Keeping vehicles on the road longer than expected takes planning, and requires a good PM strategy.
Now, more than ever, fleet managers need to keep an eye on the bottom line, optimizing efficiencies, cutting costs, and dealing with the uncertainty brought about by global supply issues.
The elephant in the room, of course, is the global chip shortage, and how it affects new-vehicle availability.
“We’re telling all our customers to order as soon as the order banks are open,” says Jennifer Chapman, Account Executive at LeasePlan Canada and Foss National Leasing Canada.
“Normally, customers wait until they see the pricing, and then they get budget approval. Our recommendation is to order as soon as possible to secure as much allocation as you can get, because there are likely going to be shortages.”
And just because you place an order for 50 vehicles, Chapman explains, doesn’t mean you’re going to get all 50. “We know that allocations have been reduced,” she adds, “and we know allocations will be going, first of all, to the dealers to replace their inventory.”
But before supply is restored, and fleets can start placing orders, fleet managers will need to figure out the best way to stretch the use of their current assets. Rather than cycling out older vehicles, as may have been the plan before the pandemic, fleets need to keep their current vehicles in service until ordering new vehicles is possible again.
Ed Powell, Manager, Business Intelligence & Analytics at ARI stresses the importance of preventive maintenance. “The healthier your fleet going [into this pandemic], the better off you are,” he explains.
“So the clients who have invested the right amount of time and effort into preventive maintenance compliance, and the consistency with which they’re receiving PM services, they’re going to be able to weather this a little bit more. It’s never too late to start making [PM] a priority. So if you’re in the position of having to extend lifecycles on assets to a level you typically wouldn’t, PM on those vehicles becomes even more critical to ensure that they’re safe, and that you’re minimizing the risk of failure as much as possible.”
Another key piece of the puzzle is asset allocation. In other words, you’ll want to make sure each vehicle on your fleet is being used optimally. To help you do so, Sasha Arasteh, e-Mobility Services Manager for Shell Fleet Solutions, the Americas recommends harnessing the power of telematics.
“With our Vehicle Utilization Report, fleet managers can really dive into the data,” Arasteh explains.
“So they might see that vehicle 123, for example, is being used 20% more than vehicle 456. Both vehicles might be doing the exact same job in the same geography or the same area. Or maybe it’s even the same job site. That means you can reallocate resources by using one vehicle a little bit more than the other. By taking these measures, you can then reduce the amount of downtime you’re going to see with maintenance.
“The Vehicle Utilization Report ranks your top five and bottom five vehicles on a per week basis. Then, you can take that weekly information and look at it from a trends perspective to really make that well-informed decision, and use that as a true solution for maximizing fleet efficiency.”
ARI’s Powell explains how vehicles maintenance has a direct impact on fleet efficiencies.
“There is a significant delta between fuel economy and vehicles that are well maintained, versus vehicles that are not well maintained—whether it’s maintaining tire pressures, adequate oil change services, and so forth. That can make a big impact on fuel economy and overall vehicle life expectancy.”
One of the key challenges to keeping older vehicles in service is the rising cost of PM.
Older vehicles will have more repairs, and during this time of shortages, those repairs will cost more.
“Most businesses and companies are going to be experiencing significant climbs in operating expenses over the next couple of years as this situation plays itself out,” Powell warns.
“When it comes to inflation, I think the automotive and repair sector in the U.S. is averaging about 4.1% right now, for the year. So right away maintenance budgets are already up a few percent. Add ever-ageing equipment, increased risks of breakdowns, and operating expense budgets are going up a lot.”
A properly maintained vehicle, however, will only improve efficiencies so much.
The other piece of the puzzle is the person driving the vehicle.
“That’s a much more challenging thing, I think, for a lot of fleet managers to get their heads around,” Powell adds.
“So what we’re looking at here are telematics-based solutions that are helping us understand exactly how these vehicles are being driven. Are we dealing with jackrabbit starts? Are we dealing with hard cornering, harsh braking, or extended idle times?”
Powell points out that addressing some of these habits can improve fuel economy dramatically.
“We’ve seen impacts as high as 20-25% between a good driver and a bad driver, in terms of behaviour. But you need that telematics data in order to find out what’s happening with the driver behind the wheel,” he adds.
The proper vehicle for the job at hand is a key fleet principle, and one that should be kept in mind when fleets are finally able to place orders with manufacturers, says LeasePlan Canada’s and Foss National Leasing Canada’s Jennifer Chapman.
“You want to make sure you’ve got the right vehicle for the job,” she explains.
If you’re using vehicles that are too big, Chapman says, you’ll want something smaller because it’s more fuel efficient and less costly to operate.
On the other hand, if the vehicle is too small for the job, you’ll be paying a price in other ways.
Chapman says she knowns of situations where a fleet was employing vehicles that were too small for the job, which in turn affected fuel economy because the vehicles were carrying too much weight.
In addition, because the vehicles were undersized, they were burning through tires and brakes.
“So make sure you’ve got the right tool for the job,” she adds.
Since depreciation and fuel are two of your biggest costs, Chapman says fleets should choose vehicles that are going to retain their value four years from now.
“So if you’re looking at options that might be costing you money right now, like adaptive cruise control, or some of the other safety options that are considered ‘extras’ right now, four years from now, those options are likely going to be standard,” she says.
“Your used-vehicle buyer is going to want those features, and they’re going to pay the extra. Keeping this in mind will help you plan for the future.”