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Understanding The Fleetification of Everything

November 15, 2017, by - Also by this author

I didn’t invent the word “fleetification,” but it’s one I’ll continue to use. I’ll give credit to the folks at ChargePoint for that. Regarding the proliferation of its EV network, ChargePoint is “preparing for the fleetification of everything.” The term is apropos to our times.

Fleetification involves the evolution from individually owned vehicles to ones shared by various user bases in Mobility as a Service (MaaS) schemes. Those vehicles will need to acquired, managed, and remarketed in ways heretofore unseen.

Fleetification involves new stratum of fleet inserted into consumer and business use scenarios, and many entities are strategizing on how to become those providers. In this disrupted world — where harnessing technology and being quick to market is essential — no single entity can do it alone. Collaboration is essential. This theme wove its way through many of the presentations at the inaugural Fleet Forward Conference, convened last week in Miami.

The energy at Fleet Forward was palpable. As a new event, fewer attendees knew each other, or at the very least had not yet met in person. These attendees — from fleet management companies, auto manufacturers, ride-hailing networks, technology providers, carsharing and car rental companies, utility fleets, auto dealers, consultants, think tanks, universities, and government agencies — came to learn, network, and collaborate.

In my opening remarks, I brought up the fact that Uber ran a leasing company, Xchange Leasing, which quickly grew to a 40,000-vehicle portfolio. This would’ve made it the eighth largest commercial fleet lessor in North America. Uber shut down Xchange after it lost an average of $9,000 per vehicle.

While the collective fleet management wisdom in the room in Miami would’ve never let that happen, I asked attendees to ponder the fact that Uber ran a leasing company. Worlds are colliding. Collaboration is essential.

While fleet providers are tasked with figuring out new markets to serve, traditional fleets are facing disruption as well, some more than others. It’s easy to dismiss the transportation revolution (“enough with the driverless car stuff”) when fleet operators have plenty to worry about today. True, the endless internet chatter discusses ideas that seem far from implementation.

This attitude, however, dangerously does not take into account the changes happening right now, as evidenced in the presentations at Fleet Forward.

Trucking fleets today are experiencing a shortage of 50,000 drivers; this gap will increase to 250,000 drivers by 2025, said Jack Roberts, Heavy Duty Trucking (HDT) Magazine’s editor and resident futurist. Roberts then explained that the in-home grocery delivery market, worth $1.7 billion in 2017, will grow to $100 billion by 2025. For trucking fleets, platooning, deep learning of routes, and the advent of autonomous trucks can’t come fast enough.

Last year, road deaths reached their highest level in nearly a decade. One in three miles driven by a fleet vehicle correlates to far too many deaths associated with fleets — the great majority due to distraction. Dr. Stefan Heck of nauto stressed that technology is available today to prevent 25% to 50% of collisions, even before we reach full autonomy. Standing still in this arena is not an option.

David Liniado, Cox Automotive’s mobility expert, said we’re in the midst of “the fifth big change” known to modern man. These changes are measured in centuries, not years. Inherent in this is the societal transformation to a usage-based economy, which will grow exponentially because it is more efficient — and fleets are tasked with assessing and implementing new efficiencies at increasingly alarming rates, or risk being left behind.

Along those lines, John Korte of Donlen said today’s fleet managers need to adopt the Oakland A’s “Moneyball” principles and understand the role data is playing to increase efficiencies. Our panel on the evolution of fleet managers furthered this concept with the notion that fleet managers must manage an increasingly overwhelming fire hose of data while assimilating with procurement and travel departments. Managing vehicles is shifting to managing travel and rides.

If you feel your fleet is optimized today, why bother assessing new shared-use solutions? Both Rainer Becker of Maven and Alex Thibault of Vulog made the point that cities are managing their transportation demands through parking restrictions and a de-emphasis of fossil fuels. Sharing vehicles to increase utilization and lower a fleet's footprint is essential.

Meanwhile, the car rental industry — the most experienced fleet managers in the world, and those running the largest number of vehicles — is figuring out its place as mobility providers with the more immediate task of making the airport rental experience more convenient.

The purpose of a fleet — at least the ones with wheels — is so intrinsic to society that it’s hard to find an actual written definition. Fleets “simply” move goods, materials, and people, and facilitate sales and services. Think about how essential that is to absolutely everything.

This concept will only grow as we assimilate “the fleetification of everything.” The Fleet Forward Conference will be the fulcrum for those changes. The Fleet Forward “founding fathers” in that room in Miami have some work to do.

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Chris Brown

Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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