Coming out of COVID-19, What’s Next for the Fleet Industry? | Utilimarc Fleet FYIs

Trends are always interesting to watch - coming out of a year past, perhaps seeing if your predictions were correct, so on, so forth. If you remember, not too long ago – I say not too long ago, it was actually pretty soon after season two of Fleet FYIs launched, I was able to sit down with Dave Meisel, virtually, to record a three-part mini-series.

And if you remember that series, you’ll know that he was speaking about trends to watch for in 2021 and onward. Today, we’re looking at some of the trends that Dave predicted we’d begin to see in 2021 and onward, as well as what we’re seeing is coming from what is hopefully the end of the pandemic.

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Show notes for this episode can be found at: https://www.utilimarc.com/blog/fleets-after-covid

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Transcript

Gretchen Reese (00:06):

Hey there. Welcome to Fleet FYIs, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week you'll hear from me and some of the industry's finest in candid conversations that will shed some light on not only two decades worth of data insights, but some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle.

Gretchen Reese (00:33):

But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us. But I've got a quick favor to ask you. Once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating, five stars I hope, or tell us what you liked, or leave us a comment or a question about what you've heard in today's episode.

Gretchen Reese (00:57):

But if we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later episode. If that sounds good to you, let's get back to the show.

Gretchen Reese (01:11):

Hi everyone, and welcome back to a new episode of the Fleet FYIs podcast. I hope you're all doing well. I know I said this last week but I just can't believe that it's already May. I mean, am I alone here? Right? Well, here in Minnesota, we're finally getting our first consistent run of nice weather of the season, and yes, I know that's a very clear indicator that I'm a strong Midwestern gal here. I love to chat about the weather. It's kind of a thing we do, but it's been sunny and soon to be 75 for multiple days in a row, all right? So let's just say, I'm a bit ecstatic.

Gretchen Reese (01:53):

But anyways, on to the topic for today because that's what you're really here for, right? Today, I wanted to dig into another trend episode, and trends are always interesting to watch, they're interesting to monitor coming out of the year past, perhaps, if you're seeing that your predictions were correct or perhaps incorrect, so on, so forth. And if you remember, not too long ago, I say not too long ago, it was actually pretty soon after the season two of Fleet FYIs premiered, I was able to sit down with Dave Miesel virtually to record a three-part mini series for the show, and if you remember that series, you'll know that he was speaking about trends to watch for in 2021, and moving onward.

Gretchen Reese (02:33):

And that's what we're going to do today. We're going to take a look back at some of these trends and see if what Dave predicted about what we'd see in 2021 and onward, as well as what's coming from, hopefully, what is the end of the pandemic, if that's coming true and if there's anything we can add to this. Because we're watching and we're monitoring trends and we want to see what's next and we want to see what's going to happen going forward. So if you're with me on this one, let's jump in because I think this is an episode that you're going to love.

Gretchen Reese (03:07):

So according to the World Health Organization, COVID-19, as I'm sure you've already known for the last year and a half, it officially reached pandemic status on March 11th, 2020, which, fun fact, I was actually in London at that time right before all of the pandemic craziness actually began. Fleet managers, since then, they've been introduced to new challenges thanks to the pandemic, from how to deal with stay-at-home orders and new cleanliness regulations to being short-staffed after workers self quarantine, or perhaps they're being forced to find new ways to get work done at home, which I think for all of us, and this isn't just applicable to the fleet industry, we're all kind of shifting to this work from home mindset. Because we've been doing it for the last year and a half, and for some, it's really strange.

Gretchen Reese (04:02):

I mean, me, personally, it really wasn't that much of an adjustment because I worked from home, or had the work from anywhere type of job before the pandemic. But now that you need to work at home, it's a little bit different, I'll admit. It feels different, as I'm sure most people are feeling as well. It feels a little different, we're missing the office, we're missing that coworker interaction, and it's a whole saga. But anyways, so for an industry, and we're back to fleet now, for an industry that relies on efficient movement and transportation, I think that COVID-19 is a bit of an encumbrance to say the least, and for better or for worse, the fleet industry's landscape is drastically different than it previously was. And I think I'm not just speaking for myself here, it hopefully is speaking for everybody. We're all eager to put this pandemic behind us.

