By Ed Pierce, Contributing Editor
Fleet Management Weekly caught up with Bob White, President, Holman Fleet & Mobility, who took time to answer our questions regarding the opportunities and issues impacting the fleet industry in the coming year as well as how Holman and ARI are positioned to serve its fleet customers in the post-pandemic business environment.
1. What are some of the key trends/challenges/opportunities in the fleet sector for 2021 and beyond?
As we begin to emerge from the pandemic, there are several challenges – and opportunities – that we continue to monitor closely.
With interest rates still hovering near historic lows and many businesses looking to maintain financial flexibility and to diversify their liquidity options, we’re seeing a growing number of organizations embrace leasing as a key component of their vehicle acquisition strategy. Leasing provides an attractive alternative to the significant upfront capital investment often associated with complex vocational vehicles. Further fueling this trend are extremely favorable market conditions which provide fleet operators the opportunity to lower their lease rates as well as explore creative funding solutions such as a purchase/leaseback scenario for companies looking to monetize their fleet and access additional capital to help support other areas of their business.
Additionally, emerging technology remains top-of-mind for most fleet stakeholders. Telematics, analytics, and data visualization continue to serve as catalysts for change, helping companies make data-driven decisions that deliver tangible business improvements. But as this technology continues to evolve and become more accessible, fleet operators have made it clear they need more than just hollow information; they want insight and expertise to help them leverage the data to effectively control costs and improve operational efficiency.
This is where our people make the real difference and is an area where we’re collaborating closely with our customers; helping them better understand the “why” behind their fleet challenges in order to develop a better “how” to overcome those obstacles and propel their business forward.
Also, electric and hybrid vehicles continue to generate a significant amount of interest across the industry as a growing number of organizations are exploring EVs and hybrids as part of their organization’s sustainability strategy. Generally speaking, most vocational fleet operators are waiting for the major OEMs to begin producing EV versions of popular truck and van models to help ease the transition in the years ahead, but you continue to see significant investment in this space. I think it is safe to say it’s no longer a question of if EVs will eventually play a significant role in fleet operations but more so what’s the speed at which it happens.
Conversely, many in the industry are still working to overcome the overwhelming impact the pandemic had on virtually every aspect of business.
As entire industries worked to navigate unforeseen disruptions, some organizations had fleet vehicles sit idle for extended periods as business demand waned while others experienced a dramatic upswing in business demand that exponentially increased utilization. As you can imagine, each scenario presents unique challenges. We continue to work closely with our customers to help them adjust accordingly to mitigate the impact on their business as they navigate the road to recovery. But perhaps no segment of the industry has been more severely disrupted than the vehicle supply chain.
Brought to a virtual standstill for months amidst factory closures, parts and material shortages, and delivery challenges, constraints throughout the supply chain have set off a domino effect that fleet operators must now overcome. Even now, the number of fleet vehicles available remains rather limited as manufacturers focus on reestablishing an adequate supply of retail vehicles for their dealerships across the country while also working through production delays associated with the model year changeover and component scarcities such as the ongoing microchip shortage.
These supply constraints combined with the number of fleet operators who opted to delay their traditional order cycle during the height of the pandemic (or in some cases, skip entirely) is creating the perfect storm of unprecedented demand. This has been a particular area of focus for Holman and our customers as we work to stay ahead of these disruptions in the supply chain and, when necessary, explore contingency plans to help minimize any impact to our customers’ business.
2. What are your customers telling you/asking for, and how are you helping customers navigate their challenges?
Over the last several years, there’s been a rather significant shift in how fleets are managed. While the fundamentals of fleet management haven’t changed much (minimize costs, maximize uptime, etc.), there’s certainly an increased awareness of how fleet influences overall business operations. Fleet is no longer viewed simply as a cost center or line item on a list of business expenses and often there are additional stakeholders involved in the fleet conversations and decision-making processes. As a result, customers are expecting more from their fleet provider than ever before; and rightfully so.
Perhaps more than ever before, our customers are looking to us to be a true strategic partner to help them navigate the disruptions and uncertainty of today’s business environment. They expect a partner who understands their organization from top to bottom and provides proactive recommendations that not only make their fleet better but make their business better.
3. Discuss the unique scope of automotive competencies Holman brings to the fleet sector and what this value proposition means for fleet operators.
During the last several years, our organization has been steadily evolving to further align our unique collection of core competencies to maximize the natural synergies of our various businesses for the benefit our B2B and B2C customers. It’s this understanding of the automotive sector and visibility to the industry as a whole that allows us to remain agile and to help our customers prepare for the challenges and opportunities on the horizon.
