Fleet Strategies: Pivot with Minimal Disruption

Fleet Strategies: Pivot with Minimal Disruption

By Jasmine Glasheen

May 2020

The Covid outbreak threw a wrench in many fleet leaders’ agendas. Suddenly, plans such as business expansions, burgeoning client relationships, vehicle acquisitions and hiring have been put on hold… or suspended altogether. It can be challenging to pivot business plans unexpectedly, while simultaneously minimizing business disruption and pushback from staff. Ideas can suddenly be upended by shifts in the economy, global issues, or even movements within the organization itself. As regulations around business openings and operations are changing almost daily, organizations have been called upon to pivot more quickly than ever before. And the threat of government fines and pathogen spread looms large for fleet agencies that have managed to remain operational.
So, how can fleet agencies turn small defeats into long-term success and pivot quickly, while still being responsible to their staff and clients in the process? We spoke with two fleet leaders and NAFA members to find out.

Communicate Strategy Changes with Employees
Managers may need to alter their strategy when big ideas become unfeasible due to unexpected economic or global issues such as Covid. When it comes to communicating a change in plans with drivers and employees, Brendan P. Keegan, CEO of Merchants Fleet says that it is all about the focus of the messaging.

“A big idea does not have to go away,” Keegan says, “but it might have to take a back seat in the interim. Creating a clear action plan can help a fleet manager prioritize and find the opportunities that exist amongst the chaos.”
He adds that fleet managers can use the time during shutdowns to find new ways to engage employees and drivers, as well as responding to the increased demand for eCommerce and home delivery. In addition to creating a clear plan-of-action and communicating it effectively, Brett Ashley Bridges, Sales & Project Coordinator at BBL Fleet, suggests that fleet managers pivot by analyzing and prioritizing what is most important to accomplish. She says that fleet managers need to determine problems versus symptoms.
“If you’re looking to cut maintenance costs,” Bridges says, “maybe the actual problem is that it’s time to replace a vehicle; the maintenance costs could be symptomatic of (the fact that the) vehicle that needs to be remarketed.”
“From there, break up the action items into portions that allow you to complete the steps as a rate that considers what’s occurring externally. Resolving the pressing issues will set the groundwork for actualizing the remaining of the goals when business is back to running as usual.”

Smaller Agencies Can Use Agility to Their Advantage
There’s a common misconception that, when it comes to fleet, bigger agencies are better positioned to pivot in times of flux. However, there are myriad ways that smaller agencies can use their size to their advantage. Perhaps the foremost of which is by utilizing their agility to quickly change course without the hindrance of red tape from multiple corporate branches. Brett Ashley Bridges says that a unique quality of smaller agencies it that they’re less siloed than larger fleets, and that their employees tend to wear multiple hats.
“Part of that agility advantage is that employees want to help,” she says. So, giving them ownership in providing solutions within their area helps create a positive work atmosphere and better results.”
Brendan Keegan adds that it is critical to be able to able to pivot, adapt and provide outside the box thinking for clients. “These unique abilities allow a smaller agency to be more responsive to clients in a time of crisis.”
“In addition,” Keegan says, “a slowdown period can also allow for a smaller agency to look at ways to provide more benefit to the client. Providing driver safety and policy training and educating clients on maintenance needs can be beneficial during a down time, especially leveraging online tools to provide online trainings.”
He suggests that fleet leaders take this time to reflect on the business and look at innovative changes they can make to increase productivity in the long term. “Maybe that means you are building out a new business model or focusing on a marketing campaign, whatever it may be – take the time while you can.”

Large Fleet Agencies Utilize their Network When Issues Arise
Having a large network is important, but Keegan posits that for a large agency to utilize their network properly, the agency must be willing and able to leverage their network in new and innovative ways. He says that by correctly allocating the buying power and resources available, larger fleet management companies can work more closely with OEMs, upfitters and other essential suppliers and vendors. Keegan’s team at Merchants is using the shutdown to focus on the services they offer their clients.
“As we anticipated the large impact of this crisis,” he says, “we gathered our fleet experts from our business, looked across our offerings, adapted, and innovated. We looked at the services that made the most sense for fleets today—for instance, as OEMs are delaying some production, we are pulling from our mobility inventory nationally to make vehicles available for clients.
 “A best practice six months ago may be irrelevant today,” he adds. “At their core, agencies must be able to shift and be more adaptable to accommodate today’s environment.”

Identifying Opportunity in the Unexpected
Coronavirus has altered the course of the broad majority of operating fleet agencies: Commercial airlines cut flights by 80 percent. Imports at the two biggest overseas shipping harbors, Long Beach and L.A., fell by over 500,000 container units in February alone. And the Navy recently began a public health investigation in cooperation with the Marine Corps Public Health Center and the CDC to understand the spread of Covid-19 onboard USS Theodore Roosevelt––as this vessel alone has had 678 confirmed cases to date.
While unexpected delays or derailments are never enjoyable for any company, Bridges says it may be a needed push for companies to audit fleets in order to be more efficient and reduce costs.
Bridges suggests that fleet leaders should consider what gaps there are when identifying overall fleet needs, and review services that their fleets use to see where savings or rates could be negotiated. “It’s also a fantastic opportunity to revise company policies and monitor compliance to rectify inadequacies which can be costly,” she adds.
At the onset of Covid-19, Brendan Keegan sat down with his leadership team at Merchants to analyze the delays and any possible derailments that their clients and company might face.
“In doing so, we were able to think ahead of the chaos and approach some of our challenges with solutions, ultimately leading us to more flexible offerings for our clients. For some fleets this may mean looking at efficiency. Today, cash is king. Fleets should be looking for underutilized assets and look to their fleet partners to provide a cash offer for them.”
“Alternatively,” Keegan adds, “if a fleet has owned vehicles that are operationally needed, look at selling the vehicles to the fleet company and lease them back through a sale and lease back program. This is a time to innovate, think and act differently in a useful way. Companies that are able to think proactively, know what they are going to do, and act proactively, will be at an advantage.”

Demands of Fleet Agencies Evolve in the Wake of Coronavirus
In the wake of this epidemic, clients and fleet agencies will have to find new ways of conducting their business. While businesses are slowly beginning to reopen, it will take some time before operations return to scale. Mobile options for fueling and maintenance were always available, but Keegan maintains that the need for minimal contact during the coronavirus will make these offerings high demand.
“We at Merchants Fleet are seeing an increase in our Mobility offerings,” Keegan says, “with clients who are looking for vehicles to offset the OEM delays and shortages, as well as (clients looking for) vehicles with short term lease options.”
He adds that clients who are in essential businesses, such as delivery services that need to add routes, need flexible, short-term options to be able to efficiently scale their operations.
“In addition, Keegan says, “they need options to keep vehicles on the road if demand for routes remains after the coronavirus peaks. Programs like our Convertible Lease program offer the flexibility to lease a vehicle short term and convert to a long-term lease, if needed.”
What does the future hold for fleet agencies as we begin to see the light at the end of the tunnel of this pandemic? Touchless communication, mobility, and knowing how to utilize the size of their networks can position fleet agencies of all levels for success in the new global landscape. Those that successfully pivot won’t have to worry about getting left by the wayside. According to Keegan, the continued trend of less contact, as well as convenience, “will likely keep the demand going.”
Bridges says that the role of fleet agencies will shift to that of “consultant and advisor.” “Customers will want to explore potential savings more in depth,” She says. “And, as a fleet management company, we’ll be able to provide that insight for them...they may also be considering other services like telematics or maintenance programs for additional benefits.”

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