Gretchen Reese (04:54):

But one thing I think is that it's very important to consider which new policies and perhaps which fleet management trends are here to stay and which are absolutely sure to change. Now, the question is, how has COVID-19 affected the fleet industry in the past? So we're talking early in the pandemic, early on, not in the last couple of months here. So if we go back to the beginning of the pandemic, the beginning of the pandemic was marked by a grounding of much of America's truck industry, and for trucking as a whole, it wasn't just in the US, this was worldwide and for multiple types of transportation, not just trucking. But for fleets, vehicles sat idly by sometimes in lots for several months before it came time to get back to work. And unfortunately, the process of shaking the rust off and getting back on the road wasn't as cut and dry as we thought, especially as a new compliance landscape had began to form and it was put in place during the partial shutdown all around the world.

Gretchen Reese (05:58):

And if fleet managers wanted to avoid the violations and the fines as sometimes some organizations were setting, as well as making sure that they're ensuring the safety and efficiency for their drivers and for their staff, they needed to make sure that they were following guidance on everything from remaining socially distanced during roadside assistance calls, to making sure the cab was sanitized and wearing PPE or personal protective gear or equipment.

Gretchen Reese (06:24):

So following these steps, it was necessary to stay safe, but it proved to be very expensive for a lot of organizations, whether it was the cost of the extra equipment and the cleaning materials, or perhaps the fines if all organization members didn't follow the regulations put in place, and I think it gets especially sticky, or at least it did when companies' budgets were under strain. For example, if margins are already thin, you've not had as much work and then you have the added uncertainty with insurance and licensing and taxes. And if you have employees that are worrying about getting sick, if they do get sick, that could make insurance costs rise. There was a whole lot circling around in people's minds that definitely created this sense of worry.

Gretchen Reese (07:07):

And to make matters worse, a halt of production by original equipment manufacturers, so OEMs, they led to a shortage of vehicles and parts, which we're actually still seeing a little bit of the aftershock of that right now, just because coming out of a bit of a pandemic, getting that restart and that re-zhuzh, so to say, it's going to take a little bit of time. It's not going to be tomorrow, everything starts back up, everything goes back to normality. As much as I would love to say that I so wish that would be the case, it's not unfortunately. But anyways, moving on, even if you were lucky to get your new vehicles, sometimes vehicle or vehicles, it was actually pretty difficult to get them registered because they had quite a few people speaking that all of the DMV offices were closed or operating on an appointment only basis, which for people that were used to being able to walk up and say, "I need to register my new vehicle," it made it a little bit more difficult.

Gretchen Reese (08:17):

But if we're looking at how the pandemic is starting to change us, changing our organizations and change our policies, we need to ask the question of what are some of these new policies coming out of the pandemic? Because this whole side of the trends conversation, it's not just about how the pandemic effected us in the beginning. It's how it's either still affecting us or how we're perceiving it to affect us in the future. And I will say one thing, if the pandemic did anything, I think it made fleet professionals really take a hard look at their sanitization policies that are already in place, and which of their current policies needed improvement?

Gretchen Reese (08:56):

For example, the new policies that now reflect the realities of living through a pandemic, like for the fleet managers whose job it was to establish such procedures, they needed to lower potential infections between drivers and also the people they interact with, not just for the safety of their employees, but for customers as well. And finding this new sanitation ritual, so to say, making sure there's only one person in the cab, or even giving each vehicle a thorough cleaning, it takes time, it takes resources and takes a little bit of adjusting to, especially if you didn't already do it previously.

Gretchen Reese (09:32):

One thing I will say actually, funny little tidbit for you. Before the pandemic, whenever I went on an airplane, I could probably count the amount of people on one hand that had just a packet of wet wipes or sanitizing towelettes and hand sanitizer on the plane and would wipe off the tray tables. And if you were on a plane with a screen, they would wipe off the movie screen and the arm rests. And people would always look at me a little bit funny, but now, I'm actually pretty happy that now it's the cool thing to do because, at least for me, I just am petrified of being ill. I do not like it at all. I just don't like it.

