19 Sep 23

Merchants Fleet, Brendan Keegan: Overcoming challenges in today’s fleet management

During a recent visit to the Eastern United States, Global Fleet stopped by the Merchants Fleet Summit in Southern New Hampshire just outside of Boston to have a few words with the fleet management company’s CEO Brendan Keegan.

Take a look about what he said about leasing contract terms, vehicle selection, electric vehicle (EV) deployment, and more.

left to right, Merchants Fleet CEO Brendan Keegan and Global Fleet Editor of the Americas Daniel Bland (copyright: Daniel Bland)

The last time we talked, I believe you had approximately 170,000 cars in your portfolio. What is it today?

Keegan: We are at approximately 185,000 vehicles right now, being some 30,000 from our mobility group of which we own ourselves and rent them out for shorter periods. For instance, if you are a company doing a construction project or you are a last-mile company, you may only need it for 3-4 months. 

The remaining 155,000 are financed for our clients, meaning we acquire, register, and manage these vehicles for them on long term leases of, let’s say 36-48 months. 

I just spoke to a fleet manager that told me that she will be trying out that shorter rental service you are offering, so are you looking to increase this new rental service?

Keegan: Yes, it's been the fastest growing part of Merchants Fleet business over the last five years. Let me tell you what happened. We have had our long-term clients forever, but they started telling us that we use you for long term, but we do shorter term rental with other players. 

So, we started introducing this new offering about six years ago and now that our clients are able to get both their long term fleet and the short term fleet from us, it is a big advantage for them. 

And what kind of vehicles do you have? Are they mostly light commercial vehicles (LCV)?

Keegan: Considering the asset mix of the fleet we own and rent out, they are 95% cargo vans and pickups. This is also true for some of our long-term fleet for what we call vocational fleet or to say those focused more on moving goods and services than people. 

I’m talking about companies such as last mile, construction, project management, and utilities. I’d say this is the preponderance of our business.

You have recently agreed to buy 12,500 RAM ProMaster vans. When will you be acquiring these?

Keegan: It will take a long time to build those and then to acquire them as well. I need double check exact dates, but I’d say that we will be acquiring over the next few years. They are certainly in need though as there just aren’t as many manufacturers on the cargo van side as there are for pickups. 

So, is a lack of van offerings one of the challenges in the industry today?

Keegan: Yes, there are about 10 different companies that make pickups and if you think of sedans, there are 30 or so. However, when you think of cargo vans, there are only a handful. You’ve got Dodge, Mercedes Benz Sprinter, Ford Transit, and also Chevy Express but that's less of a high Roof Cargo Van. 

And then for eVans it is even less. As you know, we’ve got the Brightdrop vans, but there just aren’t that many to choose from. 

Do you feel that the RAM ProMaster gives fleet managers an advantage?

Keegan: Well, we are OEM agnostic. We have vehicles such as Ford Transits, GM Expresses, and Brightdrops, as well as the RAM ProMasters. We offer both ICE (internal combustion engine) vehicles and EVs. 

Fundamentally, we really focus on what the right application for our clients is. In terms of EVs, which differ from ICE vehicles, we need to match the range needed for each client and do a total cost of ownership (TCO) study with them. 

It could say something like the Ford Transit makes more sense in this part of the country while the Dodge Promaster makes more sense in this other part of the country. It could also be that no EVs make sense in a particular region as there is no infrastructure. 

So, we never really say that this is the vehicle for you as we need to get our fleet consulting team to look at your applications. For instance, if you are in New York City, you average under four miles a day of driving. If you are carrying out deliveries in Wyoming, you may be averaging four miles between each delivery so that's a different story. 

We may also need to recommend vehicles that fleet managers may not be expecting. A fleet manager may come to us saying that they want a Ford F-250 but our consultant may discover that they only need a Ford F-150 after asking questions about payload and usage. Large payloads may only occur a few times a year and only in some areas. If a fleet manager does not need a heavy-duty truck, we will suggest getting a less expensive vehicle.

Like I said, we are OEM agnostic. We want to build relationships with manufactureres and make commitments to buy certain numbers from them. In the end, we find what’s best for our client based on TCO.

What challenge do fleet managers need to look out for in terms of deploying EVs and what can be done about it?

Keegan: The biggest challenge of EVs today is having the appropriate infrastructure. Let’s say you have your own building, and you feel that you can put in as many chargers as you want, maybe 20 chargers set up for nighttime charging at your office or depot. 

You may find out that there isn’t enough electricity in the grid to power 20 chargers in your area or you need to go get a new power station, issues that could take a few months to resolve. 

So, make sure you plan ahead and plan appropriately.  If you want 20% of your vehicles to be electric, plan two years in advance. Besides knowing that EVs take more planning than ICE vehicles, remember that getting vehicles is one thing but having the appropriate charging solution is another. 

There are office, home, and field charging solutions so you need to know the profile of your fleet and you need to know what you really want to do to set up your electrification strategy. 

Questions to ask yourself

  • How many EVs do we want, and by when?
  • Do drivers bring their vehicles home?
  • Do drivers have field projects to take care of?
  • How will we avoid paying home electricity bills that are not EV related?
  • Have I prepared a comprehensive TCO analysis?

Keep in mind that OEM incentives are down nowadays and prepare for changes in interest rates and prepare yourself for inflation. A vehicle bought in 2020 could be around 48,000 today (2023).

Also know that locations differ. For instance, California has better rebates, incentives, and infrastructure than many other states right now. To help you along the way, I think that hiring a fleet management company to prepare the entire ecosystem (charging, power, utility, vehicles, etc.) makes sense. 

They not only do the consulting, but they also need to back up what they say. You need to hire companies that own what they do, meaning that they will be focused on doing a good job after they have given their suggestions.

Finally, know that the EV landscape is changing quickly. We put our first charges in here in the beginning of 2020. We are already switching some of those out for new technology and it hasn’t even been three years.

Remember that putting together a top notch multinational fleet and mobility management strategy is key for any global fleet mangager. To benchmark your strategy with your peers, download the full results of the 2022 Global Fleet Survey here. At to participat ein the 2023 Global Fleet Survey, click here

Authored by: Daniel Bland