7 Ways Fleet Management Has Been Impacted By COVID-19

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The outbreak of COVID-19 resulted in manufacturing freezes, supply chain delays, changing consumer demands, and a shift to remote working.

It’s no surprise that these factors had a significant impact on fleet management. Here are 7 ways the industry has been impacted by the pandemic.

1. Short-term cost savings

The outbreak of COVID-19 and subsequent shift to remote working saw a rapid decline in the use of some kinds of fleets. As a result, fleet managers enjoyed savings in several areas including insurance premiums, crash damage and repairs, parking, and vehicle servicing and maintenance.

2. Increased mileage for delivery vehicles

One of the few industries that has thrived during the pandemic is eCommerce. According to the Australia Post’s eCommerce Industry Report, 5.2 million households shopped online in April 2020 – a year-on-year increase of 31%. By July 2020, eCommerce accounted for 14% of Australia’s retail sales.

Supply chain and last-mile delivery vehicles have provided an essential service in recent months. Drivers have travelled further and worked harder to meet the shift in consumer demand and keep supermarkets well stocked throughout the pandemic. As a result, many fleet managers have adopted additional safety standards and reviewed their operations to protect the best interests of their drivers.

3. Companies are opting to extend vehicle contracts

Amidst all the pandemic-related uncertainty and increased lead times for acquiring vehicles, several companies have opted to extend leases and even allowed vehicles to exceed their maximum service dates.

4. Money is being wasted on unused parking spaces

Because the demand for parking spaces has hugely declined, many fleet managers have found it difficult to re-sell their unused parking spaces in commercial parking lots.

5. Ridesharing is less feasible

Fleet managers often make savings or increase operational efficiency via vehicle pooling and ridesharing. But this is more difficult in a post-COVID world, where hygiene standards are more rigorous and employees are less inclined to share a car with other passengers.

Fleet managers must carefully consider their sanitisation practices and the measures necessary to protect their staff.

6. Insurance costs are rapidly changing

Insuring company vehicles becomes more complex as driver behaviour shifts. If employees are in lockdown or working remotely, their personal mileage increases while business mileage decreases. Fleet managers need to keep track of whether or not their corporate policies cover major changes in vehicle usage.

Insurance policies must also be reviewed in relation to ride-sharing and car-pooling.

7. Crash and fatality rates have increased

Although the number of vehicles on the road significantly declined following the outbreak of COVID-19, this has not made the roads any safer. In the U.S., crash and fatality rates have increased, perhaps as a result of riskier driver behaviour.

As fleet managers get their vehicles and drivers back onto the roads, they’ll need to do some forward planning to evaluate their driver pool, audit tools and technologies, reassess vehicle maintenance programmes, and consider how best to adapt to changing consumer behaviour and business operations.

PASA Fleet Day

On 22nd July, PASA is hosting a virtual Fleet Day event to address the rollercoaster of fleet management during the pandemic

Click here for more information on the 2021 PASA Conference schedule and to register for upcoming events.

About Author

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PASA (Procurement and Supply Australasia) is the leading provider of information, education and networking opportunities to procurement professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, training, awards and PASA CONNECT membership network. PASA is a trading name of BTTB Marketing Pty Ltd. BTTB Marketing has operated under the BTTB, CIPSA Conferences and PASA names for over twenty years. https://procurementandsupply.com/

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