Gretchen Reese (10:13):

And now, just to see more people embracing that, for me, it's nice because then I'm more rest assured that less people will be ill on the plane so then it lessens your own chance. But just this overabundance of cleaning rituals, it's different but it's nice to see.

Gretchen Reese (10:30):

Now getting back on that note, most drivers, when we're looking at the fleet industry as a whole, they share their vehicles. Perhaps it's not two at the same time, or if it is, maybe they're both commuting to the same job site. But a lot of times, it's multiple drivers in one vehicle, especially if there's first, second and third shifts in the rotation here.

Gretchen Reese (10:51):

But now, what we're seeing more than ever, the cleanliness standards have to be in place and fleets also need to find a way to ensure that they're being met in between shifts. So it can't just be the first time it's being used during the day is when it cleans. It actually has to be at the end of every shift or sometimes even multiple times a shift. And this will mean that expenditures, likely they'll increase as the cost of sanitizing a vehicle can range anywhere from 50 to 200 US dollars, and that can obviously vary between place to place and then also where you are in the world, not just the US. And there's also the cost of personal protective equipment for the people sanitizing each vehicle within an organization's fleet, which can be a little bit of a challenge.

Gretchen Reese (11:37):

Another aspect that fleets definitely had to consider when it comes to coming out of the pandemic and some of the trends that we're seeing that was taking us right through the middle of it was reducing contact between people or the term social distancing, as I'm sure we're all aware of now. And even if it's temporary, it's crucial for fleets then, and perhaps maybe not as much now, just as people are starting to get vaccinated more and some of the rules from the FDA and from the CDC are changing, which if you didn't know, today in the US, they did release for the CDC that it is no longer recommended to wear a mask at all times if you're fully vaccinated, which is good news depending on how you feel about vaccines and masking.

Gretchen Reese (12:20):

But anyways, to keep on with social distancing regulations, the number of people in cabs, it was restricted and in that sense, it might have proved difficult for managers sorting out the logistics of getting personnel, where they needed to be and when they needed to be there. Because previously, when you could carpool, it was great, it was efficient, and it allowed you to take only one vehicle. But instead, this time, you might be sending two or three vehicles that is. But lucky for us, or I should say as lucky as lucky as we can be, it's easier now than ever to work from home, which is a blessing in many respects, and working and communicating online is also easier than ever. And one thing we've been noticing is that now, more fleets are pivoting to positions that can do a work from home environment, or perhaps they're having these take-home vehicles, and it just changes the game a little bit.

Gretchen Reese (13:13):

So it means less time on the road for some, perhaps more time in front of the computer, which can cut back on fuel costs and potential safety incidents. There's a whole wide array of things that can happen from this but those are just a few that we're noticing. And another thing we've been seeing, and this is another facet of this whole work from home piece, but this is a time truly for implementing and communicating new standards. It's also as well an opportunity to create some lasting change, whether it's with updated sanitization policies, like we've been talking about, or even an operational strategy when it comes to sustainability and how you can future-proof your fleet for any crises in the future, which hopefully there will not be any more on this scale. But perhaps you could consider rightsizing your fleet. That's one thing that obviously a lot of people are looking at with tight budgets.

Gretchen Reese (14:04):

Like I said, whether it's from trying to increase sanitation measures and that stretches your margins a little bit further than you'd like. Right sizing your fleet could be a way to release some of the pressure there, or even taking a look at some of your fleet's operations and doing a benchmark on them. Perhaps the benchmark is on safety standards for, again, cleaning for making sure that you have one person per cab. It can completely vary from fleet to fleet, and obviously, when it comes to safety, being able to benchmark how you're doing year over year is a really great tactic. And one thing that, actually, we've noticed a lot of people coming out of this, and this is not a pitch for saying, "Oh, you should absolutely right-size your fleet tomorrow or benchmark year fleet's operations tomorrow." Obviously, there's a lot of time and research that needs to go into that to make sure that's what's right for your fleet right now.

