DESCARTES™

2018 Fleet Management

Strategies of Top Performers

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Descartes Fleet Management Benchmark Study Findings

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The role and value of the fleet is continually evolving as more companies are recognizing its ability to provide a competitive advantage, enhance customer service and drive growth.

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This 2018 Descartes benchmark study identifies key trends and practices impacting fleet management and reveals the strategies, tactics and technology implications of leading operators. We also explore the relationship between management’s view of the strategic importance and a company’s financial performance.

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Who We Surveyed

130 respondents participated in the 2018 survey representing different industries, geographic areas of operation and fleet size/type. Here’s a snapshot of that information:

INDUSTRY BREAKDOWN

• Manufacturers, retailers and distributors account for 43% of respondents.
• The remainder operate in mobile/field services (7%) and the public sector (2%).

LOCATION OF OPERATIONS

• While a majority of respondents (55%) operate in the U.S., there was also significant participation from companies operating in Europe (34%).

FLEET TYPE AND SIZE

• Private (49%)
• Combination (29%)

• 1000 vehicles (10%)

• Nearly two-thirds (65%) of survey respondents have fleets ranging from less than 25 to 100 vehicles.
• Almost half (48%) of respondents work for organizations that exclusively operate private fleets.

How We Analyzed Results

We took a look at the survey results from two perspectives and to analyze the results from both perspectives, we consolidated findings into two groups each: Financial Leaders vs. Financial Followers and Competitive/Differentiator vs. Basic/Necessary.

• Industry leading (23%)
• Average (37%)
• Middle of the pack (34%)
• Bottom performer (1%)

First, we asked respondents to rate their company’s overall financial performance.

SURVEY INSIGHT

There is a compelling correlation between the strategic importance management places on the fleet and how well a company performs financially.

Additional findings revealed:

• The majority of companies who view transportation as a competitive weapon or service differentiator (70%) are also Financial Leaders.
• Similarly, almost two-thirds (65%) of companies rated as Financial Leaders were also identified as Competitive Weapon/Customer Service Differentiator companies.

Key Trends & Practices

Increased Focus on Changing Customer Demands

Respondents were asked a series of questions to learn more about industry trends and business challenges affecting fleet management.

FUTURE IMPACTS

It’s not surprising that "more demanding customers" received the second-highest ranking from respondents. This is likely a reaction to changing customer expectations being driven by their online experience in B2C environments. Many successful companies are responding to growing customer demands with technology solutions to expand delivery options and offer value-added services.

VALUE MEASUREMENT

75% of all respondents said their companies measure the value of the fleet based on cost effectiveness, making it the dominant measurement selected. However, it was closely followed by customer service, with Competitive/Differentiators rating service slightly above cost. Companies with a Basic/Necessary strategic view of the fleet ranked customer service 22% lower than cost.

Overall, organizations focused on traditional metrics such as cost may be missing significant opportunities for the fleet to create value competitively and contribute to revenue growth.

SURVEY INSIGHTS

• The driver shortage continues to be a top-of-mind concern, motivating top-performers to get the most out of available drivers and improve fleet productivity.
• By ranking HOS/ELD compliance as a future concern, 27% of laggard organizations suggest they are still ill-prepared to meet driver mandates.

Internal Hurdles and External Pressures

Operational Challenges Faced by Respondents

Survey respondents were asked to characterize the largest operational challenges they are currently facing. Reducing costs was cited by 67% of participants, keeping it at the top of the list. Managing driver performance and behavior was noted by 52% of respondents, signaling that many companies need to work on their driver management processes and technology used to capture driver activity.

• Reducing Costs
• Managing Drivers
• Increase On-Time Performance
• Eliminate Paper Process
• Reducing Delivery Time

Process and performance improvements such as going paperless and achieving tighter time windows rounded out the top five responses. Fewer respondents ranked large-scale changes including backhaul (24%) and fleet vs. for hire (18%) as top-of-mind concerns.

Competitive Outlook

When asked about their greatest competitive concerns, respondents cited offering faster deliveries and cheaper (or free) shipping as competitors’ top two strategies. Both of these strategies are indicative of the “consumerization” taking place in transportation as a result of changing customer expectations.

Key Survey Takeaways

There is a strong relationship between management’s strategic value of the fleet and a company’s financial performance.

Placing higher strategic value on the fleet results in faster growth and ultimately, better financial performance.

While cost reduction is the greatest challenge facing fleet operators today, driver shortage looms as the biggest threat over the next 5 years.

Improving productivity of the fleet is key to meeting both challenges.

Investing in technology and changing fleet operations strategy are the top ways management is preparing for major change in the future.

Top performing companies are less focused on justifying fleet IT spend and will spend more than laggards, potentially creating a competitive gap over time.

Over the next two years, the most investment will occur in Route Planning and Dispatch & Tracking, cited as the most important capabilities for effective fleet management.

Descartes’ Routing, Mobile & Telematics Suite

UNIFYING CRITICAL FLEET MANAGEMENT PROCESSES

If you operate a commercial fleet or manage mobile workers in the field, you’re tasked with improving the productivity, performance and safety of your operations. With integrated route planning, route execution, mobile applications and vehicle telematics, Descartes offers the industry’s most comprehensive fleet and mobile resource management solutions.

• Create delivery appointments and plans that best serve customers while minimizing costs;
• Reduce miles driven and fuel, labor and vehicle costs;
• Meet Electronic Logging Device (ELD)-based reporting requirements;
• Instantly capture and distribute customer data from the field;
• Ensure plans are being executed in the field and address changes in real time.