COVID-19 and related social distancing measures have greatly impacted the business world across industries, and transportation is no exception to the rule.
The virus has also had a major impact on global shipping markets as supply chain disruptions continue to cause a slump in U.S. freight volume. Since early 2020, intermodal freight volume in the United States has seen a steady year-on-year decrease in intermodal freight volume.
Vehicle fleets rely heavily on transit, freight, and the supply chain to thrive, so it is unsurprising that the result is a significant impact on fleets and fleet operators; one that could affect both their survival and the way they do business in the upcoming months.
The good news is that there are approaches that fleets can take to better weather the instability. Staying informed is a critical component of agility - we recommend grounding yourself in the latest data, trends, and recommendations to respond as quickly and effectively as possible. This article will provide a snapshot of the current state of COVID-19’s impact on fleets, and then strategize some approaches to help fleet owners stay agile and adapt to changing times.
How has COVID-19 affected fleets?
COVID-19 has affected fleets in several ways:
Increased customer caution
The risk of coronavirus exposure has driven most people indoors for the present, but industry experts think that the pandemic’s effect on consumer behavior will last far longer than the virus itself. Travel restrictions will ease in fits and starts according to each country’s situation, and customers may still be wary of traveling long after that.
This customer caution has had an immediate impact on fleet sales. According to an anonymous poll conducted by Cetaris, 50 percent of fleets reported a reduction in new sales. On the other hand, grocery, freight, warehousing, and package delivery industries have seen an increase in new sales as people stock their homes and have migrated to online shopping.
Busing
Within the transportation industry, the busing sector experienced a complete halt in operations days after concerns about coronavirus peaked. According to the American Bus Association, nearly 3,000 motorcoach companies and 36,000 buses were brought to a standstill while scheduled and commuter services are estimated to be down by between 80 and 90 percent.
Freight transportation and logistics
The economic fallout of COVID-19 shows different impacts on carriers. Impacts vary based on markets, regions, mode, and customer profile. To provide an example, according to CSCMP’s state of logistics report, farm-to-grocer supply chains are expected to benefit while carriers delivering cross-border auto parts face greater challenges. According to a report from McKinsey, compared with last year, trucking volumes initially increased by about 30 percent in 2020 as a result of panic buying, then dropped markedly, with volumes beginning to tick back up in June. Additionally, “last-mile deliveries have surged more than ten times over”.
What can fleet organizations do to minimize impact?
There is no single answer and of course, every operation is impacted differently and will respond differently as a result. But there are a number of surefire things fleets can do to increase their survivability while prioritizing the health, safety, and wellness of the people at each point in their customer journey.
Implement appropriate health policies
Fleet operators should do their utmost to protect their workers and themselves from coronavirus exposure. Apply cleaning and social distancing policies inside essential operations -- whether that is in passenger or freight vehicles, in the maintenance bays, or inside of the administrative office itself.
- Stay up-to-date with the latest coronavirus resources at the Department of Transportation.
- Perform a COVID-19 risk assessment.
- Clean vehicles and high-traffic areas multiple times a day, with deeper cleaning sessions at the end of the shift.
- Require workers to stay home if they are unwell.
- Do not penalize workers for calling in sick.
- Increase access to hand-based sanitizers.
- Supply employees and passengers with personal protective equipment
- Position all employees and passengers at least 6" apart.
- Encourage paperless workflows to avoid close contact and handoff.
- Frequently wipe down high-touch surfaces.
- Promote remote work policies wherever possible to minimize person-to-person contact and reduce the number of people working on location.
- Provide drivers with adequate resources to stay safe on the road. The American Trucking Association has compiled a list of resources for truck drivers to help them adapt to ongoing changes while improving health and safety on the road.
Review leasing contracts
Fleets that lease their vehicles need to review their leasing contracts in the wake of recent changes brought about by the pandemic. The mileage and year cycles listed in your contracts are no longer suitable in a time when few people travel any significant distance.
Most leasing companies will be understanding of the current situation and accommodate you by either extending leasing contracts or offering more appropriate pricing.
Focus on process and streamline costs
Fleet companies should use this time to invest in technological and process improvements that will streamline their operations. There are several areas where this can take place:
Streamline costs and maximize returns. Evaluate your current warranty and core programs. Are you holding your OEMs accountable to the policy warranty? Can you reduce your inventory or reduce slow-moving parts?
Safety and cleanliness. As mentioned above, strict safety and cleanliness policies will keep your employees safe and motivated to do their jobs.
Vehicle maintenance. Proper vehicle maintenance is crucial for mothballed fleets and even more for fleet vehicles that are still in service. Don’t let your vehicles degrade due to neglect, because this will set you back when things eventually reopen. Track maintenance schedules and statuses using centralized fleet management software when possible.
Process automation and digitization. Employ digital solutions like a paperless office and remote work wherever possible. This both keeps employees safe and helps make operations more efficient. Digitizing data means it’s easier to share important information between locations, including resource availability, risks, and high-priority actions.
Productivity tools. Use digital scheduling and task tracking tools to manage workflows and increase efficiency. A proper fleet maintenance software solution can automate PM scheduling and help standardize jobs and job times for more predictability and fewer breakdowns in a moment where uptime is critical.
If you are currently using fleet maintenance or EAM software, here is a list of benchmarks to help you focus on optimizing your implementation today.
The path forward
Times are difficult right now and will be difficult for the near future, but there is still hope. Fleet owners and operators still have a chance of keeping their investment intact by mitigating risks, planning for the future, and streamlining operations wherever possible.
Information provided by Cetaris
