Summer and fall are busy times in the fleet industry. There are many fleet meetings and new-model introductions, which provides me with an opportunity to talk “fleet” with a wide variety of fleet managers. At these meetings, I am always impressed by the caliber of public sector fleet managers and the challenges they face. Each year, fleet managers struggle to do more with less money. Higher inflationary costs for fuel, labor hours, sublet repairs, and vehicles are impacting many cash-poor fleet operations. To meet these goals, fleet managers are directed to cut costs while maintaining the same level of service. In addition, regulatory requirements add cost to the fleet operation. Government fleets are often the guinea pigs for new regulations despite the cost and implementation challenges. These regulations are often counter-productive to cost-cutting initiatives.
At budget time, fleet managers are constantly fighting the “just one more year” battle. There is never enough money, and fleet managers continually must fight for every dollar. Often, vehicle replacement is deferred for “just one more year.” Vehicles are becoming more expensive. One example is police units. The cost to outfit a police car has risen dramatically. A police vehicle can cost more than $40,000 by the time a computer, radio, radar, and video are added. In some cases, department users do not return vehicles due to the “sticker shock” of newer vehicles, which, in the long-run, results in costly repairs to keep units operational.
Fuel Price Volatility
The No. 1 issue facing fleet managers is the high cost of fuel. Price volatility makes planning very difficult. The recent wild fluctuations in fuel prices make it almost impossible to stay within a fixed budget. As a result, fuel budgeting has become a guessing game. You may be on budget at mid-year, but if prices jump in the summer, as they have, you will be over budget at year-end. Some options open to private sector fleets are not available to public sector fleets. Fuel hedging is one example. Some governmental agencies view hedging as the equivalent of playing the futures market and prohibit it. Not only are fuel costs increasing, but so are tire and OEM parts costs. All these costs are increasing typically without corresponding budgetary increases.
The high cost of fuel is prompting a push to “right-size” the fleet — countering the “bigger is better” paradigm. It also involves challenging long-held notions that it is prudent to buy equipment even if not presently needed to avoid the risk of not having it available when it is needed. Cost-conscious fleet managers counter this philosophy by renting or using a short-term lease for specialized equipment during peak-need periods. Another strategy is rotating out of service the least fuel-inefficient units.
Coping with the Technician Shortage
The technician shortage promises to be with us for many years to come. Current demand for this skill set exceeds the supply available in the labor pool. Young adults are not interested in the area of vehicle repair. The shortage of technicians makes fleet management staffing difficult. Often, open positions remain unfilled for many months. Fleet managers bemoan that qualified technicians are almost nonexistent, unless you steal one from another fleet. This is especially the case with diesel mechanics, who are getting harder and harder to find. In addition to the shortage of technicians, there is also a growing shortage of support personnel. Compounding this problem is the high percentage of retirements among technicians. It is a graying profession.
A corollary problem to being short-handed is that sufficient time to train existing staff or provide specialty training is not possible without interrupting shop work flow. Being short staffed makes it difficult to maintain the highest possible productivity levels in terms of billable hours.
Governments need to reevaluate their compensation, retirement, and incentive packages to retain and recruit skilled technicians. Often, technicians only consider “take-home” pay, especially early in their careers, not the benefits.
In addition to the staff shortages, fleet managers are being stretched with increased responsibilities. More and more fleet managers are being asked to perform other duties besides fleet. Additional duties tacked onto the fleet program include parking management, employee transit, motor pool management, etc.
The Big Picture
Despite successfully meeting these daunting challenges head-on, professional fleet managers are a humble lot. Most would say it’s just in a day’s work. But it’s more than that. Your work improves the lives of thousands, in some cases, millions of constituents who live in your jurisdiction. You are the unsung heroes.
Let me know what you think. firstname.lastname@example.org
Originally posted on Automotive Fleet