Automotive Fleet views itself as a facilitator to provide a platform for different voices from the industry to sound-off on today’s challenges. This regular column is designed to encourage discourse for fleet professionals to let their voices be heard to their peers and other industry professionals.
Here is what is top of mind for fleet professionals today:
Impact of Microchip Shortage
The pandemic has impacted all areas of our lives including the fleet world.
Vehicle production was disrupted last spring, and now it is expected that this microchip shortage will significantly impact at least the remainder of the 2021 model-year if not rolling into the 2022 model-year (during the second half of this calendar-year). Planning will be of the utmost importance this year as dealers also have low inventories.
Joel Wayne Hamilton, Area Sales Manager, Enterprise Fleet Management, Chicago, Ill
Can’t Steal Units from Retail
I agree with the Market Trends blog “Supply Chain Constraints Impact Lead Times for 2021 Model-Year Orders.” Any sold fleet orders with GM will be 2022 models. You can’t even order until mid-May.
Will see the order delivered in November to December timeframe. It is very hard to steal units from retail as they are in very tight supply as well.
Gail Halderman, Business Elite (Fleet) Manager, Murray Chevrolet Cadillac, Medicine Hat, Alberta, Canada
A Time for Fleet to Shine
As e-commerce and customer expectations have changed during the pandemic so too has the need for fleet strategy to quickly adapt and present new innovative initiatives that reduce cost and provide for effective vehicle utilization and replacement strategies. For some fleets this may be a time of increased focus from top level management to assist with strained delivery/service models, present new ideas and stay abreast of all of the compliance and driver focused changes.
With the spotlight on fleet, it’s an excellent opportunity to showcase what fleet can do to enhance the customer experience and add value to the organization. This is also a great time to connect with your drivers, those working with the fleet vehicles and executives to identify any pitfalls or efficiency gains that could be gleaned from open and frequent communications.
Fleet right-sizing is another opportunity to shine. If not done so already now is a perfect time to think about right-sizing the fleet. Not to be confused with downsizing. Take a concerted effort to match right vehicle, right place for the right job. Looking at payload/cube capacities and determine if transferring assets across business units will benefit by shifting GVW up/down whereas in a pre-COVID-19 strategy assets may have been replaced like for like. Lifecycle management (TCO) models may need to be revised based on OEM production and availability. The quality of those programs should be reviewed to determine where fleets can flex shorter or longer replacement strategies to meet the forecasted chassis production runs.
Focus on the “how” and “when” of vehicle replacement and be ready to adapt quickly to a changing environment. Remember to consider longer delivery transport times and lengthened title and registration services by state DMVs. Build a forecast of vehicle replacements as far forward as possible, at a minimum 24 months, and be ready to leverage orders when OEM order banks open. It is important to re-evaluate fleet policy, procedure, and process.
With the rapid changes in the fleet ecosystem this past year now is a good time to take the opportunity to refresh fleet policy and procedure to algin with current and future best practices. Fleet processes need to be refreshed to match implemented programs and initiatives. Process changes could include fuel card use, truck cleaning, “no-contact” repair and maintenance drop-off and pickup, how new vehicles are received and placed in service, etc. Remember to survey PM schedules and link back to vehicle replacement strategies most especially if changes are made to retention parameters.
Thurman Register, Senior Fleet Manager for Ferguson
Commercial Truck Shortage
The blog “Supply Chain Constraints Impact Lead Times for 202 Model-Year Orders” was well written. It was an excellent article that perfectly describes the current commercial truck shortage.
David Word, South Central Region Sales Manager Monroe Truck, Equipment and Modifications, Dallas-Fort Worth Metroplex, Texas
I enjoyed the Dec. 28, 2020, State of the Fleet Industry video report given by Mike Antich that recapped the key milestones that occurred during the 2020 calendar. Awesome work Mike!
Christel Fannin-Cline, Sr. Vertical Solutions Consultant, LexisNexis Risk Solutions (Connected Vehicles), Chicago, Ill.
Fixed vs. Floating Rates
As discussed in the Jan. 25, 2021 State of the Fleet Industry video report on emerging upward pressures on fleet costs, the commodity prices are going up, which will also trigger inflation. In order to stop the inflation, the federal government will increase interest rates which are now almost zero.
This might control the inflation rate but fleets will pay more in financing their fleet purchases. This might be a good time to start and think of converting floating rates into fixed rates. This is just one more item in the cost basket that fleet managers will have to pay attention to.
Phil Schreiber, Contract Specialist Temp, Schindler, Bloomfield, Conn.
Last-Mile Delivery Fleets
I watched the State of the Fleet Industry weekly video report that focused on last-mile delivery fleets.
I want to let you know that it was great reporting and the content was right on!
Todd Welle, VP of New Business Development, PLM Trailer Leasing, St. Michael, Minn.