Lessons learnt from the commercial vehicles sector

Like many industries, the commercial vehicles sector has faced several headwinds over the last 12 months. From the cost-of-living crisis to rising inflation, soaring interest rates and unpredictable consumer demand, we’ve seen customers understandably requesting unprecedented levels of support, insight, and value-creating initiatives from their chosen fleet management partner – all of which have presented opportunities for Zenith Commercial to further support their customers.

As we move along into 2024, we’re analysing some of the key trends and new consumer requirements that are driving change in the commercial vehicles sector.

1. Quality vs Cost

The battle between cost and quality is one that’s constantly raging, and with over 40 years in the commercial vehicle fleet management sector, we’re acutely aware of the dilemma our customers face in relation to price and value.

Over the last 12 months, we’ve seen a real shift towards a greater focus on quality. In the current economic climate, fleet operators need to function as cost effectively as possible and whilst fees and commercial terms will always be important factors, customers are now better placed to understand whole of life cost and what drives efficiency, plus the significant role a high-quality fleet management provider can play in achieving fleet optimisation from a cost, compliance and availability perspective.

Ultimately the biggest cost to an operator is their maintenance spend, and the management fee becomes insignificant when stood beside their maintenance spend. On this premise alone, operators are now much more focused on a potential fleet management partner’s capability – scratching beneath the surface to see the impact process, scale, technology platform, network and people have on reducing their overall spend on vehicle maintenance and fleet availability.

Because of this, our transparent cost model and value proposition has become even more attractive to operators when they look to evaluate the market for a tried and tested fleet management provider who can point them to, track, monitor and report on the various value levers we pull on their behalf.

2. The search for stability

3. Digitalisation is in demand

From harnessing the power of data to forecasting industry trends, organisations are calling for fleet management partners to support them more with digitalisation to drive efficiency. In today’s world, this means more than simply introducing new technology, it’s about making it meaningful, generating insights with the power to inform better decision-making and future fleet strategy.

Customers want their fleet management provider to give them insights beyond the day to day relating to their own fleet, keeping them abreast of industry innovation and legislation. They want push rather than pull from a data perspective, and the ability to drive value from the insights provided.

Zenith Commercial has been at the forefront of industry digitalisation and continues to invest heavily in our technology stack. We own the IP on all our proprietary systems and have a continuous improvement mentality when it comes to user experience, functionality, and platform integrity. Whilst our aim is to continue to provide best-in-class systems for our customers, we also invest significant effort in supporting our supply chain on the digitisation journey. It’s crucial that we assist and empower our key suppliers to benefit from our technology, as this makes them more efficient and allows us to pass this value on to our customers.

4. Sustainability meets affordability

As our industry continues to embark on the journey towards decarbonisation, the importance of having the right fleet management partner has become even more crucial.  All businesses want to embrace the drive to a more sustainable world, whilst ensuring they have both the infrastructure and financial means to make this happen. Change is rarely easy, and we are embarking on one of the most prolific changes our industry has ever seen. Alternative fuel technology is evolving at pace and knowing when, and with whom, to invest becomes a critical enabler of future strategy execution and success.

Whilst the market LCV offer is far more advanced than HGV, it is by no means at a state of maturity yet with regards to industry take-up and charging infrastructure – both of which are reliant on scale to justify the investment case. The outlook on HGV is even more uncertain as to which underlying power source will fuel the trucks of the future.

Whether the leading technology is battery electric, hydrogen, gas, or biofuel remains to be seen, and most probably points to a mix of all four to suit different operational applications. The cost for adoption of HGV alternative fuelled vehicles is substantially more than its diesel counterparts, and this makes for a financial challenge regardless of the operator’s want and intent to use these derivatives.

Due to the capital investment required, more businesses are looking towards leasing to help fund their entry into alternative fuelled vehicles and mitigate some of the potential risks associated with ownership.

Sustainability isn’t all about alternative fuels. Partnering with a proactive and efficient fleet management provider enables operators to keep vehicles running for longer, through robust preventive maintenance regimes, transitioning to greener maintenance regimes (including mobile solutions), extending the life of the vehicle parts, and ultimately reducing waste in the long run.

Optimise your fleet. In this harsh financial climate, ensuring your fleet is available and in optimal condition is one way to boost sustainability without placing unrealistic financial pressures on your business in the short term. And when the time finally comes round to upgrade, we can advise and support you on your plans for a decarbonised fleet.

5. More customers are looking for a strategic partnership

Over the past few years, commercial fleet customers have become more demanding of their partners, in terms of service, digitalisation and proactive planning. Driven by an increased focus on data, more focus on due diligence and a rising desire for improved performance, customers are looking to work with fleet management partners on a more strategic and long-term basis.

Due to rising costs, compliance obligations and the significance of moving to decarbonised fleets, we believe talk of fleet management is more prevalent than ever in boardroom discussions. There is wider stakeholder involvement in both the selection and appointment of a suitable provider, as it is generally recognised that the right partner will get results and align fleet strategy to the wider business objectives and values.

This recognition, along with the opportunity to take part in wider strategic discussions, will enable Zenith and our customers to collaborate more effectively, delivering impactful solutions that drive long-term results, helping to futureproof your organisation for years to come.