Gretchen Reese (14:59):

But one thing that fleets that were doing that throughout this pandemic, in the heat of it and then right at the beginning, one thing they were able to do was identify spare vehicles that could work in rotation as needed, or potentially, they could dispose of underutilized equipment to make that little bit of extra room within their capital allocated budget. So there's a couple of benefits there, and one thing that you know always, Utilimarc analysts are very happy to speak to you about just because that does fall under our wheelhouse. And absolutely, if you ever felt like you wanted a demo, you can always head to our site, which is Utilimarc.com/live-demo and you'd be able to find all the information on benchmarking services or even just custom right-sizing projects there.

Gretchen Reese (15:55):

But now, one thing that I would really like to talk about is the emerging trends coming out of the last year, and this is that tie in to the Dave Miesel episode that I was telling you about in the beginning. One of the interesting things that have come out of the last year, like I said, there are trends that we can look forward to in 2021 and then moving even further forward. And like I said, if you've listened previously to the three-part mini series that I sat down with Dave for, he's from Quanta Services, for those of you that don't know who he is, some of these trends, they might sound a little bit familiar because in fact, he did cover them in his episode that we had sat down for. It's, I believe, the second episode in that three-part mini series.

Gretchen Reese (16:39):

However, if you haven't already had a chance to listen to that, make sure firstly you add the episodes to your queue once you're done listening to this one, because I promise, you're really going to like what he has to say. He's a fascinating guy and there's even a cheeky bit on electrification thrown in there too, because we all know that it wouldn't properly be an episode of Fleet FYIs without a little dose of sustainability somewhere. But the one thing about the trends that Dave was speaking about, I'll go over them a little bit in detail just so you can understand where he was coming from when he was predicting these, but then also see where we're going when it comes to being able to monitor these trends for the future. So let's get on with it.

Gretchen Reese (17:16):

So getting on with the trends that have begun to emerge over the last year, there's been quite a few that have properly begun to stick out, at least for me when I've been looking at them. For example, you have a lot of manufacturers looking towards electrifying their offerings. One that may pull your attention was GM when they promised to fully electrify all of their light duty offerings by 2035 and go completely carbon neutral by 2040, exciting news on that front. And when you look at the amount of major manufacturers that are now talking about changing from gasoline and diesel to electricity, it's not just the startup companies anymore. It's not the smaller ones. It's actually now really big companies like the General Motors like I said. It could be someone like Nissan, like Ford, like Rivian, and it's no longer just compact cars and sedans either, like your Prius or just smaller cars that you could zip around in a city.

Gretchen Reese (18:07):

Instead, we're talking about pickup trucks, we're talking about SUV's and big work trucks that could be used for utilities and other similar fleets as well, whether it's construction or something similar. And the interesting piece about this is that the product line width is scaling quickly, and so is the number of manufacturers that are currently looking at electrification. Personally, I find this a bit fascinating because as we're expecting electrification to speed up, I don't see it slowing down, I actually see more manufacturers jumping on the trend, especially as they see that there is indeed a market for it, and it's not just fleets that are demanding it, but it's also consumer driven as well. So there's a couple of different aspects to that one.

Gretchen Reese (18:46):

And I definitely agree with the way that Dave phrased it in our first episode because I think that it's going to change the way that we do business, and Dave is of the same mind. And we're talking about electrification here because it splits a bit at that term. So there's a couple components to this argument. First, there's the charging infrastructure component, and that's absolutely going to change the way that we all live, the way we all do business, mainly because companies are going to need to look at how they fuel their assets differently. And one downside actually to electric vehicles is that you can't simply fuel and go in three or less minutes like you can do an internal combustion engine vehicle, which if you have a little bit of impatience at the pump like I do, because let's be honest, in Minnesota when it is negative 30 degrees with a wind chill, the last thing I want to be doing is standing outside at a fuel pump waiting for my car to fill up with gas.

