Category: Insights

Operating a fleet involves a lot more than simply putting a driver behind the wheel of a vehicle and sending them on a route. Every time a commercial vehicle takes to the road, there are regulations set by the Department of Transportation to comply with. By utilizing our services at Onward, navigating the roads and the regulations becomes a much less daunting task.

What is a Commercial Vehicle?

DOT regulations are applied to every commercial vehicle that operates in the United States. A commercial vehicle, outside of those owned by a company, can also be defined as any of the following:

• Transports 16 or more passengers, driver included, without compensation
• Transports 9 or more passengers, driver included, for compensation
• Weighs at or above 10,001 pounds
• Or transports hazardous materials in quantities that demand a hazardous materials placard

What are DOT Requirements?

DOT regulations themselves span everywhere from hours of services to licenses and permits to vehicle inspections. Making sure that you are in compliance with all DOT regulations is an ongoing, labor intensive task that includes record keeping, random drug and alcohol tests, cargo securement, etc. Failure to comply can result in hefty fines and potentially business closure.

How Can a Fleet Management Partner Help?

However, utilizing a fleet management partner takes the guesswork and labor out of your hands. At Onward, we are familiar with DOT regulations and experienced with maintaining compliance. Our expertise can help your business to focus on what it does best, while offering the peace of mind that comes with assured compliance.

It’s no secret that everyone is experiencing headwinds in multiple areas so in an effort not to be too redundant, our goal is to provide some perspective and helpful ways to overcome the challenges.  We see the following areas that have impacted or may impact your overall fleet operations.

1. Supply Chains
2. Labor Shortages and Labor Rate Increases
3. Fuel Costs
4. Continued Leverage of Technology and Asset Management
5. EV’s Continue to Gain Momentum

SUPPLY CHAIN

If you haven’t already, companies should be planning on 2022 inventory replacements.  In most cases, OEM’s haven’t published fleet ordering and production schedules for the 2022/2023 model year.  All immediate inventory needs will require off-the-lot purchasing and/or retail ordering which ultimately means higher vehicle pricing.  While new vehicle pricing is higher so are resale values so it’s basically a new zero impact when you are replacing units.  Supply chain challenges are also causing extended lead times for some vehicle maintenance repairs.  In short, we expect to see continued challenges throughout 2022 but we also see it as an opportunity to leverage Onward and the fully integrated data to assist with strategic planning and make data-centric decisions.

LABOR SHORTAGES and LABOR RATE INCREASES

The great resignation is no joke.  It’s becoming more and more difficult to retain current employees and we all know how challenging it is to hire new employees.  I know this goes without saying but the labor shortages aren’t helping the supply chain challenges either.  As for labor rates, we have seen some sudden jumps from many of our service shops in our national network of over 55,000 shops.  We are seeing hourly rates range from $85 to $175 per hour.  Onward strives to leverage our relationships at a local, regional and national level but we expect labor rates at vehicle service facilities to continue rising and the gap of these labor rates to tighten.  There is no better time to focus on ensuring preventative maintenance is 100% compliant.

FUEL COSTS

This is a great article that provides some perspective on 2022 fuel prices.  In our research, we are seeing the labor and supply chain shortages making it difficult for U.S. oil companies to increase production to match the demand.  Additionally, oil companies are a little hesitant about overproducing should demand have a sharp decrease.  If you don’t have proper visibility into your fuel spend, we strongly encourage an assessment to help leverage resources and/or savings to keep all fuel spend optimized.  We have experience with on-site fueling stations, fuel card programs that align with your company, and mobile fueling alternatives.  There isn’t a “one size fits all” approach, but fuel spending is a significant part of your fleet operating costs.

TECHNOLOGY AND ASSET MANAGEMENT 

In studying 2022 fleet technology trends, we are seeing new data uncovered about how the pandemic has changed the way people work. Gone are the days of using fleet technology for simple tracking. With a comprehensive telematics (GPS) strategy, Onward can help you combat the driver shortage, decrease costs, improve not only productivity but allow for a more proactive approach when it comes to maintenance. Another fleet technology trend to continue through 2022 is increased data accessibility. By utilizing one dashboard for your fleet’s data you get an overall insight into your asset’s health, driver behavior, return on investment (ROI), and total operations costs among other data points. With this additional insight, Onward can help you make data-driven decisions to reduce downtime and improve productivity for increased profitability.

ELECTRIC VEHICLES (EV’s)

2021 saw an all-time high in electric vehicle (EV) sales and, as emissions regulations continue to tighten, EV adoption is forecast to increase again in 2022. “Among the driving forces behind electrification are sustainability interests and federal, state, and local government mandates,” according to Tim Baughman, Ford Pro General Manager, North America. “Commercial customers are starting to understand that EVs are good for business, from reducing emissions to increasing sustainability, building brand value, productivity gains and a 40% reduction in operating costs as it relates to maintenance.”

