Fleet management professionals are facing logistical, financial, and market challenges that were not present just a few years ago. Some of these challenges are actually the result of new business opportunities and efforts to make the industry more efficient, while others are related to fluctuations in the marketplace.
As a result, fleet managers are charged to better understand the current landscape and consider new strategies in order to gain a competitive advantage. Many of these strategies involve the deployment of Internet of Things (IoT) solutions, and we will take a closer look at that side of the equation in Part II of this series. But for now, let’s examine some of the trends that are creating new challenges for the fleet industry.
Online shopping: E-commerce sales are booming, growing between 20 and 25 percent each year. While this rapid growth increases potential revenue for delivery businesses, it is also tightening trucking capacity, elevating the importance of final-mile delivery processes, and creating a demand for more precise pick-up and delivery times. In addition, e-commerce is changing shipping strategies from large volume and low frequency shipments to low volume and high frequency shipments, especially during the holiday season.
Driver shortage: Fueled by online shopping delivery and a surging economy, the current nationwide driver shortage accelerated in 2017, and it is expected to grow more severe in the coming years. A recent study from the American Trucking Associations (ATA) predicts that the shortage could reach 174,000 drivers by 2026.
Driver safety and productivity: Improving driver safety is required by some government regulations. The ELD mandate, which went into full effect in the United States in April 2018, requires that trucks have either an automatic onboard recording device (AOBRD) or an electronic logging device (ELD) solution to log Hours-of-Service (HOS) and Record of Duty Status (RODS) – many other countries have already implemented a similar regulation or are planning to in the coming years. No one would argue that increased safety and productivity is a good thing, doing is an unquestioned expense.
Fuel price volatility: Fuel costs can be affected by natural disasters that close refineries, oil surpluses and shortages, as well as political forces. Fleet managers are exploring technology-based route optimization and driver management solutions to maximize efficiencies, to helping to curb costs, regardless of market fluctuations.
In Part II, we will address how IoT is helping the fleet industry overcome these challenges.