and identify drivers or locations that need coaching.
In summary, flexibility and action can take your fleet a long way in dealing with vehicle shortages. Act decisively and with urgency. Taking the iinitiative can often be the difference between securing a vehicle and not.