David Brennan, CEO at Nexus Vehicle Rental, discusses the main obstacles facing the fleet industry this year and how flexible rental solutions can help mitigate these challenges.

David Brennan, CEO at Nexus Vehicle Rental

The past two years have brought with them a new set of challenges for the fleet sector. Alongside the global Covid-19 pandemic, vehicle manufacturers have grappled with the global shortage of semi-conductors, factory shutdowns and staff absences.

There are likely to be additional and continued challenges facing businesses in 2022. The semi-conductor shortage shows little sign of abating, with industry analysts currently predicting that it could continue until at least the end of this year.

The shortage has played havoc with the just-in-time supply chains of modern vehicle manufacturing and threatens to increase costs, along with the continued cancellation of replacement orders placed with manufacturers, clearly illustrating the knock-on effect of this shortage.

As a result of the shortage of microchips, many car manufacturers have been forced to severely slow production, even as demand for new cars has soared and this has led to new vehicle order times extending from six to nine months and even up to a year.

Lessening the load on fleet operators

Due to the challenges of the pandemic, van and truck operators have faced increased pressure to perform at their peak over the last two years and managers have had to focus even harder on getting the most from their fleets, whilst considering the future of the business. Commercial vehicles have been in particularly high demand during this period, most notably in the home delivery sector As people have become even more accustomed to ordering products online, this delivery demand is likely to remain at a high level.

As a result of the new vehicle shortage, vehicle rental providers can support their customers by finding alternative solutions, including possibly extending existing vehicle life cycles and offering flexible buy-back deals on current fleets.

Like everyone else, Nexus has needed to overcome its own challenges throughout the past two years, but our unrivalled supplier network ensures that we are best placed to continue keeping businesses mobile. Our intelligent booking and rental management platform, IRIS, ensures that we have full visibility of the availability of vehicles across UK suppliers and can help to mitigate

Alternative mobility solutions

The vehicle supply shortage has encouraged suppliers to move away from supporting short term hires such as one-day, one-way bookings due to the difficulties related to vehicle supply. In response to this change, Nexus recently launched its new passenger taxi service, Nexus Go providing a more efficient way for people to get where they need to be by helping businesses overcome supply challenges and enabling an alternative means of transport.

Nexus Go provides customers with access to an online taxi booking portal serviced by over 2,500 taxi companies throughout the UK, as well as journey progress and location updates. While the industry is still dealing with vehicle supply challenges this innovative solution ensures that customers can make required journeys without needing to take on additional rental vehicles for single trips.

Bumps on the road to electric        

Semi-conductor shortages aren’t the only issue continuing to disrupt fleets in 2022. As a result of restrictions imposed in the two years since the pandemic began, we have seen the sharpest drop in carbon emissions around the globe since records began, in particularly throughout 2020 when the UK was put in a complete lockdown. This fall in emissions has put the spotlight on climate change; with businesses, consumers and Governments focused on action. However, the question is whether the automotive and transport industry is doing enough to accelerate the pace of change required.

Of course, ‘going green’ has been a trending topic in the global automotive industry for some time, as manufacturers have invested billions of pounds to develop the cleanest vehicles in history, with emissions from new vehicles at an all-time low. As the transport industry becomes more interested in the notion of ‘green’, increasingly we are seeing a switch in the sector towards more eco-friendly power sources, however, there is still a long way to go on the road to green mobility.

As we move closer towards the ban on the manufacture of new petrol and diesel vehicles by 2030, it is vital that businesses focus on, and plan for, moving towards operating 100% electric fleets, including CVs and HGVs. However, with current order times being extended on new vehicles, this may be causing challenges for businesses and slowing the transition to electric fleets, as businesses are choosing to not make this investment right now when they will not receive the vehicle for a long period of time.

Whilst there are still supply shortages in the market, there are simple things that businesses can do in order to mitigate these challenges, including booking in advance as soon as you know of the demand and extending hires of specialist vehicles if they are likely to be required again in the near future.

Going forward this year, it is vital that fleet managers think creatively and take advantage of the innovative, unique solutions available to them when operating against a backdrop of supply shortages and high demand, including alternative means of transport such as taxi services.

That way, their people can  get where they need to be, without accumulating huge costs.

To learn more about how Nexus is working to address these issues in the market, tune in to its webinar on 8 March. You can register here.