Business Fleet, November/December 2020

WWW BUSINESSFLEET COM 8 BUSINESS FLEET November December 2020 Increased order to delivery times Supply and product availability issues Rising equipment costs and the need for creative funding These are some of the many concerns that smaller business fleets face as they continue to confront the coronavirus pandemic Six fleet professionals two from fleet management companies a consultant an automakers fleet dealer rep and a commercial and government fleet operator share their perspectives on what to expect in the immediate future and how to prepare for another disruptive year for fleets 1 UTILIZATION VARIES BY USE CASE Kevin Myose fleet manager for San Joaquin County in California is seeing severely decreased utilization for his pool vehicles due to COVID 19 risks though hes realizing the benefit of lower operating costs because of less miles driven Unfortunately many of the underutilized cars are in our electric fleet which will slow the exposure and integration of EV technology he says Meanwhile other internal customers are experiencing increased utilization and are adding more vehicles mainly to provide adequate distancing To compensate for upticks in utilization most notably our Public Works we held off selling older units and made them available to our work crews Myose says Jeff Perkins vice president of operations for fleet management company Motorlease has seen case by case vehicle usage patterns too In certain parts of the country things never really shut down and in other places usage is up because people are driving more than theyre flying right now he says adding that working remotely is a mitigating factor Though he hasnt seen many drivers placed on furlough Perkins says many of the ones who were particularly in the retail sector were allowed to hang onto their cars 2 OTD INCREASES AFFECT ALL SECTORS OF FLEET Overall were definitely seeing order to delivery times increase and this will certainly be felt by small fleet operators says Ted Davis vice president North American supply chain for ARI a fleet management provider Were already seeing extended lead times for production across most OEMs Because of that the industry might see order cutoff dates being pulled forward he says Factors influencing order to delivery time such as licensing and delivery are still recovering from the impacts of COVID 19 which will further extend the overall order to delivery timing For Myose OTD mightd only be an issue for specialized vehicles such as the countys patrol car fleet This is a niche market with several municipalities competing for similar goods he says We had to cancel an order last year for 10 Dodge Chargers due to transmission supply shortages and that was pre COVID 19 I would expect prices to rise for these products as well Myose is also seeing prices rise especially for heavy duty trucks A dump truck we bought last year was 135000 the same truck now is 165000 3 INVENTORY WILL BE SPARSE Manufacturer shutdowns in early 2020 severely limited product availability This had a significant impact at the dealership level where smaller fleets acquire most of their vehicles Traditional fleet specd vehicle inventory is sparse while most manufacturers focus on reestablishing an adequate supply of retail vehicles for their dealerships across the country This will undoubtedly have a negative impact on the availability of fleet units Davis says Perkins says that the mentality of the small fleet segment is Drive it until it FLEETS FACE IN A CHALLENGING YEAR AHEAD FACTORS Next year small fleets will face increased order to delivery times supply and product availability issues and rising costs What can you do to prepare BY DARYL LUBINSKY CHRIS BROWN 7 OPERATIONS