External factors affecting fleets in the future

Future-proofing your fleet doesn’t start by identifying suitable vehicles; it involves analysing the past and predicting the future, said Holman’s UK Sales Director, Rory Mackinnon.

Alongside internal drivers, fleet choices are impacted by a massive range of external factors. To help businesses map out these, Holman suggests PESTLE can allow you to understand the challenges. It provides a breakdown of the political, economic, sociological, technological, legal, and environmental issues that could influence investment decisions for the next 5-7 years.

Do you know the external factors facing fleets in the short- to medium-term future?

Tracking trends for 2023

Every business is unique and will be impacted differently by political, economic, sociological, technological, legal, and environmental factors. However, under each of these headings, we can see broad trends affecting all fleet operators and managers. Mackinnon walks us through his key trends for 2023 and beyond.

Political – The political environment in the UK and globally is fragile, but party politics isn’t the focus. Instead, fleet managers must look at trends that are unlikely to change.

Previous policies will probably dictate future travel, at least in the areas of mobility, and on this, we can see consensus across all political parties. There’s support for green initiatives, including CAZs, which will likely be introduced across the UK, once in place the likely hood is the vehicles that can enter such zones will be more restrictive than at present in terms of Co2. However, we’re less likely to see structural investment to improve road conditions or provide the comprehensive electric vehicle charging infrastructure we need.

Economic – Inflation is the biggest issue for all businesses, with higher interest rates and increased new vehicle prices having the most significant impact on fleet managers (and all of our mortgages). Inflation is predicted to fall, with it, interest rates, but the age of ultra-low interest rates is probably coming to an end. For those fleet managers in an arrangement that allows there business to benefit from the increased sales proceeds of used vehicle, there is at least some relief from all of the other economic challenges.

Sociological – Society is transforming rapidly, and it’s affecting consumer behaviour. We’re increasingly making purchases online and expect them to be delivered – in some cases, on the same day. The result is less domestic travel and more commercial travel. We can see this increasing demand for commercial vehicles is impacting availability and lead times. Simply put, fleet managers must wait longer for new vehicles – and pay more.

Technological – The greatest development in the last decade has been the availability of data – and the insights it can unlock. Telematics information combined with other data points can provide vital information on vehicle usage, driver behaviour, and performance. This opportunity here is to get the most out of the information to unlock efficiencies that can benefit businesses. Given its critical importance, fleet operators also must ask whether their providers are doing enough to share this data.

Legal – We can see political decisions implemented through legal controls, such as the introduction of CAZs which will increase the cost of ownership for fossil-fuel-powered vehicles as well as the potential changes to existing MOT legislation. In the future, driving such vehicles into the city centre could be illegal. Some cities, such as Oxford, are exploring even more radical ways to manage pollution – and we see this trend continuing.

Environmental – Building sustainability into your business is critical as we move forward. Alongside adapting to political and legal changes, companies must be open and honest about their carbon emissions and explain their actions to minimise their impact.

Fleets are on a journey to net zero but will take a phased approach to achieve this. We may be looking at two or three generations of vehicles until we reach net zero, but it is coming, and fleet managers must be seen to lead the way and get the wider business to share in their journey.

Insights into action

Using techniques such as PESTLE to identify the factors that could affect your business enables you to prioritise them and take steps to mitigate them. Obviously, we can’t predict the future, but learning from the past trends and recognising risks means fleet operators can introduce the flexibility to change when our plans don’t turn out to be exactly as we want (or expect) them to be.

Taking this structured approach also enables organisations to identify opportunities for growth that could be missed. It’s also an effective way to assess whether your fleet partner is delivering or not.

Get more information about how our account management team can support your fleet objectives.