How to build a successful fleet acquisition strategy
October 18, 2024
Your fleet acquisition process can make all the difference in helping you cut costs, boost performance, and stay ahead of the competition. Once you factor in all aspects that influence an effective acquisition strategy, you can take the steps needed to drive success.
Proactive measures will simplify your end-to-end fleet acquisition process, minimize the effect of any shocks or stress in the marketplace, and maximize your fleet value.
The benefits of a strong fleet procurement strategy
Fleet acquisition is the strategic procurement of the right vehicles and services that gives you significant cost savings and efficiency. This involves selecting the right make and model for the job, negotiating favorable terms, and ensuring timely delivery to avoid extra expenses.
You may need to account for a 10-month cycle from decision to delivery.
Save more with early factory ordering
Get vehicles specified with everything you need and nothing you don’t. Stock ordering forces you to acquire a vehicle that’s already built, which could have unnecessary costly features or a trim level above what is needed. Apply for rebates and avoid stock fees that come with high dealer markups.
When you plan and negotiate in advance you avoid buying stock at the last minute, which can cost up to $5,000 more per unit – during the pandemic this number reached up to $15,000.
Factory order vs. stock order
Consideration Points |
Factory Order |
Stock Order |
---|---|---|
Pre-approved fleet specs. ensuring compliance with clients approved vehicle specs |
Retail specs, More variation |
|
Driver level ordering with standard profile controls and limited options for drivers based on client policy |
||
Ability to plan and forecast for business needs |
||
Number of vehicles being ordered |
Great than 2 |
Less than 2 |
Upfitting required |
Field upfitting possible but costly & greater variability |
|
Exotic delivery location or regulatory requirements* |
Transport cost can be expensive |
|
Pricing controls |
Can cost on average $2-5K more than a factory order dependent on make & model |
|
Emergency or unplanned needs |
||
OEMs not supported for facotry ordering |
*(Hawaii, Puerto Rico, Alaska, Northern parts of provinces, Nova Scotia, California emissions regulations)
We helped our client save $2.57M over the course of 18 months with factory ordering alone.
Save on costs overall
Reduce your fleet maintenance and fuel costs when older vehicles are replaced on time.
New vehicles are more fuel efficient and maintenance costs become too high when you let vehicles go past the point of their optimal vehicle replacement timeline.
Enhance fleet performance
When the right vehicles are cycled out at the right time, your fleet becomes highly productive. That means you will improve vehicle availability because the newer vehicles won’t need downtime to be repaired. Overall, it will increase your operational efficiency.
Increase driver safety and satisfaction
Newer vehicles typically have the latest technology and come with more standardized advanced safety features. This promotes better driver behavior and helps reduce accidents. Driver experience plays an important role in fleet management as happy drivers lead to higher driver retention. Newer vehicles help achieve higher driver satisfaction as they are cleaner, break down less and have better features.
Improve fleet budgeting and planning
With a proactive strategy in place, your budget forecasts are more accurate because you’re taking the time to think about every expense that could be added to your process.
When clear timelines and cost expectations are set in advance, you avoid unexpected expenses for last-minute purchases.
Reduce risks
With an acquisition strategy in place, you’re better prepared to deal with any supply chain disruptions due to unpredictable events like strikes, weather, elections, political conflicts or pandemics. It also makes your fleet more resilient against market volatility because advanced planning gives you more options.
Work towards sustainability as you reduce carbon emissions
Newer vehicles are more fuel efficient, bringing you one step closer to lowering your greenhouse gas (GHG) impact.
With lowered fleet emissions, you’ll be working towards reaching government targets for compliance.
Another strategy is to take the savings from a lowered fuel budget and put that towards transitioning a part of your fleet over to EVs or hybrid vehicles.
Improve sustainability with EVs and hybrid electric vehicles
OEMs plan to roll out new electric models on the market each year into 2030, featuring better batteries for longer trips and faster charging.
There's increasing demand for electric fleet vehicles, including vans, pick-ups, and bigger trucks, not just cars and SUVs. There will be more electric choices available, like vehicles that are partially or fully electric, and medium-heavy duty vehicles that use cleaner fuels like biodiesel.
Average fleet acquisition timeline
5 key components of the fleet acquisition process
To build a successful fleet acquisition strategy, focus on these key factors:
- Fleet demand forecasting
The foundation of any acquisition strategy looks at past data and market indicators to predict when the demand for fleet inventory will peak. This will help you decide the quantity and types of vehicles needed, avoiding both shortages and excess inventory.- Use historical data, market trends, and predictive analytics to forecast your fleet needs.
