It probably goes without saying, but this year has been a rollercoaster ride for many organizations. Whether it was getting your fleet back on the road as pandemic restrictions lifted, navigating continued vehicle supply constraints, or trying to manage rising operating costs, this year truly tested us all. Fortunately, it’s just about time to close the book on 2021.
As we get ready to ring in 2022, there’s certainly reason for optimism – a fresh start, exciting new opportunities – and now’s the perfect time to wrap-up the last few items on 2021’s to-do list and get a jump on next year’s strategic initiatives. With that in mind, let’s highlight a few key trends throughout each stage of the vehicle’s lifecycle that you need to consider as you close out the year and look to set your fleet up for success in 2022 and beyond.
Sell – There’s Still Time!
Without question, ongoing vehicle supply constraints have caused a number of headaches for fleet operators (more on that later) but it has also created some tremendous opportunities, namely, a white-hot market for used vehicles.
Perhaps there’s been shifts in your business as a result of the pandemic and now you find yourself with some extra vehicles you no longer need. Maybe you have a few units sitting idle in the corner of your facility gathering dust for a number of years – and don’t forget about your old commercial equipment!
Now’s the perfect time to capitalize on the extremely strong secondary market and quickly generate additional capital that can be reinvested in your business or help you balance the books before the end of the year.
Service – Plan Accordingly & Remain Agile
Your fleet’s maintenance program is always important but given the current disruptions in the automotive industry, a comprehensive strategy that controls costs and minimizes downtime is even more critical.
The cost of raw materials – crude oil, rubber, etc. – is up virtually across the board. Add to that the number of repair facilities still struggling with parts and/or labor shortages, the general lack of new vehicle inventory, and vehicles remaining in service longer than originally anticipated and you can quickly see the perfect storm this creates.
Unfortunately, recent estimates indicate you can expect to see a five to ten percent increase in operating costs in 2022 – and potentially beyond. If you anticipate your vehicles are going to stay in service longer or utilization will climb as business demand continues to increase, you’ll need to adjust your maintenance strategy – and your budget forecast – to account for this additional use during the most costly portion of the vehicle’s lifecycle.
This is one area in particular where it will be extremely beneficial to partner with a fleet management provider. A strong fleet management company can help you thoroughly analyze the impact of these shifts in utilization and rising operating costs, what those changes likely mean for the future of your fleet, and provide a comprehensive strategy to help you control costs and minimize downtime.
Drive – Gas Price is Back in the Spotlight
Fuel prices slowly but steadily increased throughout 2021 while miles driven also normalized for many fleets, returning to pre-pandemic levels. As a result, overall fuel spend has increased for the vast majority of organizations and with fuel prices recently reaching levels not seen since 2014, this is a trend many will be monitoring closely in the weeks and months ahead.
Take this opportunity to reassess your fuel program. A well-communicated policy, a telematics program that monitors driver performance and fuel economy, and a fuel card with customizable controls are just a few of the key pillars of a comprehensive strategy that will help you better monitor and manage your fuel spend.
Additionally, now may be the perfect time to explore the viability of electric vehicles, hybrids, or other alternative fuel options to align your fleet with your organization’s overall sustainability strategy.
These vehicles continue to generate significant interest across the industry and as more OEMs begin to produce electric/hybrid versions of popular truck and van models, it’s safe to say it’s no longer a question of if EVs will play a role in fleet operations but more so, what’s the speed at which it happens. The good news is that a simple selector change, or perhaps a small initial pilot program, may be all it takes to begin integrating EVs into your fleet mix.
Buy – Be Proactive but Prepare to Wait
The lingering effects of the pandemic continue to severely disrupt the entire supply chain. That being said, it is more critical than ever before that you be proactive in your acquisition planning and budget allocation because in all likelihood, it is going to take much longer to source vehicles, and they’ll cost significantly more across nearly every segment.
You’ll want to examine your overall fleet and cycling strategy from a holistic standpoint. Ask yourself; how will my fleet operations be impacted throughout the entire lifecycle by limited vehicle availability and extended order-to-delivery times?
Also keep in mind, flexibility and quick-decision making will be incredibly important as you work to navigate these supply chain challenges.
If possible, streamline your specifications to create simplicity and maximize versatility, allowing you to mitigate supply chain risks and shuffle vehicles across your fleet to the areas or roles where they’re needed most. You’ll also want to be well prepared to make acquisition decisions as quickly as possible. Discuss your strategy and budget allocation with the necessary stakeholders well in advance so you can capitalize on acquisition opportunities immediately as they arise.
And the unfortunate reality is that you should expect the unexpected. Order cancellations and delays will be unavoidable so make sure you have a thorough contingency plan in place to minimize the impact on your business.
Remember…You Don’t Have to Do It Alone
As ongoing disruptions and lingering uncertainty continue to create unique challenges for most fleet operators, remember, we’re here to help. Together we’ll determine the true impact of the challenges to your business and implement holistic fleet initiatives that allow you to manage your vehicles as strategic investments that keep your business moving forward.