Gretchen Reese (19:39):

And granted, you can probably wait in your car, similar to like you could an internal combustion as your car is charging, but the point is that it could take much longer, sometimes even up to 10 times as long. And as Dave put it in an earlier episode, he said having your refueling take three minutes, that doesn't sound like much but think about it this way. If you're third in line at the fueling station, you have to wait now an hour before you can recharge your car, correct? Because to get an 80% charge on most of them, even fast charging, it's about 20 minutes, and I don't think we've factored in that yet and what it's going to look like. And the idea that you can charge at home is fantastic, but most homes can't charge one of the longer range batteries, even in 24 hours. The houses that we live in just don't put out enough electricity to charge the battery.

Gretchen Reese (20:34):

Now, granted, he was speaking in that sense when it comes to the electrical grid output and making sure that we need to figure out a way to be able to offset the weight on the electric grid, whether we're looking at solar power or wind power or hydro power, there's many ways to do it but we also have to keep in mind that houses weren't initially built to charge electric cars. And if we now suddenly are expanding to a massive push for electrification, for fleets and for consumers, the weight on that electric grid will change a bit, and it's going to be something that we need to monitor.

Gretchen Reese (21:08):

But on the flip side of being an exciting aspect of innovative technology, because that in itself, it's fascinating, but it'll be interesting to see the challenge area that still exists in this area too. Because according to Dave, absolutely every manufacturer he works with almost every day, they're all working on electrification all across the entire spectrum of their vehicle offerings. And he actually doesn't think we've began to see all of the types and the width of equipment that's going to be electrified over the next several years, if you can believe it. And I think that's going to be amazing to see.

Gretchen Reese (21:43):

And the second part of this whole electrification, I don't know if you want to call it an argument, but it's definitely a movement. Like I said, it splits so you have infrastructure being one, or sorry, the charge time being one, but then you also have the infrastructure itself. So this isn't as prevalent as electrification, the push for all of these new offerings, but it's not far behind. It's the carried infrastructure component and installing said infrastructure for a charging network, and making sure that you're getting a density that you need for, if you have your redundancy aspect of changing the ability to do our business in ways we don't understand yet. But the infrastructure installation process is absolutely necessary because if you take a look at... I was speaking to a LinkedIn connection of mine that was saying that in the UK, and I may have misquoted him on this one, but I believe he said, you are never more than 34 miles away from a charge point at all in the UK anymore, which is phenomenally impressive.

Gretchen Reese (22:49):

But the US does have a long way to go before they get to that point, and it does instill a bit of range anxiety when you look at how we can actually make the most use out of this technology. And having the strong charging network, that would actually ease a lot of people's fears when it comes to transitioning to a new technology. And also, like I said, it's going to change your business in ways that I don't think we understand as a whole, whether it's from the micro level or the macro level. Because electrification for the most part, it doesn't change our business overall if we're looking big picture here in ways we don't understand perhaps. Or I should say the changes aren't what we don't understand, because it changes in ways that we may understand in terms of the way we feel. It changes our sustainability and we can wrap our heads around why the movement exists, but the way that we don't understand yet, because I have said that sometimes I feel like this electrification movement will change businesses in ways we don't understand.

Gretchen Reese (23:51):

It's the idea that equipment can work without somebody. That might be a little bit harder to wrap our heads around, and having the, you could call it self-driving technology, you could call it self operating, whatever it is. A lot of that has to do with infrastructure and the ability to withstand that. Having that split, it'll be interesting to monitor and see how it actually affects business as we know it. Because the two aspects of this electrification movement, they're coming. They're going to be a bit disruptive, whether that be in a good or a bad way, still up in the air on that one. But the question is, at least my question is, how disruptive is it going to be? And how do we respond to that? And I think that's going to be the interesting part to monitor, the interesting part to see.

Gretchen Reese (24:37):

And actually, a bit of a funny point that when Dave and I were previously talking about this topic, he was saying that the most disruptive thing we've had when it comes to transportation and the transportation industry ever in history, that's most similar to an internal combustion engine going to a battery powered engine, is from when we switched from a horse to a car. Because that's the last time the entire... I want to say, what did he call it? The entire mechanical system overhaul happened, because obviously, a horse is an animal and you have a four wheeled carriage that went along with it or a four wheeled buggy, and then you switched to a motorized car.