Specific to the fleet industry, Holman plays a multi-faceted role, but perhaps most important is our ability to apply our extensive automotive expertise, innovative technologies, and customer interactions to provide our clients with holistic fleet strategies. From a fleet operator’s perspective, it isn’t about who is providing a particular service – ARI, Auto Truck Group, Kargo Master, Holman Parts Distribution, and so on, but how are we as an organization able to listen to their challenges, understand their particular needs, and provide seamless fleet, mobility, manufacturing, and distribution solutions that position their company for future success.
4. How is Holman leveraging its diverse expertise to deliver holistic solutions to fleet challenges?
When you look at the landscape of our industry, each of our Holman companies fills a specific need for fleet operators; fleet and mobility, manufacturing and distribution, insurance services, etc. But as we continue to align and maximize the natural synergies of our various businesses, we’re in a position to deliver a truly unique value proposition to our customers.
This continuity allows us to deliver a seamless customer experience starting with ordering and upfitting, all the way through replacement and remarketing, while managing vehicle lifecycle costs along the way. One example of this collaboration is how we’re able to help customers navigate supply chain challenges during this current period of uncertainty.
Our diversity and profound understanding of the entire automotive sector helps to ensure we always have visibility to the latest trends and emerging disruptions, allowing us to pivot quickly and address potential issues for our customers to minimize the impact on their business. If fleets have to delay orders due to supply constraints or get vehicles on the road sooner than anticipated to meet the demands of their business, ARI, Auto Truck Group, and our customers work collaboratively to minimize supply chain delays and, when necessary, develop alternative plans.
Additionally, we’re able to leverage Holman’s core competencies to support our customers with creative solutions. For example, if one customer is experiencing a downturn in their business due to the current economic uncertainty and wants to delay vehicle orders, but another customer needs additional units quickly due to increased demand, we can potentially align these fleets in a win-win scenario for all involved.
5. How does Holman envision the fleet sector growing/evolving in the year to come? What does the future of mobility look like?
Without question the last year-plus has certainly been challenging for virtually all organizations around the globe. Fortunately, commerce has stabilized and businesses have managed to adapt. Notably, as organizations adjust their business strategy to align with current economic conditions and position themselves for the future, many companies are now more inclined to outsource the management of their fleet, and this will be a key contributor to market growth for the foreseeable future.
That being said, many organizations are now beginning to view fleet differently. Fleets, particularly in North America, remain truck-centric with an emphasis on moving both people and equipment. Often, the vehicle itself is an essential tool for the job. But as the mobility space rapidly evolves, many organizations are trying to determine if their drivers truly need a fleet vehicle or simply a ride. We’re working closely with our customers to help them answer this question, and this has been a particular area of focus for our team at Holman Strategic Ventures.
The goal of Holman Strategic Ventures is to make sure we continue to innovate our core businesses. As the automotive landscape continues to shift, as the demands of our customers change, this team is tasked with looking at the transportation and mobility space to ensure that we’re evolving to serve the customers we have today as well as those who emerge in the future.
6. Let’s talk about work trucks and the continued strength of the final mile delivery market.
Prior to the onset of the pandemic, consumer buying habits were already trending considerably towards online shopping rather than traditional retail, but the pandemic certainly accelerated this transition. Today, the demand for packaged goods and last-mile delivery is off-the-charts, and the way these organizations conduct business is rapidly changing.
Amidst this unprecedented surge in volume, there’s significant need for innovation, particularly given the well-documented disruptions throughout the vehicle supply chain. The leaders in this segment of commerce are exploring a variety of vehicle and management strategies with the ultimate goal of operating as efficiently as possible at the lowest total cost of ownership. Our knowledge and expertise of the entire automotive landscape enables Holman to play a significant role in the supply chain for these organizations, allowing us to provide a holistic solution that best positions our customers for the road ahead.
7. Discuss ARI/Holman’s strategy for aligning various aspects of the value chain – i.e., strategic partnerships, seamless integration of Auto Truck/Kargo Master, the role Holman Insurance can play in helping to minimize risk, etc.
Knowing that the needs of our customers will continue to grow and change, we’re focused on our purpose of being a true business partner today while also looking ahead at the future of transportation and mobility to make sure we’re evolving to meet the needs of tomorrow as well. In addition to strengthening and evolving our organization, this also means ensuring we align with key strategic partners across the industry to further diversify our core competencies.
In addition to forging key strategic partnerships across the industry, we’re also looking at how we can expand our service offerings. For example, risk mitigation is top-of-mind for many organizations, and we quickly realized that Holman Insurance can play a significant role in helping our customers better control this top hidden cost driver. Now, we’re able to leverage the expertise of the Holman Insurance team to look at a fleet’s total cost of risk, identify potential gaps, and find opportunities to not only reduce costs but also mitigate a significant portion of their corporate risk.
For more than nine decades, Holman has embraced innovative technology and services on behalf of our customers, and we’ll certainly continue to explore new opportunities to further strengthen our collection of automotive competencies.