The COVID-19 crisis has forced a rethinking of everything. In the fleet world that means servicing vehicles in full plastic suits, pivoting to crisis-related contracts, no-touch vehicle exchanges, and transforming from paper to digital in a day. These fleets and fleet-related businesses reveal how they've managed to adapt and prevail — and deliver essential services to combat a global pandemic.
Pandemic Survival: Adjusting Fleet on the Fly
Jeb Lopez, founder and CEO of Wheelz Up, has grown his auto parts delivery business from a handful of vans in 2010 to over 200 today in four states. As a small business owner, he realizes the need to stay prepared for an economic slowdown. But a worldwide pandemic? It’s new territory.
Right now, his clients — dealerships, parts supply stores, and auto repair shops — still want and need automotive parts to fix vehicles. “I've spoken to probably about 40% of my clients, and right now, even though they're experiencing a little slowness, they’re still a buying a ton of stuff,” Lopez says. “All our deliveries are still active.”
A few things are working in Wheelz Up’s favor, at least for now: Last-mile deliveries have spiked in the wake of restaurants and public shopping shutdowns. At this point, vehicles of all types still need parts to stay on the road.
“People still need to travel,” he says.
Luckily, the “shelter in place” edicts that spread across the country have not grounded Lopez's fleet in any jurisdiction he serves, as most of the automotive sector has been deemed "essential."
If there are any questions while on the road, Wheelz Up drivers can show authorities a printed letter or a PDF on their smartphones that confirms that they are essential workers. Drivers now wear high-visibility vests, which helps instill in them the need to follow uniform procedures, Lopez says.
Through it all, Lopez has been adjusting on the fly. As a result of the coronavirus crisis, Wheelz Up picked up a large, no-bid local government contract in Virginia to deliver emergency supplies to government offices.
The company applied for federal relief through the Paycheck Protection Program and is waiting for the funds to be released. “That would go a long way to keeping the business operational,” he says.
Preparation Meets Opportunity
Lopez believes the saying, “Luck is what happens when preparation meets opportunity” applies to his business. From having delivery vans ready to roll at a moment’s notice, a network of experienced drivers and backup drivers, as well as a robust logistics and telematics systems in place, Lopez says Wheelz Up can take advantage of unexpected opportunities.
At the end of every year, Lopez reviews the company’s handbook and policies in preparation for times like these. “This is when they (employees) start to ask questions about their benefits and whether they can file for the Family Leave Act, and each state has different policies,” he says.
In terms of internal health and safety, Lopez is making his delivery drivers wear masks and gloves, though he encountered some pushback initially.
Before the crisis he overordered an industrial supply of hygienic cleaning wipes. Each driver carries those along with a spray bottle mixed with water, vinegar, and alcohol to wipe down their vans’ interiors.
Lopez has directed his drivers to not report to work for a 14-day period if they’re experiencing any cold or flu symptoms. As a business that comes in physical contact with clients, the possibility to spread a sickness is untenable, and a client in contact with a sick driver can sink his reputation.
But it’s not an easy situation to manage. “They don’t want to call in sick, because they need the money,” he says. “Some of them live hand to mouth.”
Lopez is anticipating having to reduce his driver pool as his clients start to slow down. He hasn’t come to the point where he’ll need to furlough them, but he’ll have to consider this eventuality.
In the meantime, he’s trying to conserve cash flow. This means making sure fleet vehicles are roadworthy yet pausing non-essential repairs and grounding vehicles that need major work. Lopez contacted his lender and was able to get a delay in payments on his fleet of cargo vans.
For now, Lopez believes he’s doing the right things to survive and put him in a position to outlast his competitors.
“The companies who really can't survive in a crisis like this will die and those companies who really have their (stuff) together, they’ll survive and even control more market share,” he says. “This is a good time to invest in the survivors and learn something new.”
When Fleet Management Meets Extraordinary Circumstances
Even with travel bans, business closures, and a patchwork of states on shelter-in-place orders due to the Coronavirus pandemic, fleets still need to facilitate services and get people and goods to where they need to go.
For Motorlease Corp., a Farmington, Conn.-based fleet management company that operates in 50 states, that means meeting internal and external demands under extreme circumstances.