- Layer in known or expected business changes.
- Supplier relationships
Establish strong relationships with reliable suppliers. Engage in regular communication and negotiate long-term contracts where possible.
Doing so:- Ensures better pricing and terms.
- Provides access to a wider range of vehicles and faster delivery times.
- Offers different avenues when needing to execute contingency plans.
- Total cost of ownership (TCO) analysis of your fleet
Conduct a TCO analysis to help select vehicles that offer the best value over their lifespan, rather than just the lowest upfront cost.
Understand the full lifecycle costs of each vehicle, including:- Purchase price
- Fuel costs
- Maintenance
- The depreciation curve in relation to resale value
- Fleet vehicle selection and specification
It is important to:- Choose fleet vehicles that meet your operational needs while being cost-effective.
- Include factors such as payload capacity and cargo, durability, and driver safety and satisfaction.
- Consider driver paid options like leather seats that will enhance driver comfort.
- Consider fuel efficiency and the possibility of switching some units to alternative fuel options.
- Involve stakeholders from all departments to ensure requirements are met.
- Procurement processes and policies
Develop clear acquisition processes and policies to streamline your operations.- Define roles and responsibilities for drivers such as: personal use of vehicles, consequences of violations, cell phone policy, etc.
- Set up approval workflows for: accident procedures, MVR checks, emergency contacts, etc.
- Use telematics with fleet software to increase efficiency and reduce human error.
7 steps to develop a fleet acquisition strategy
Creating a comprehensive fleet acquisition strategy involves several steps:
- Assess your current fleet and set goals
- Review your existing fleet performance and find areas for improvement.
- Set clear goals, such as reducing costs, improving fuel efficiency, or enhancing vehicle uptime.
- Conduct a needs analysis
Calculate the optimal number and type of fleet vehicles needed in the coming year. It is key to first define what the minimum requirements are for a vehicle to perform the job.
This utilization analysis will help improve fleet efficiency, particularly in response to business growth or shrinkage.
Determine your fleet requirements based on:- Operational demands
- Route optimization
- Lowering carbon emissions
- Safety and driver satisfaction
- Develop a procurement plan
- Make sure your acquisition timeline includes key milestones and deadlines to keep you on track.
- Let key stakeholders know about the timeline.
- Identify potential suppliers and request quotes or proposals.
- Evaluate and select fleet vehicle suppliers
- Assess suppliers based on criteria such as reliability, cost, delivery times, and after-sales support.
- Negotiate favorable terms and finalize contracts.
- Implement your acquisition strategy
- Plan ahead to account for timely ordering and vehicle delivery.
- Factory orders could take anywhere from 3 to 10 months to get delivered.
- Stock orders may be faster, but they will cost you much more.
- Monitor the process and adjust as needed.
- Plan ahead to account for timely ordering and vehicle delivery.
- Track your fleet orders with technology
- Use connected solutions to monitor where your order is in the process.
- Track what stage your build is in to manage delivery expectations.
- Review and optimize your fleet strategy
- Gather feedback from stakeholders and adjust the strategy to address any issues or opportunities for improvement.
- Review utilization analysis to improve efficiency.
Once you’ve replaced your older assets, planning the best way to dispose of them is your next step. We can help you remarket your vehicles to gain the highest price in the shortest amount of time.
Common challenges faced in fleet acquisition
Due to the evolution of the industry, fleet acquisition can be a daunting task. We can help you overcome the following:
- Regulatory compliance: Changes in regulations and standards require constant attention.
- Keeping up with constant changes in specs and new vehicle options.
- Finding replacements for vehicles getting phased out of production.
- Supply chain disruptions.
The advantage of fleet acquisition services
Fleet acquisition is more than just buying vehicles—it's about creating a strategy that enhances your overall operations.
Managing your fleet effectively demands careful planning and budgeting. Strategic sourcing will help prevent the extra costs that can stack up from last-minute purchases.
Meet your current operational needs and align with your future business goals, ensuring your fleet is balanced and runs smoothly.
How we can help you
- Advanced analytics: Cutting-edge data that forecasts demand, improves TCO, and selects the best vehicles for your fleet.
- Supplier management: Favorable terms and faster delivery times because of our strong relationships with leading suppliers.
- Ongoing support: Guidance to help achieve your fleet goals from the first stages to final delivery of your vehicles and beyond.
- Trusted experts: Personalized advice tailored to your needs from our proactive advisors.
Ready to transform your fleet acquisition strategy? Get started today.
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