Companies operating vehicle fleets face delays of more than a year for certain new car and van models due to the global semiconductor shortage.
The chips help to control infotainment systems, as well as power steering and brake sensors, and the current situation has caused manufacturers to suffer setbacks in production.
Daimler CEO Ola Kallenius said the auto industry could continue to struggle throughout next year and into 2023.
As the backlog grows, companies face the prospect of ageing fleets, rising maintenance costs, vehicles being out of warranty, MOTs becoming due, increased wear and tear, and a growing expense bill due to tyres and other fast fit items – all of which also increases vehicle downtime.
According to Andy Reed, commercial director of Interactive Fleet Management, the Grosvenor Group’s specialist fleet management business, the situation is causing some companies to reconsider whether they have the time, know-how and expertise to manage these volatile and rising costs. As a result, outsourced fleet management is a key growth area as businesses look at the benefits of a specialist fleet management provider for support.
“Delays in vehicle supply have become a real headache for companies operating fleets,” said Andy, “This isn’t just down to the fact that they can’t get replacement vehicles, it’s also because they’re now managing a fleet that’s growing older than they had budgeted for.
“That extra, unexpected, year of cars and vans being on fleet certainly brings with it some challenges, with vehicles coming out of their manufacturer warranty period, MOTs being due for the first time and the general cost of servicing, repair, tyres and fast fit items rising.
“It’s very rare, of course, for companies to have the specialist technical vehicle expertise in-house to be able to manage these costs, which raises the question as to whether now is a good time to outsource the management of the vehicles, drivers, suppliers and all associated costs.”
Part of the Grosvenor Group, the UK’s largest privately-owned contract hire and fleet management specialist, Interactive Fleet Management purely focuses on the management of company cars and light commercial vehicles.
Whether companies own their vehicles, or contract hire them, Interactive Fleet Management is best described as an outsourced fleet department – managing a company’s entire fleet operation or certain aspects of it, for example maintenance management.
“For a fee per vehicle per month, it is simple to transfer the management of vehicles, drivers and suppliers to Interactive Fleet Management, tapping into our experience and expertise with immediate effect,” continued Andy.
“Very few companies employ someone with vehicle maintenance expertise but are signing off invoices for work carried out on their company vehicles, unsure as to whether the costs are fair, or whether the work was required in the first place.
“That control of maintenance expenditure tends to be the main focus for choosing a fleet management solution, and if we’re shown a selection of recent invoices from garages we can see immediately where companies are being overcharged, where warranties are not being applied, where a job has taken too long (therefore attracting an inflated labour cost) and where discount could have been used.
“But there’s a lot more to fleet management than simply the maintenance.
“By placing the entire fleet operation in the safe hands of our experts brings with it robust processes and controls, the use of our award-winning OSCAR365 fleet management system, which we developed in-house using our own full time software team, an Interactive Fleet Management App which simplifies life for drivers, and a complete end-to-end process from vehicle ordering, in-life management through to disposal.
“All of this is underpinned by our multi-award winning 0Zone solution, which helps companies transition their fleet seamlessly to ultra-low emission and electric vehicles.”
According to Andy, a common concern cited by companies when looking to outsource their fleet management is whether they will lose control of such an important function within the business.
Yet Andy explains that once companies have made the switch, they rarely return to managing the fleet in-house.
“Outsourcing can feel like a big decision, however I can’t recall a single customer that has taken the function back in-house after seeing how well it works” said Andy.
“Nowadays, in particular, with home and remote working being the new norm, you can meet online at a moment’s notice, advancements in technology mean you can create virtual teams throughout a business, whether they are internal or external, and the whole business dynamic means that our fleet management teams can seamlessly integrate into a customer’s internal teams, even when they’re not in the same building.
“To a company’s drivers, suppliers and management, the service may as well be offered from within their own premises, because all telephone calls, emails and documentation can be in the company’s name and we have occasions when drivers do not even realise that we are a separate fleet management specialist operating in partnership with their employers.”
Lee also argues that outsourcing delivers heightened levels of management control, and helps with other aspects of fleet management too, such as grey fleet drivers and overall duty of care.
“Where we provide an outsourced fleet management solution to clients, it gives their fleet manager far more time to work with us strategically because we are removing the day-to-day driver and vehicle management that many in-house fleet departments get so bogged down in.
“This leads to better strategic thinking for both the company and grey fleet, the ability to look properly at on-going improvements to the fleet operation and to drive down costs whilst improving the services to drivers. With so many challenges facing fleets in the coming years, including the switch to electric, changing attitudes towards business mobility as a whole, and ever-tightening legislation surrounding driving at work, it’s a really important time to have a first class team by your side and to have time to plan your future mobility strategies rather than be worrying if a vehicle needs a service or MOT.
“For all of our customers, as well as the day to day fleet and maintenance management support, we have a panel of experts just a phone call away for advice on taxation, CO2, health and safety, fuel, electric vehicles, car choice lists and a single point of contact for updates on manufacturer availability and vehicle supply.”