Setting strategic fleet goals in 2023 and beyond
January 05, 2023
Setting goals for your fleet operations is crucial to set the stage for a successful year. In 2023, whether you are looking for strategies to minimize costs, enhance safety programs, or to start your electrification journey, we’re here to guide you in setting the right goals for your fleet.
How to approach goal setting
The first step towards successful goal setting is to establish Specific, Measurable, Achievable, Relevant, and Timebound (SMART) goals that fit your unique needs to make big goals more attainable. Element Fleet Management brings deep expertise and unparalleled capabilities, to help you confidently plan for the future with a strong fleet partner. Our industry-leading strategic consulting services identifies cost saving opportunities based on clear proof points, to position you to achieve your goals.
Set realistic goals that are compatible with your fleet size, operations, and market. A large-size fleet may have bolder and stronger commitments towards fleet electrification. Small or mid-size fleets may pursue incorporating more fuel-efficient vehicles (such as hybrids if available) and improving driver behavior to increase fuel economy, as reasonable goals to advance sustainability efforts.
An important factor to consider is total cost of ownership (TCO), with net depreciation, fuel, and maintenance accounting for more than 80% of fleet spend. While there are variables within these categories that are out of your control, such as fuel price volatility, interest rates, and material shortages, understanding the various levers impacting your TCO spend will enable your decision-making around more realistic goals. Additionally, lower battery costs have reduced the total cost of ownership for electric vehicles (EVs). As EVs are projected to become the dominant type of new vehicles sold by 2035, consider EV adoption as part of your goal setting.
Setting short-term and long-term fleet goals
As you undertake strategic planning for 2023, you should factor in how much time you will need to achieve your goals, whether it is over the short-term or long-term. Here are a few examples on how to approach fleet goals from a sustainability, vehicle management, and safety perspective:
Setting sustainability goals
Your sustainability goals should be directly linked to your organization’s overall environmental, social and governance (ESG) strategy. Talk to the key stakeholders in your business and then understand the goals from a corporate standpoint. Here are three things to consider:
- Develop or review an ESG plan – Work with your internal leadership team to develop an ESG plan. If you already have an ESG plan in place, review your company’s ESG strategy to help determine how fleet electrification can play a part in contributing to the overarching sustainability goal. Is reducing greenhouse gas emissions part of the overall ESG plan? If not, it may be more realistic to focus on reducing fuel consumption in the short-term and setting an aggressive goal for EV adoption over the long-term.
- Fleet composition – If you’re considering EV adoption, whether conversion to a fully electric vehicle or a hybrid, you can work with Element to assess the type of vehicles in your fleet and how you’re using those assets. This data, coupled with a customized driver survey, will help to identify the best EV adoption and charging strategies for your specific fleet. From there, you can identify the best candidates to pilot and gain practical insights for the EV program. A greener fleet could also mean planning for budget increases in certain fleet spend categories for capital and operating expenditures.
- Pilot-first approach – Develop an EV pilot program prior to a larger EV deployment to enable long-term electrification success. An example of a SMART goal you could set is: “To pilot 5% of the company’s fleet within the next 2 years.” Work with stakeholders such as the finance and procurement teams, to determine the feasibility of starting an EV pilot in 2023.
Setting vehicle management goals
When planning for ongoing vehicle management, which includes acquisition and vehicle utilization, being proactive is key. Here are three things to consider:
- OEM diversification – Consider developing relationships with Original Equipment Manufacturers (OEMs) that are taking new clients, to acquire needed vehicles for your fleet, as part of your goal planning. Starting early with model year planning is important when considering alternate OEMs, to get the buy-in and approvals required.
- Replacement policy – Establish a replacement policy to provide projections for when vehicles need to be replaced. Reviewing policy over the short-term will assist with planning for upcoming order cycle windows, which includes the number of vehicles and models that need to be ordered. With supply chain constraints, consider non-traditional approaches like leasing used vehicles or incorporating vehicles that get the job done but might not be the first choice in a normal environment for pickup and van models. Over the long-term, it could be more of a catch-up strategy, where vehicles are ordered in line with historical averages, prior to the vehicle production challenges over the last two order cycles. We are likely to see similar vehicle production challenges for model year 2024 vehicles (calendar year 2023) with things getting closer to normal in calendar year 2024.
- Vehicle utilization – Goal planning should include redeploying vehicles and selling vehicles that are no longer needed. A redistribution model for vehicles with high and low utilization, can assist with optimal replacement timing and reducing downtime to keep fleets running efficiently. Looking at factors such as lease versus driver reimbursement can help to ensure that you are making decisions that are the most cost effective for your fleet. Consider planning for vehicle acquisition 5-6 months prior to the end of the replacement cycle, prioritizing units with higher mileage.
Setting safety goals
We recommend a holistic approach to improve workplace safety, reduce collision rate, and minimize costs. Here are three things to consider:
Safety culture – Foster a safety culture from the top down to reduce risks and prevent accidents. This involves developing a comprehensive safety program, with considerations to employee incentives, seasonal safety, safety features, and accident management.
Safety policies – Establish safety policies such as a winter tire policy or a driving under the influence (DUI) policy to increase driver safety and to reduce preventable accidents and fatalities.
Driver monitoring and training – Continuous monitoring of motor vehicle records (MVR) should be a fleet goal, as it allows for more real-time visibility, keeping companies up to date on driver risk profiles. Monitor drivers and provide targeted just-in-time training. For example, deep dives into driver behavior have shown that drivers with a high propensity towards harsh braking tend to get into rear-end type accidents. Adopt telematics and prescriptive coaching to high-risk drivers to reduce accidents. A short-term goal could be to conduct fleet safety training with high-risk drivers to reduce accidents by 10% within 12 months.
Case study – corporate visibility and telematics partnership
Boosting performance and decision-making
Xcelerate Intelligence Element’s data visualization tool makes exploring information more intuitive and time efficient, allowing clients to focus on what is most critical for strategic planning. By identifying key drivers of cost and analyzing operational trends, clients can leverage insights to establish and track goals using the platform. With Xcelerate Intelligence, clients have improved inventory oversight and are able to make sound decisions based on fleet data.
Element’s strategic consulting team is also available to assist clients with goal setting, to help mitigate risk, reduce cost and increase productivity through benchmarking data.
Are you ready to take action?
What steps are you taking to establish your fleet goals for 2023? Get in touch with us to determine the right goals for your fleet's needs.
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