Fleet management professionals are facing logistical, financial, and market challenges that were not present just a few years ago. Some of these challenges are actually the result of new business opportunities and efforts to make the industry more efficient, while others are related to fluctuations in the marketplace.
As a result, fleet managers are charged to better understand the current landscape and consider new strategies in order to gain a competitive advantage. Many of these strategies involve the deployment of Internet of Things (IoT) solutions, and we will take a closer look at that side of the equation in Part II of this series. But for now, let us examine the five trends that are creating new challenges for the fleet industry.
- Online shopping: E-commerce sales are booming, growing between 20-25% each year. While this rapid growth increases potential revenue for delivery businesses, it is also tightening trucking capacity, elevating the importance of final-mile delivery processes, and creating a demand for more precise pick-up and delivery times. In addition, e-commerce is changing shipping strategies from large volume and low frequency shipments to low volume and high frequency shipments, especially during the holiday season.
- Driver shortage: Fueled by online shopping delivery and a surging economy, the current nationwide driver shortage accelerated in 2017, and it is expected to grow more severe in the coming years. Recently Road Haulage Association (RHA) chief executive Richard Burnett said, “The UK haulage industry is currently facing a shortage of between 45k and 50k HGV drivers and we as an industry need to face this challenge head-on”1.
- Driver safety and productivity: Improving driver safety is required by some government regulations. The introduction of the Driver Certificate of Professional Competence (Driver CPC) has meant experienced drivers are required to take extra training. For the aging population of drivers, this has been seen as step too far, who have chosen to retire rather than complete the Drivers CPC. Many other countries have already implemented a similar regulation or are planning to in the coming years. No one would argue that increased safety and productivity is a good thing, providing benefits beyond regulatory compliance.
- Fuel price volatility: Fuel costs can be affected by natural disasters that close refineries, oil surpluses and shortages, as well as political forces. Fleet managers are exploring technology-based route optimisation and driver management solutions to maximise efficiencies, helping to curb costs, regardless of market fluctuations.
- Brexit: The departure of the United Kingdom from the European Union is throwing uncertainly across all sectors of business and how they will operate cross border. “The Brexit effect on the exchange rate has resulted in some Eastern European HGV drivers returning to their homelands. Operators have been reassuring drivers that there is a future working in the UK. With this, more certainty of residential rights, and an improved exchange rate, we are confident that the drift back home will reduce.” said RHA chief executive Richard Burnett.
In Part II, we will address how IoT is helping the fleet industry overcome these challenges. Learn more about how fleet managers can more easily implement, maintain and support IoT deployments by downloading the KORE eBook, “The Fleet Manager’s Guide to the Internet of Things.”
1. https://www.rha.uk.net/news/press-releases/2017-12-december/driver-shortage-rha-sets-the-record-straight
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