Rental company Hertz has reportedly put in an order for 100,000 Teslas, half of which Uber has committed to renting for its drivers. While light-duty vehicles may seem easier to procure than medium- and heavy-duty vehicles, original equipment manufacturers (OEMs) are cranking out models for all industries, from construction and utility to long-haul and public transportation.

If your finger is on the pulse, you’ve already seen the statistics on eclectic vehicle (EV) adoption. Between 2018 and 2019, there was a 40% increase in EV sales; they now account for more than 2.6% of global car purchases. Battery prices are dropping and technology is evolving, making EVs more affordable, and less limited by range issues, than at any other time in history. Add in incentives, many of which apply to fleets, and the landscape is quickly shifting. Simply put, EVs are becoming more feasible for fleet owners—and the trend toward increased capabilities and decreased costs is only expected to continue.

As a longtime fleet management executive, I’ve witnessed this shift taking place over the last 10+ years. But statistics are one thing; experience is another. Despite the rapid increase in adoption, teams with quantifiable “boots on the ground” EV experience are hard to come by. Content online reflects this reality, with few articles providing insights gleaned from real EV fleet projects. That’s why I’ve decided to share my experience, both as a fleet manager overseeing EV acquisition, infrastructure and implementation strategies, and as a customer. 

Whether you’re considering a shift to EVs or are interested in keeping tabs on “what’s next” for our industry, I hope these insights will help you navigate the terrain—and, when the time is right, seize this emerging opportunity for enhanced efficiency.

Launching a CNG Fleet

In 2008, EVs were just entering the fleet world’s radar. It was around this time when I began studying the viability of alternative fuel strategies—primarily CNG and EV—for Chesapeake Energy’s 7,000 vehicle fleet. As Vice President of Administration, the company’s fleet was one of the many areas that I directly led. We were ahead of the curve in terms of alternative fuels, and it was exciting to be on the ground floor of this two-year project. Our emphasis was on designing a solution that optimized the TCO—a goal just as relevant today as it was a decade ago.

Over the course of those two years, I learned a tremendous deal about the reality of alternative fuels for growing fleets. Once we confirmed the viability of CNG adoption, I worked with infrastructure, installation and service partners, and the OEM, to ensure our vehicle lifecycle accommodated the shift. This alignment was, and still is, critical to maximizing the value of your alternative fuel strategy. Every stage of the vehicle lifecycle needs to reflect your decision to “go EV.”

Another key piece of the puzzle was navigating infrastructure—a job that required both private and public relationships. We brought on Love’s and OnCue as primary partners, helping Oklahoma rank #2 in the nation for per capita CNG infrastructure. Along with establishing those relationships, my team also took on another major challenge: Purchasing city and state vehicles, converting them to CNG and establishing conversion kit tax incentives. Many of those incentives still exist in Oklahoma today. Although EV infrastructure is seemingly becoming more established by the day, it’s important to identify what your fleet requires from an operational standpoint—and build partnerships to deliver on that need. Charging stations, serviceability, OEM options and both federal and state incentives are all critical to optimizing your EV fleet’s TCO.

After-market installations are complex undertakings for any fleet, but CNG conversions required an even more sizable learning curve. I helped facilitate the installation of CNG kits, ensuring that manufacturers received certifications from both the OEM and EPA. In all, our internal conversion project involved 1,000 vehicles. I led those efforts, developing and overseeing a strategy that completed the job in 12 months without disrupting operations. When undergoing conversions, senior leadership buy-in is critical. So is a solid understanding of all the variable key resources, how they integrate, and the factors that could negatively impact the project financially and operationally.

At the time, Chesapeake Energy was leading the charge toward alternative fuel vehicles. But as with CNG infrastructure itself, wider industry adoption required true partnership. I was part of a working team that unified key players in the E&P industry behind CNG adoption. The result was a nine-figure multiyear commitment to purchase OEM bi-fuel vehicles that could run on CNG and gasoline. This eliminated fuel range anxiety. With the industry taking notice, I shared my experience at a NAFA and Telogis Latitude conference. The emphasis of my presentation? Bringing the chicken and the egg together to develop a solution delivering measurable ROI.

Preparing Fleets for EV Adoption

After my time at Chesapeake Energy, I continued to drive progress in the alternative fuel vehicle space. As Chief Administrative Officer for a major auto group, I helped prepare brands for the shift to EV: training service departments on the requirements of EVs; reviewing infrastructure footprints locally, regionally and nationally; identifying grant applications; and, similar to the CNG project, navigating OEM options, serviceability, resale value, charging station availability and required partnerships. Each step of the way, my process reflected the same ethos we embody at Onward: driving progress that optimizes the TCO.  

