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Future fleet strategies pose business dilemma

By / 4 months ago / Latest News / No Comments

Balancing needs to cut CO2 emissions and costs, engage with drivers and provide sustainability for the future will prove a tricky dilemma for fleets, according to Fleet Logistics UK and Ireland, which has set out a number of strategies to help resolve this.

Sue Branston, country head of Fleet Logistics UK and Ireland

Sue Branston, country head of Fleet Logistics UK and Ireland

Highlighting how “turbulent times” have brought a number of new issues into play to “further muddy the already murky UK fleet landscape” – including the outlawing of fossil fuel and hybrid vehicles in just 12-15 years’ time, the introduction of Clean Air Zones and problems from the introduction of WLTP, the Birmingham-based fleet management specialist is urging operators to review their fleet policies and supply chains, and to engage and consult with drivers to deliver robust strategies for the future.

According to country head Sue Branston, there are a number of routes companies could go down.

“These should include reviewing your choice of vehicle manufacturer to optimise your purchasing power, whilst appreciating that negotiating for a larger number of vehicles with fewer badges may allow you to negotiate additional volume discounts.

“However, you may also need to review whether fewer manufacturers can meet your future needs in terms of powertrain capabilities, particularly with regard to electric vehicles and, for the time being, hybrids.

“Any decision should always be based on the TCO of the fleet, rather than front-end prices, as a sensible starting point,” she said.

Branston said that fleets may also want to take this opportunity to review their preferred acquisition methods and approaches to funding in the light of the many alternatives available.

“Consideration should definitely be given to adopting a multi-bidding platform to introduce a competitive environment between different leasing companies. This is proven to consistently achieve the most efficient lease rentals on an on-going basis,” she added.

Branston went on: “As it is now certain that all our futures will be dominated by electric powertrains, stakeholders really need to ask themselves how and when their business will facilitate the change.

“With the launch of many new electric and hybrid vehicles in the UK market over the next two years, improved battery technology and range are a given, as vehicle manufacturers strive to meet the next round of emissions targets and beyond.

“A wider choice of affordable electric options with sufficient ranges and a reliable network of fast chargers will be essential for drivers if businesses are going to continue to function properly.

“Alongside this, parity of TCO costs with fossil fuel models is already there in many cases – and will improve if subsidised by the vehicle manufacturers and the Government,” she said.

However, Branston also urged fleets not to rule out RDE2-compliant diesels for high-mileage drivers and job-need drivers where necessary; all part of work to match driver profiles to correct powertrains, which could even see drivers attracted out of cash options and back into company cars.

Adjustments to contract terms and lifecycles of company vehicles could also be worth exploring as a “fast and painless way to cut fleet costs or provide flexibility while vehicle technology develops or the tax picture becomes clearer post-April 2023”.

Further considerations include reviewing fuel spend and mileages, which bring potential savings, and other areas such as licence checking, driver training solutions, mileage capture and storage and movement providers.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.