“In terms of client activity, it varies greatly,” says Joe Pelehach, vice president, adding that his company “is set up to work 100% remotely right now.”
While sales calls have virtually ground to a halt, he says many service fleets are going full steam, such as one client that provides parts for medical instruments. As such, Motorlease is adjusting to a disrupted process of getting vehicles to fleet clients and servicing them.
“We’re digging into every vehicle that's on order to check its status, where it is in that pipeline, and whether it’s at a port or in actual transportation,” says Jeff Perkins, vice president of operations.
At the dealership level, Motorlease is asking drivers to be mindful of new procedures. “We’re making sure that the vehicles are ready to go prior to the driver being notified,” says Perkins. “Some dealerships are open and some are not, so we're working around each of these issues as they come up.”
That entails contacting the grounding dealerships before they arrive and taking safety precautions such as meeting dealership staff outside and exercising social distancing. Motorlease is sending license plates directly to drivers and asking them to bring their own tools to put them on.
Servicing vehicles is another challenge, as dealerships and repair facilities adjust hours or close completely depending on government directives.
Motorlease has national accounts with the major service chains, but also allows drivers to use local facilities if it’s more convenient or if a national provider is closed. Motorlease will work out payments directly with the local shop or reimburse drivers directly for a credit card charge.
Pelehach and Perkins understand that the time may come when their clients will be financially impacted as a result of the business standstill, though this hasn’t hit just yet. Pelehach says the company’s longstanding policy of contracting almost exclusively with clients with excellent credit will mitigate the need for drastic measures.
If any abnormal de-fleeting needs to happen, Pelehach says Motorlease will analyze the fleet to see which older units might offer a less expensive exit, or if the unit can be transferred to a new rep.
“We have always tried to work in alignment with our clients to figure out ways that we can help, wherever we can bridge the gap,” Pelehach says. “We hope that this is a short-run phenomenon. The economy was really strong coming into this, and as we come out on the other side, everything will start to fall back into place.”
Back to Life
Motorlease is also looking to when the pandemic ends and business roars back to life.
Perkins says that most fleet clients have their 2020 orders in, though protracted shutdowns at the manufacturers will cause delays. Vehicle titling could be delayed due to DMV shutdowns, and when they do open there could be severe backlogs. “Deliveries may be slowed right at the point when the expectation is to have the vehicle on time,” Perkins says.
Similar issues will resurface when it’s time to de-fleet. Dealerships may have lots already overflowing with used vehicles and not be able to buy more. “There will be a multiplier effect with all of this,” Pelehach says.
However, whether during a global pandemic or an anomaly in the life of a business, the best practice is to have the flexibility to come up with solutions that reduce the impact of the problem. Says Pelehach: “We will always work with our customers in any way that we can.”
West Palm Beach Fleet Services: Socially Distant, More Connected than Ever
Job duties generally don’t require “staying prepared for a global pandemic.” But Mario Guzman, MPA, CAFM, director of support services for the City of West Palm Beach (Florida), believes that having the right work culture in place to begin with will make dealing with a once-in-a-lifetime crisis a little smoother.
“For our organization, it’s about our leadership up and down the organization,” Guzman says. “We have a staff that can think on their own and stand on their own, and we’re seeing how that really matters in this situation, which came out of nowhere.”
When the pandemic took hold, Guzman immediately began rearranging work life: He ordered the staff to telecommute. In-person meetings transferred to Zoom. For staff members that still need to go to the office, they’re now allowed in once a week and only one at a time.
If any employee has reported to have the flu or flu-like symptoms, the employee is quarantined, and their workstation is cordoned off. A company is called in to perform a full sanitization.
It’s been a work in progress. “In times like these, if there were already cracks in the system, you start seeing breaks.”
On the fleet side, staff technicians are now split evenly into a morning and evening shift. Meal breaks are staggered to only allow two technicians in the lunchroom at a time. They’re required to keep at least 15 feet apart.
To abide by social distancing protocols, the organization applied footprint decals to the floor to show the required gap when standing in line to interact with a service writer, for instance.
Regarding the fleet, the city parks have closed, so the vehicles that service them sit idle. Guzman’s team had been sanitizing loaner vehicles but felt it prudent to suspend the loaner fleet entirely.