As the EV landscape evolves, fleet owners and managers are hearing more buzz than ever. But few people talk about issues like scaling serviceability and determining resale value. These details are critical to reaping the most value from alternative fuel vehicles. Getting them right requires real “boots on the ground” experience with EVs. At Onward, our team has demonstrated leadership in alternative fuel vehicles, and that experience gives us the insights required to craft end-to-end strategies for our customers. Because when your fleet’s profitability is on the line, your decision should be about more than fuel costs alone. From service and maintenance to tax incentives and remarketing, every stage of the vehicle lifecycle is impacted by the shift to EV. The more experience in navigating that shift, the more opportunities you have to ensure it optimizes your TCO.

Are you exploring whether alternative fuel vehicles are right for your fleet? Do you need a partner with a track record for optimizing EV fleet operations? We’re here to help.

Fleet management systems. Telematics. GPS. Data from numerous sources. As technology continues to move fleet management forward, managers have to oversee more moving parts than ever in their quest to optimize their total cost of ownership (TCO). But managers are also being challenged to do more with less. In this market dynamic, it’s essential to separate the “nice to have” elements of fleet management from the “must haves”—the ones that truly optimize your costs and boost your bottom line.

We’ve developed this fleet foundation checklist to help you quickly identify six essential elements of your fleet management operations. Whether you’re just launching a new fleet or are revisiting your approach in 2021, consider this your quick guide to “must have” components of a savvy, optimization-minded program.

1. Fleet Management System: Today’s fleet managers have access to more data, from more sources, than ever before. To make the most of your fleet data (and streamline analysis), it’s critical to have a single fleet management system. These systems will help you integrate your operational and financial data, quickly pull critical reports, and gain a “full picture” view of your TCO and overall fleet efficiency.
2. An End-to-End Strategy: Your fleet management strategy should incorporate all the major stages of a vehicle’s lifecycle: acquisition, operation (maintenance, fueling, safety and compliance) and remarketing. By taking this end-to-end approach, you can identify more areas for cost savings and ensure that you maximize efficiency at every stage. The decisions you make during acquisition, for example, can impact not just your operational costs, but the value you reap during remarketing. Timing is also key. When you use the vehicle lifecycle as the foundation of your strategy, you can ensure that you make the best possible decisions not just for a vehicle’s current status, but for its overall TCO.
3. Collaboration Framework: This might sound obvious, but it’s critical to establish a strong framework for communication and collaboration. It starts with alignment across all key parties. At Onward, we think of the Fleet Department or Manager, Leadership and Operations as three legs of the stool. When all parties are on the same page, you’re on solid footing. But when one function is unclear, the stool quickly begins to wobble. A consensus isn’t possible in every circumstance, but by establishing open, frequent and honest communication, you can understand all parties’ perspectives and secure the strongest possible foundation.
4. Mechanism for Capturing Driver Feedback: When you’re busy managing a fleet, it’s easy to overlook the importance of driver feedback. However, the drivers are the customers, and they need to be treated as such. Establish a mechanism for capturing driver feedback annually or, ideally, more frequently. Remember that drivers are often using their vehicles to generate revenue for the organization, and their insights can help uncover more opportunities to lower your costs.
5. Process Documentation: In fleet management, every second of downtime or wait time represents lost productivity. Establish an agreed-upon process to keep things moving swiftly. This is especially important for vehicle replacement and both preventative and emergency maintenance.
6. Fleet Policy: The word “policy” likely brings to mind tedious, time-intensive work. But a fleet policy is essential to ensuring accountability—and accountability is essential to a well-run fleet. By taking the time to create your fleet policy now, you can avoid unexpected costs and headaches down the road.
7. Fleet Management Partner: If your program is lacking one of the essential elements above—or other cost-savers such as fuel programs and safety technology—consider adding a fleet management partner to your “must have” list. High-quality fleet management companies will provide flexibility to meet your true needs: either supplementing your in-house capabilities or providing end-to-end management, depending on what’s best for your business. When seeking out a partner, prioritize a team that takes a comprehensive approach to spotting inefficiencies. And because no two fleets are the same, the ability (and willingness) to craft customized solutions is critical.

Does your organization need help setting a strong foundation for fleet operations? Could you benefit from an expert partner that identifies opportunities for optimization and lowering your TCO? Do you need to craft an end-to-end strategy or secure a more cost-effective maintenance program? No matter your needs, Onward’s team is here to help. It’s not too late to make 2021 your fleet’s most successful year yet. Contact us to start the conversation.