The latest industry benchmarking survey from Fleet Advantage shows a growing number of carriers plan to deploy alternative-fuel vehicles sooner than later. The report also indicates that maintenance and repair trends remain top of mind and that fleets are focusing more on modernizing their assets and shortening vehicle life cycles to meet various environmental, social, and governance (ESG) goals.
Among the topics discussed in the survey, 40% of respondents said they plan to deploy alternate-fuel trucks within the next one to two years. This is a stark comparison to just a year ago, when 54% said they planned to deploy alternate-fuel trucks within five to 10 years, according to Fleet Advantage’s survey.
Sixty-five percent of respondents this year said they are looking to deploy battery-electric trucks, compared to the previous benchmark survey in 2021 when only 3% of executives said they were procuring electric trucks.
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“There is a ton of interest and activity around electric trucks,” Hadley Benton, Fleet Advantage’s EVP of business development, told FleetOwner during American Trucking Associations’ Technology & Maintenance Council’s 2023 Annual Meeting in Orlando, Florida.
“Most of our customer base is private fleet,” Benton said, noting that delivery fleets and those running shorter routes are most interested in battery-electric vehicles (BEVs). “We actually took a proactive approach and said, ‘OK, let’s look at where customers are doing business—what state are they in?’ Since we have their mileage data, we can look at assets that are running really short load mileage and short routes and match that up with grant opportunities in those states. Then, if they are interested, we tell them where there is a potential fit for an electric vehicle.”
Fleet Advantage also recently announced plans to order 200 EV Class 8 tractors to lease out to customers in 2023. Because of the industry’s growing interest in BEVs, Benton noted that Fleet Advantage could potentially double that commitment.
When it comes to any new alternatively powered vehicle, Benton stressed the importance of understanding what the residual value risk looks like for five to six years down the road.
“It’s really important to be flexible,” Benton urged. “Have a plan and have one that has flexibility built into it so that as the market changes, you can pivot. The technology is changing so fast. Don’t get locked into financial structures that don’t allow you to get out without a lot of penalties.”
Leasing trends on the rise
Fleet Advantage’s survey also addressed trends in equipment financing, with nearly half of the respondents (42%) saying they are leasing their trucks, compared with 58% in a cash or finance situation. This is a significant jump in leasing compared to last year when 31% reported being in a lease structure from just 14% two years ago, according to Fleet Advantage.
However, flexibility is a growing trend, as 33% of respondents said they are locked into their current financing situation and have little negotiating room. Fleet Advantage underscored the importance of data analytics such as a lease vs. purchase or unbundled vs. full-service lease comparisons in the planning and procurement of truck acquisition, especially when market conditions, fuel, and interest rates experience volatility.
Maintenance, repair, and a greater focus on ESG
Maintenance and repair trends continue to be top-of-mind for fleet executives, according to this year’s survey. Seventy-four percent of respondents said they are conducting maintenance in-house, an increase from 63% from a year earlier.
“They have more control, there is a lower cost, it allows you to be more flexible, and you also get better data so you can make better decisions when it comes to things like vehicle life cycles,” Benton said of bringing maintenance in-house.
See also: Maintenance and repair costs rise, but rate of increase slows
Similarly, the majority of respondents (59%) also indicated they are operating their trucks five years or less before replacement, which coincides with today’s greater corporate focus on ESG. This number is up from 45% in the previous benchmarking survey. In addition, roughly 60% of fleets shortened their truck life cycle even during the current difficult economic and truck procurement climate.
“The current economic climate continues to present many challenges for fleets all over the country, which is why flexibility is a necessary business and financial strategy to meet corporate and ESG goals in the years ahead,” Benton said.
