Rising costs driving fleet management: survey

Rising costs driving fleet management.

A new survey of more than 1,800 global fleet operators has revealed the foremost challenges today facing businesses in the industry.

The survey conducted by telematics company, Teletrac Navman, confirmed that rising fuel costs (39 per cent), disruption due to the impact of COVID-19 (32 per cent), and supply chain pressure (31 per cent), remained the biggest obstacles for transport companies worldwide.

“The past 12 months have created new complexities for fleets, but fuel cost rises are the number one concern for operators globally,” said Alain Samaha, President and CEO of Teletrac Navman.

“As the cost per gallon of fuel spiked throughout last year, many operators looked to overcome the rising costs with driver behaviour programs and EV transition plans,” he said.

As rising fuel costs and the global response to reducing carbon emissions continued to build, fuel conversion (23 per cent) remained a key challenge with EV supply, alongside purchase price and charging infrastructure concerns.

A third (32 per cent) of respondents said that the conversion to next generation fuels is one of their largest areas of expense (second to purchasing new vehicles).

Conversion is also high on the agenda for fleet owners due to concerns about their environmental impact.

More than a third (41 per cent) of those surveyed said environmental impact was their biggest concern.

Outside of transitioning to next generation fuels – of which 30 per cent were looking to transition to EVs in the next 12 months – maintenance of existing fleet continued to be the largest expense for 39 per cent of those surveyed.

“With supply chain issues continuing to impact EV vehicle availability and cost, some fleets are struggling to start the transition and are having to find ways to safely extend vehicle life through preventative maintenance and more conscientious use on the road,” said Mayank Sharma, Head of Global Product Management & UX.

“However, those with the available Capex to be early movers to EVs could gain a competitive advantage as they won’t be exposed to any further rising petrol or diesel costs, they’ll be reducing their environmental impact which is coming more into play in customer contracts, and will likely benefit from government grants and subsidies that will later be removed,” he said.

Over the course of 2023, fleets are looking to make investment in expanding their offering through technological integrations (48 per cent), while also using technology to aid compliance (39 per cent).

Improving customer experience (39 per cent) and recruiting and retaining drivers (31 per cent) were also high on the list of planned investment for the next 12 months.

As with the start of any new year, the market experiences emerging opportunities and technologies that will benefit fleets.

In terms of emerging technologies, fleets are focusing on implementing more digital workflows (39 per cent) and video telematics (38 per cent), as they seek to increase efficiency and manage the top three fleet business costs (fuel, payroll, and maintenance).

On the technology front, nearly all (98 per cent) respondents said they were using either a sourced or manufacturer-provided telematics solution across their fleet.

While vehicle tracking (43 per cent) was understandably the number one reason for utilising telematics, managing driver performance (33 per cent) was the next priority, followed by using it for proof of service/job completion (32 per cent), and of course monitoring fuel usage (30 per cent) in tough economic conditions.

Regarding driver performance, improved driver safety (37 per cent) was the biggest benefit of using telematics, with nearly a quarter (24 per cent) stating it helped prevent fatigue on the road.

Moreover, 89 per cent of those surveyed used telematics to benchmark behaviour, with 91 per cent also seeing a reduction in accidents and 24 per cent implementing new driver behaviour to help navigate the high fuel costs.

While 31 per cent of global fleets were concerned about increasing wage demands in a cost-of-living crisis, 37 per cent are using benchmarking to provide performance-based bonuses in a bid to retain drivers.

“Driver performance benchmarking is a great method of inspiring drivers to perform better and safer on the road,” added Sharma.

“With the growth in mobile applications it has never been easier for drivers to see how they are performing against targets and peers. In fact, 40 per cent of our respondents say that implementing telematics has helped to build a safe driving culture within their organisations.”

Increasingly strained fleets have been turning to smart technology in order to maintain productivity while putting driver safety first.

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