The workload for garbage and sanitation trucks continues unabated. For repair work, technicians in latex gloves manually sanitize them before they enter the shop. If the job requires two technicians, they’ll each put on a mask. When the repair work is finished, the vehicles are sanitized again.
Due to the nature of transporting patients, servicing Fire & Rescue fleet vehicles requires technicians to don full plastic suits. If a patient or medic who rode in a truck tests positive for COVID-19, or even if extra precaution is warranted, the department will send the truck to a contracted specialist cleaning company.
In deference to the Boy Scout motto “Be Prepared,” the fleet management department likes to keep vehicle parts in stock. When parts are needed, the work order system had luckily already been automated.
However, Guzman says a couple of parts suppliers have shut down, which has been frustrating, but correctable. “Hey, we'll hunt and peck for those parts elsewhere,” he says. “We'll source them from Amazon or eBay.”
To Guzman’s point on individual leadership, the staff has stepped up in various ways.
The department had bought an oversupply of N95 masks pre-pandemic. Guzman gave the city’s fire department about 700 of those masks when it ran low. As well, the Fleet Services Department has been involved in a food drive initiated by the police athlete league.
The supervisors chipped in and recently bought lunch for the department. “The woman who owns the restaurant was only doing takeout,” he says. “She was so happy to get orders for 40 lunches.”
The lack of in-person communication has been hard. “I have reached out personally to every single one of my employees to see how they're doing,” Guzman says.
That includes one staffer with a three-month-old baby. Guzman can relate — he’s on paternity leave right now with a one-month-old himself. Guzman sent the associate much-appreciated extra baby supplies.
The cracks in the system aren’t as prevalent now. “It was rough two weeks ago, but it’s gotten a little easier; everyone knows now what’s going on,” he says.
That said, Guzman realizes the situation will change again as individuals and businesses adjust to Florida’s recent official stay-at-home order. “It's a long battle, and it’s far from over,” he says. “I just have to keep talking to the team to say ‘Hey, we're in this together and we're going to get through it.’”
Delivering Cannabis in a Crisis
In most environments, a 30% spike in business in one month is reason to break out the champagne. During a global pandemic — with associated supply crunches, mandated process changes, and an uncertain future — the increase might provoke more angst than joy.
Ari Raptis, founder and CEO of Talaria Transportation, a logistics provider for the legal cannabis industry, has taken recent developments in stride. “Any sound logistics company should have a ‘crisis SOP (standard operating procedure),’” he says. “Ours works for this pandemic or any other type of crisis.”
For Raptis, that starts with the workforce, which is made up of retired state police. “These guys have gone to work in all types of circumstances to prepare them for what we're going through now,” Raptis says.
Talaria, a suburban Philadelphia-based company licensed to operate in 14 Northeast/Mid-Atlantic states, delivers legal cannabis from growers and processors to dispensaries and pharmacies using 17 Mercedes Benz Sprinter and Metro vans. Two more vans are on the way to meet the increase in demand.
The coronavirus pandemic has forced operational changes at Talaria, which aren’t easily managed in the tightly regulated cannabis market.
State laws require two workers in the vans during transport. While it’s impossible to maintain social distance in the same vehicle, Raptis reorganized drivers to form consistent pairs that use the same van and equipment instead of a constant rotation.
Talaria already had a standard daily cleaning protocol. Now, all touch points in the cab are sanitized with disinfectant and alcohol wipes, and the cargo area is sprayed with a disinfectant at the beginning and end of each day.
As well as masks, drivers wear gloves that are changed after each delivery. In keeping with a crisis SOP that maintains stages of severity and readiness, Raptis is ready for stage 5: “We have full medical protective suits for our drivers if and when it comes to that,” he says.
Raptis converted all manual signatures, such hardcopies of manifests and interactions with delivery points, to a digital process. “We went completely digital in a day,” says Raptis. “Anything that was done on paper is gone now.”
The recent upsurge in business, coupled with the pandemic-related cutbacks across all industry verticals, would seemingly create supply chain issues. This is exacerbated with cannabis because it’s not legal on a federal level and therefore can’t cross state lines.
