Analysis
1 Mar 22

Reaching economic and social sustainability in North America fleet management

Sustainability not only means being environmentally friendly, it also means helping your company endure in the face of challenges, a responsibility that all fleet managers need to continuously strive for today.

Join Global Fleet from 2-4 May during Global Fleet Conference 2022 in Lisbon (Cascais) where the overall topic of the event will be sustainable fleet management around the world. See you there!

One of the tricks for fleet managers is to be economically sustainable all while being socially responsible. This calls for reducing vehicle total cost of ownership (TCO) and achieving quicker returns on investment (ROI), all while accomplishing the ever so important task of keeping your drivers safe and sound. 

Among the main factors impacting TCO in the fleet market today is the microchip shortage which has resulted in lacks in vehicle supply and smaller discounts from manufacturers as they focus more on the B2C market.

Other factors include the price of raw materials such as aluminum, steel, and rubber which has increased the price and the delivery of tires and spare parts, not to mention the price of fuel.

While the price of gasoline increased 46% year-over-year in 2021 to US$3.28 per gallon in the United States, it rose some 37% in Canada to Can$1.61 (US$1.25) per liter, equivalent to US$4.73 per gallon. 

Finally, we cannot overlook inflation which was 7.5% in the United States and 5.1% in Canada at the start of 2022, significantly higher than the average over the past few years. This will likely start increasing interest rates in the region which currently boasts a low benchmark rate of 0.25%.

So, how do you deal with these challenges?

For one, North America is a huge and mainly decentralized market so consider working with multiple car manufactures. Furthermore, make sure you build strong relationship with a fleet management company to find the most cost-effective solution for your fleet.

“One of the challenges in North America is knowing how to deal with different climates. For example, while Canada may demand special tires or 4x4 vehicles, well tinted windows may be sought after in Florida, according to Jim Petrillo (pictured left) who is US and Canada regional fleet manager for Fujifilm Holdings America Corporation. 

Moreover, “while high residual values on used cars may entice you to get rid of vehicles, remember that the lack of parts and semi-conductors today are delaying new car shipments. Don't jump the gun,” Mr. Petrillo told Global Fleet. 

Sustainability can also be achieved by driver training, according to the fleet management team of US-based industrial manufacturere ITW (Illinois Tool Works Inc.).

“ITW provides driver training courses with specific modules. For instance, we have one basically aimed at teaching efficient driving and another which is more focused on reducing unnecessary idling,” ITW Global Fleet Manager Keith Scolan (pictured right) told Global Fleet.

Finally, we cannot talk about sustainability without talking about fleet safety or reducing the number of accidents you face in your fleet. Besides resulting in injuries and loss of life, you may have to deal with high vehicle repair costs not only for your employee but for third party individuals.

In the US alone, traffic accidents cost US$871 billion each year (US$2,639 per capita), according to the country's National Highway Traffic Safety Administration (NHTSA). 

Among the companies in North America specializing in driver safety programs are eDriving (USA), Safeway Driving (USA), Valley Driving School (Canada), and more.

So, as North America is a large area, make sure you know the specifics of each region all while building a trusted network of suppliers to support you along the way. In addition, educate your drivers appropriately and last but not least, keep them safe. 


 

Authored by: Daniel Bland