Fleet management in 2022 – prepare to innovate

As 2021 comes to an end and 2022 rolls in, it feels a little like déjà vu. Here we are, in the grip of a global pandemic, facing chronic uncertainty as to whether our plans for the season can go ahead, let alone the impact it could have on business. This feels like it did 12 months ago but has come just as we were beginning to craft our “new normal”.

By Alison Pittaway, Desk Editor, Fleet Europe (pictured)

But at least this time we have the benefit of hindsight. We got through this last year, so we can strive to do so again - but better prepared.

As for fleet management in 2022, I see more of the same; dealing with the pandemic - Omicron and any other variants this unrelenting virus throws at us, which of course means dealing with the economic uncertainty and changes to working practices that go with it.

The need for collaboration continues

On the other hand, our industry continues to grow and develop in line with new market opportunities, customer demands, innovations and technological developments. And we will continue to “build back better”, not despite this persistent virus but perhaps because of it. Coronavirus has forced us to collaborate, transform, reorganise and care for ourselves and each other, which is never a bad thing.

Fleet management, per se, will continue to involve the supply chain struggles we’ve experienced as a result of the pandemic. This includes semiconductor chip shortages, other supply deficits (as a result of the pandemic) and Brexit (in the UK). New vehicles will continue to be in short supply, as will parts for older vehicles that fleet managers have decided to keep in service. Together, these issues may result in increased vehicle downtime and lost business.

Fleet costs will continue to rise

In addition to higher SMR costs, fleet costs will continue to rise as vehicle procurement, fuel costs and inflation increase. Much of this rise will be out of the fleet manager’s control, such as the retail cost of fuel and higher prices due to increased demand for vehicles and vehicle parts.

Pent up demand will continue to put pressure on vehicle production and availability, particularly with popular models and fleet managers will have to order vehicles earlier.

The transition to EV fleets will, I believe, accelerate in 2022 as increasingly more models are introduced by OEMs, which may result in retail costs lowering. This could be offset, however, by the ending in many countries of electric vehicle subsidies, although tax breaks will remain. There is pent up demand there and early adopters want more EVs. Many businesses have publicly committed to low or zero emission targets by 2030 (or sooner), which will also influence their choice of vehicle.

Innovation in tyres

Tyre costs may also continue to rise, particularly as electrification among fleets gathers pace. It’s well-known that electric vehicles wear tyres faster than ICEs. Some of the larger tyre companies, like Goodyear and Bridgestone, have introduced products specifically for EVs, but they’re currently more expensive than standard car tyres. In 2021, tyre prices rose by 3-10% because of higher commodity costs. These two phenomenon together will mean higher costs for fleet managers.

Overall, fleet costs fell in 2020 and 2021 but it was because of the pandemic, which resulted in a reduction in fleet activity. Higher inflation, tightening budgets, pressure to resize the fleet and cut costs – all while maintaining the same (or even higher) operational levels of business, mean fleet managers in 2022 face unprecedented challenges.

Driver safety will continue to be a concern, which the focus on data, driver monitoring, training and in-cab technology will help to address. Opportunities, including electrification, streamlining through technology and yielding benefits from data insights will all continue evolving in 2022, as will the roll of the fleet manager, which is somewhat of a hackneyed statement but just as true as it ever was.

Image of innovation concept, courtesy of Shutterstock

Authored by: Alison Pittaway