“Any (legal marijuana) state east of the Mississippi can’t keep up with patient demand,” explains Raptis, “Shelves are running empty.”
That said, more growers are coming online, and Raptis says Talaria’s integrated network is able to get the product delivered as quickly as possible. “They (growers) are amazing at what they do, but they rely on us for fleet management and the logistics side of the business.”
The company recently created software to be able to expand its business model from B2B to include B2C with home deliveries.
“Now more than ever, patients don't want to leave their homes,” Raptis says. “They are looking for an online source to get their medicine delivered to their home. (Home delivery is) pretty normal in 2020, but not in the cannabis world.”
While regulations regarding cannabis home deliveries vary by county or even town, the pandemic has already facilitated some rules changes, which Raptis feels are antiquated in general.
In Pennsylvania, deliveries are allowed, though each caregiver had only been permitted a five-patient limit. Since the coronavirus crisis, that patient limit has been lifted entirely. Other states such as New York and Maryland are scrambling to get home deliveries up and running, Raptis says.
“We’re looking at how to take this crisis and turn (the system) around for the better,” he says. “With better home delivery in Pennsylvania, or if we could start home delivery in other states, we wouldn't have such a run on the dispensaries. Everyone would be able to manage their workload a lot better.”
Open for Fleet Business
Kevin Sullivan, co-owner of a family-owned, multi-franchise dealer group serving Central Connecticut, is still doing fleet business during the coronavirus pandemic — though it’s feast or famine depending on sector.
Corporate fleet business is at a standstill, though some small commercial business is moving along. While the state ordered non-essential work to shut down on March 17, construction was deemed essential. Sullivan’s dealerships are serving contractors that are able to work within the state’s shelter-in-place guidelines, he says.
As an authorized vendor for the State of Connecticut, most of Sullivan’s fleet business — before and during the pandemic — comes from the government, particularly police departments. “We're in the process of completing some large orders for police cruisers,” he says.
A Changed Process
Sullivan, who co-owns the dealerships with his brothers Sean and Tim, are still getting vehicles to fleet customers, though “The whole process has changed,” he says.
In keeping with rapidly established industry standards, the dealerships have instituted contactless vehicle exchanges that involve night drops or arranging to leave keys in the car. Physical vehicle inspections have been suspended. Paperwork is solely handled through the mail and email.
When vehicles need human handling, they’re cleaned each time a worker enters and exits. Touchpoints are sanitized with an antibacterial spray and disposable covers are used on the steering wheels, shifters, and seats.
The safety protocols aren’t just for theoretical occurrences: “We have run into some (police) departments that have been clearly hit by the coronavirus,” he says. “They've got many members of their staff out.”
The dealerships’ service and parts departments are open, where social distancing is less of an issue because of service staff furloughs. The dealerships haven’t yet had parts supply issues, “But we are anticipating that to be a problem,” Sullivan says.
In terms of aftermarket installations, Sullivan’s dealerships work mostly with upfitters of police cruiser packages and they “seem to be rolling as normal.”
Sullivan is okay with taking consumer trade-ins, though dealer-to-dealer trades are virtually nonexistent now. “Nobody wants an outsider on their property swapping cars,” Sullivan says.
To Sullivan’s knowledge, other dealerships in his area haven’t shut down completely but have furloughed much of their workforces.
For now, as retail sales have all but dried up, Sullivan has metal ready to move.
Some auto manufacturers were dealing with oversupply issues before the pandemic hit. Sullivan’s dealerships came into the crisis with five to six months of inventory on hand, more than the normal plan of three to four months, he says. He expects April and May retail sales to come in 50% to 60% short of a typical month.
“This could be an opportunity to reduce the inventory,” Sullivan says, noting that he could run into shortages if factories remain idle for too long. “I've got nothing in the pipeline after 60 to 90 days. Everything's been canceled.”
The large auto dealer groups have made headlines with mass employee furloughs, and Sullivan’s dealerships were forced into the same boat. Sullivan says his biggest struggle right now is balancing employee levels while managing federal stimulus money that will put the business in the best position to move forward.
“The hardest part is looking a longtime employee in the eye and saying, hey, unfortunately I don't have enough work to keep you busy,” he says. “I have to furlough you.”
“It takes time to gather good, valuable employees.”