Gretchen Reese (25:16):

Now, you're switching from a motorized car with thousands of moving parts to now, a battery and you have your motor. So it's much less moving parts overall. I'm not going to say there's only two because I know that would be incorrect. However, there's much less moving parts in an EV than there is in an internal combustion engine. So it'll be interesting to see the overhaul and it'll be interesting to see the disruption that that might cause, whether for good or for bad, but I guess we won't know until we can say that hindsight is 2020, because it always is and we can always see where we went wrong or went right.

Gretchen Reese (26:01):

But what I'm sure you're all probably looking forward to the most is what in the heck can fleet managers look forward to once COVID is in the rear view? Which I don't know about you, but I am so excited for that to happen. Oh, I'm giddy thinking about it. Anyways, one of the upsides of getting through 2020 and the former half of 2021 is that a lot of groundwork has been laid for meaningful changes throughout the industry, which is phenomenal to see. Vaccine distribution has been ramping up faster and faster each day, and many are wondering if all the new policies are going to be let go or if they're going to stay. I think it's unlikely that some of these policies are actually going to leave entirely. With or without COVID, the new sanitation policies, in my opinion, are good for the overall health of the drivers.

Gretchen Reese (26:45):

Maybe they don't need to be as extreme, but more sanitization is never a bad thing. And even if organizations don't keep all of them in place, still, it'll mean a healthier, cleaner workplace for all positions involved. On the flip side, for organizations that won't return fully to in-person work, working remotely is here to stay. I think we're all seeing that as companies are starting to give up some of their office spaces and they're realizing that perhaps, "Oh, hey, could this meeting be an email?" or "Could this meeting be a zoom call?" There's a lot of things that, I think we're all experiencing Zoom fatigue, and just overall video conference fatigue. I guess you could probably blanket term it that. However, having that remote working option available, you're going to have a lot more employees and employers looking for people that are willing to do that.

Gretchen Reese (27:36):

Especially as a younger generation of drivers and administrative employees that are used to this digital space, they're taking the wheel now. And the benefits of safely working from home, they're self-explanatory and they'll encourage the adoption of digital technology and telematics strategies to manage the drivers. However, one thing I think we can all just completely relate to is the fact that some of us just need a better work from home set up. So I spoke to a friend of mine the other day who said she's been working from an ironing board for most of COVID, just because it's adjustable and she can use it as a standing desk or a sitting desk. And she was telling me, literally the one reason she is so excited to get back into the office is so she can work from an actual desk that doesn't have a padded top anymore. But I digress.

Gretchen Reese (28:24):

The fleet industry, it'll continue to evolve long after COVID is in our rear view mirror, which hopefully will be very soon. And the key aspect of this conversation though, is how it'll happen. And that's something that here at Utilimarc, we're going to continue to monitor as time goes on. And of course, you'll be kept in the loop because that's just what we do, we like to help people out and also, we like to share trends that we're seeing as well.

Gretchen Reese (29:02):

But anyways, that's all for me this week on the Fleet FYIs podcast. I'd love to know, have you seen any trends or have you been monitoring any trends different to those that I've mentioned in this episode that you'd like to share? If so, look us up on LinkedIn and use the hashtag Utilimarc Fleet FYIs. That's where you'll find us, and we can take a peak at any of the trends that you've been seeing or that you'd like for us to take a look at as well. Or if you simply fancy leaving us a bit of feedback on today's show, that's always good as well. But as always, you know where to find us, but just in case you don't, Fleet FYIs is available on all of your favorite podcasting platforms and I will be back in your headphones next Thursday with a fresh new episode. Ciao.

Gretchen Reese (29:46):

Hey there, I think this is the time that I should cue the virtual high five because you've just finished listening to another episode of the Fleet FYIs podcast. If you're already wanting more content, head over to Utilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C.com for the show notes and extra insights coming straight from our analysts to you. That's all from me this week so until next time, I'll catch you later.