The Pandemic’s Impact on Fleets and the Potential Silver Lining

 

As Automotive Fleet celebrates its 60th anniversary, editor and publisher, Mike Antich developed a list of the top 60 ‘milestones’ in the fleet industry and he places the pandemic at the top. Mike writes, “I believe this ‘once-a-century’ calamity will stand the test of time as the most disruptive event in the history of fleet, at least to present.”1

Acceleration of Last-Mile Delivery Trend

Over the past year, the pandemic has wrought havoc on the fleet industry resulting in marked changes for both service delivery fleets and company car fleets. Stay at home orders and self-quarantining forced consumers to turn to rely heavily on e-commerce for all kinds of goods and services including groceries, appliances large and small, and personal care items. A recent statistic from Work Truck reveals online spending in January and February of 2021 increased by 34% compared to the same period last year.2

The increase demand for delivery of goods is accelerating the pre-covid fleet trend towards last-mile deliveries increasing the need for different types of vehicles. According to a case study highlighted by Commercial Fleet, a London based courier firm’s increase in demand from healthcare companies has led to an ever-increasing need for small vans as opposed to longer wheelbase vehicles.

Uncertain Future for Company Sales Fleets

While service and delivery fleets are contending with increased demands, the pandemic has had the opposite effect on sales fleets. Since in-person meetings have been almost prohibitive over the past year, companies have resorted to virtual meetings to make connections, develop relationships, and sell products and services.

The real question is whether the work from home trend will endure once all COVID-19 related restrictions are lifted. And the answer may lie in the way people feel about their newly established remote work conditions. A Forbes article dated May 2nd, 2021 cites a FlexJobs survey indicating that 65% of workers would like to remain remote post pandemic. Global Workplace Analytics estimates that “25-30% of the workforce will be working from home multiple days of the week by the end of 2021.” If the sales process adopts fully or in part virtual meetings as a replacement to in-person meetings, the company car model may no longer make financial sense.

The Utilization Analysis: Generating Cash through Resale

Perhaps one of these two trends have had a significant impact on your business. Now that we are over a year into the pandemic and almost out the other side, it is a good time to look at your fleet from a utilization standpoint. Using data from telematics, fuel, maintenance and accidents, you can pinpoint underutilized assets and make informed decisions about potentially selling these assets to generate cash.

There is a bright side for companies looking to cycle or sell vehicles. According to Consumer Reports, the used car market is ‘booming’ citing the US Bureau of Labor Statistics, “used car prices jumped 30% between May of 2020 and May of 2021.” Undoubtedly, now is a good time to sell used cars. The good news is that Donlen specializes in remarketing vehicles for an optimal return. And just recently we added a new remarketing option for our customers called RemarketingAdvantageTM. By purchasing your vehicles directly, you have cash in hand within a week and we assume most of the administration.

We know the pandemic has affected everyone. The surge in demand for last-mile delivery and the reduction in business miles for sales fleets are only two of the ways in which fleets have been impacted. Please contact us if you are interested in learning more about our utilization analysis and or our remarketing services.

 

 

 

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