North American fleets re-prioritize and join forces
The COVID-19 pandemic is causing organizations to reassess and re-prioritize. Identifying fleet industry trends in this climate is difficult but 2020 should be known for the 4Ps – reduced vehicle production, ingenious pivot strategies, partnering for survival and prioritizing employee care and productivity.
Read more in the 2020 edition of the Global Fleet Survey, which can be purchased by clicking on this link.
The pandemic has shut down vehicle production around the world. IHS Markit reports that the U.S. will take the biggest hit from the pandemic as overall auto sales fall 26.6% to 12.5 million units. Fleets have unfilled vehicle orders and are re-planning to cope with shortages. Fleet Management companies adjusted quickly to production shortfalls and moved cars within and between organisations as needed.
In the commercial vehicle market, the North American market is expected to slump more than 30%. Commercial vehicle activity is an important indicator of economic recovery and the Commercial Mobility Recovery Dashboard showed that commercial vehicle activity in Europe dropped by 36% since mid-March, whereas North American commercial vehicle activity only dropped by 20%.
The need to pivot
The ‘pandemic pivot’ is the ability of an organisation to respond to what appears to be our new reality on a monthly, weekly, and sometimes daily basis. Gin factories are making hand sanitizer, car companies are making ventilators and school busses are moving meals for shut-ins rather than students. In all cases, fleet organisations have been instrumental in predicting future needs and adjusting fleet size, vehicle type and operational strategies to support.
The need to pivot has amplified the importance of industry disrupters like technological innovation and autonomous solutions. Over the past decade, fleets have benefitted from relatively positive economic times to invest in digitization and process improvement.
These investments have a huge pay-off in the pandemic-induced recession where technology is aiding tough decisions on efficiency improvements and employee safety. Strategies that keep people out of shared transportation are now taking precedence, at least for the short term. Proactive organizations are embracing technology platforms that keep employees at home and innovative ways to provide mobility without endangering people – keyless, touchless and autonomous are all prospering.
Cooperation via strong partnerships
North Americans, and indeed the world’s population are living in unprecedented times. This has led to a virtual need to come together and share information in fleet circles. The leading fleet management notfor-profit agencies have led the charge in this regard by promoting mutual education offerings and encouraging member engagement and crossinteraction.
Fleets are also discovering that time invested in establishing strategic partnerships and a robust supplier relationship management (SRM) program is worth the cost and energy. Strong relationships are making a difference in access to vehicles, parts, and services across the industry. The desire to survive is also forcing cooperation between former competitors.
According to the Bureau of Labor Statistics, automakers and their suppliers, admittedly only a small part of the fleet industry, employ approximately one million people in the U.S. Add in the Fleet Management companies, government and corporate fleet organisations and their suppliers, and you have a lot of employees who need to touch vehicles to make the fleet eco-system work. The protection of these people, whether factory workers, drivers or technicians is being prioritized.
Most fleet organisations are allowing work-fromhome for administrators, rotating or staggering shifts for technicians, moving to virtual inspections and meetings, sanitizing constantly and discouraging use of pooled vehicles. Some of these changes will stay post-2020 and will absolutely change the way we do business.
Although it can be said that each year brings its own changes and challenges to the fleet industry, 2020 is poised to be a pivotal year. While technology remains a key disrupter, the global pandemic has made it essential for fleets to pivot and partner for success while ensuring employee well-being.
Author: Kate Vigneau, NAFA