Each year, I’ve been in the habit of researching fleet management trends for the upcoming year. For a fleet manager, I’ve always found this exercise to be extremely helpful. This allows me to prepare so our team - including executive management and stakeholders -is not blindsided with anything on the horizon.
What fleet management trends will we see in the coming months?
Combing various industry publications and competitor predictions, below are a few of the major trends fleet managers are likely experience in 2022 and 2023:
Supply Chain Disruptions:
- The computer chip shortage and access will continue into the coming year and most likely won’t subside until mid-2023, when supply chains will catch up with demand.
- Costs will continue to increase in the coming months as the 40-year record inflation continues to plague the industry, supply chain disruptions persist, and life cycles are expanded. According to Automotive Fleet’s latest operating cost survey, unscheduled maintenance costs have increased 3% in CY-2021.
- The greatest challenge fleet managers face is the lack of availability of specific assets and equipment. This is due to the supply chain interruptions caused by the pandemic at the OEM level and with upfitters. Fleets are now forced to extend asset lives longer, resort to cannibalization, and may even have to source unsuitable replacement vehicles.
- Used car resale values will remain strong into CY-2023. However, with the expanding life cycles, fleet managers will have to engage in aggressive right-sizing initiatives using alternative transportation methods to reap these savings
- The shortage of spare parts back-ordered and unavailable will increase vehicle downtime and raise the number of spare assets.
- Shortage of rubber, oil-based materials, synthetic rubber, carbon black, and other chemicals is leading to rising tire prices.
- Lubricants and additive shortages, coupled with global shipping challenges, is leading to significant increases in the price of lubricants.
- Prices for copper, aluminum, iron ore, nickel, zinc, lead, and uranium continue to rise. In 2021, the metal price index is up 22% year to date.
Safety and Technology Adoption Issues:
- Safety concerns will likely rise as vehicle life cycles are extended and assets become subject to an increased propensity of catastrophic failure. Driver distraction will continue as a key factor for accidents as employees multi-task due to increased workload caused by staff shortages, growing concern over advanced technology on vehicles, and legalization of recreational marijuana use.
- Telematic technology will transform fleets by 2022. It's predicted that the global vehicle telematics market will be worth $103 billion. It's a market that's ripe for expansion: according to com, only 30- to 40-percent of American fleets use a telematics system, with cost being one of the major barriers to entry.
- As vehicles become smarter and more connected through sensors and IoT technology, telematics systems will make managing and running a fleet much more efficient and will likely offset the higher costs of maintenance and repair.
- 5G will open the door for greater innovations, such as augmented reality fleet applications and advanced charging technology for vehicles that run on renewable energy.
Maintenance and Repair Challenges:
- PM costs will rise due to more vehicles now requiring advanced synthetic motor oils.
- Higher demand for experienced technicians, coupled with the labor shortage, will inevitably raise labor costs.
- Fuel costs will continue to rise as the U.S. moves away from its recent energy independence and imposes more regulations on energy suppliers -- forcing the industry to source fuel from OPEC and other global consortiums.
Regulatory Changes on the Horizon:
- Congress is looking at requiring underride guards on trailers, semi-trailers, and single-unit trucks that weigh more than 10,000 GVWR, which will raise acquisition and maintenance costs.
- Safety-related components, including blind-spot warning, driver cameras, over-the-air speed trimming and assisted braking, among others, will continue to accelerate costs as legislated. However, these costs could be offset by reducing the number of collisions.
- New regulations for fuel and emissions standards by model year 2027 will most certainly begin to raise expenses - as they did back in 2010 - when OEMs scramble to reduce carbon dioxide emissions and fuel consumption on engines by upwards of 4%. Environmental Protection Agency (EPA) is finalizing the most ambitious federal greenhouse gas (GHG) emissions standards for passenger cars and light trucks ever. The final standards, for Model Years (MY) 2023 through 2026, leverage advances in clean car technology to unlock $190 billion to adopt EV technology. The momentum for electric vehicles (EV) will continue to rise as fuel prices start to exceed the $4 per gallon threshold. However, acquiring more EVs will certainly raise fleet costs in the short term.
- Changes to parts, maintenance, and repair will find sourcing will move from external to traditional OEM dealer networks. The complexity of modern EPA compliant vehicles has necessitated a secondary service network for PM, tire maintenance, replacement parts, and extended maintenance procedures.
Data Management Importance:
- Web-enabled technology and fleet management information systems will be driving the future of fleet management as it relates to data transparency and is used to optimize fleet assets as costs skyrocket.
- 5G technology is now becoming prevalent and a force to be reckoned with, as fleets begin to adopt this technology. On a fleet management level, the 5G benefits can translate into a smoother transition to Vehicle-to-Everything (V2X) communication, improved predictive analytics, smarter vehicle tracking, and data collection.
- Increased data visibility adoption of IoT, is increasing the data-driven approach to having full transparency and control over the fleet business. Fleet managers will be asking themselves how they use more data and insights to drive business optimization and change.
- Fleet management organizations will seek more analytical resources to assist in the data collection, management, and interpretation. The role of “Fleet Analyst” will continue to be in high demand as managers seek to get ahead of high costs and industry changes.
As we see, many challenges will face fleet managers over the next few years as they cope with these industry trends. However, the one thing I know about my colleagues in fleet management is they are resilient and flexible in adopting proactive measures to become more efficient and effective as these trends are manifested. The team at RTA, the Fleet Success Company, is quickly expanding and preparing itself over the next year to help our partner fleets manage and access the data necessary to deal with these market changes.
About the Author: Steve Saltzgiver is the Director of Strategic Innovation at RTA. His primary role is to help RTA make fleets successful. Steve is a long-time veteran of fleet management, having directed two large corporate fleets of over 50,000 assets with budgets exceeding $1 billion annually, and two large state fleets. He has been recognized as a fleet management expert and consultant. Currently, Steve is a member of the RTA Executive Leadership Team and directly oversees the Product Management Group and helps lead organizational strategy. The RTA Product Management group’s primary responsibility is to create leading- edge products and services to aid fleets with a winning strategy to become successful.