Why Are Fleets Choosing a More Sustainable Path?

Gretchen Reese (00:12):

Hey there. Welcome to the Fleet FYIs podcast, the weekly podcast by Utilimarc that reveals how you can make the most of your data for smarter fleet management. My name is Gretchen, and every week you'll hear from me or some of the industry's finest in candid conversations that will not only shed some light on over two decades worth of fleet data insights, but also some of the industry's hottest talking points and key metric analysis with the aim to help you better understand your fleet from every angle.

(00:52):

But before we begin, if this is the first time you've heard our show, thanks for stopping by. I'm so glad you decided to come along for the ride with us, but I've got a quick favor to ask you. Once you finish today's episode, if you could take a few minutes to leave us a review on your favorite podcasting platform, we would really appreciate it. Give us a rating, five stars, I hope, or tell us what you liked, or leave us a comment or a question about what you've heard in today's episode. If we haven't yet covered a topic that you're interested in hearing more about, let us know. We would be happy to go over it in detail in a later show.

Speaker 4 (01:35):

Hello everyone and welcome back to another episode of the Fleet FYI's podcast. How is everyone doing today? Hopefully well and good. I wanted to chat again about a topic near and dear to me, and yes, I'm back on the sustainability thread again. It really shouldn't come as a surprise by now, but I wanted to bring this topic up again because I wanted to address why fleets are actually choosing or advocating for either their department or their entire organization to choose this more sustainable path, or more so choosing a sustainable fleet strategy over something that's a little bit more conventional or relying on what we've done in the past.

(02:17):

Sustainable fleet strategy can appear in various ways for different organizations. This I'm sure we all know by now. And for some it may make sense to completely phase out internal combustion engine vehicles entirely and implement electric or hybrid alternatives, but for others, it could include the reduction of fuel consumption by smarter route planning and minimizing idle times, so still sticking with those internal combustion engines and perhaps maybe not pursuing electric straight away. However, regardless of the strategy, the common goal of fleet sustainability is twofold. First, to adopt practices that protect the wellbeing and the future of the world around us. And second, really it's to ensure the future success of your organization. So there's the profitability and longevity side that we talk about a lot on this show. This dual benefit is appealing for organizations striving to be more conscientious with their practices and comply with regulations while still reducing waste costs and overall costs internally. Let's dig in.

(03:46):

Let's start this episode off with diving a little bit deeper into some of the benefits of having a sustainable fleet. So first up, and I think this is probably pretty easy to jump to as the first piece here, is that overall, you consume less fuel. A common tactic for improving fleet sustainability is reducing fuel consumption. No surprise there. Fuel makes up one of the largest capital spends for most fleets, so one way to reduce this is to switch out internal combustion engines for electric vehicles or hydrogen alternatives. This has been a pretty kind of buzzing topic in the industry overall, but of course, this doesn't make sense for every single fleet. And though this can be a major financial uptake, the lifetime savings on fuel and maintenance ultimately offset the initial investment. Additionally, there are many nationally funded incentives and tax breaks available for fleets looking to go for a sustainable alternative, primarily electric at the moment.

(04:41):

But some of these other strategies that encourage waste reduction and cost savings are actually fleet rightsizing and car sharing. Oftentimes, fleets have far more vehicles than are actually needed to carry out operations, and rightsizing analyses can actually help determine whether vehicles are being underutilized so managers can adjust the size of the fleet accordingly. Similarly, if less vehicles could be used by implementing schedules for vehicle sharing, this could also reduce the amount of vehicles and capital that is spent on fleet initiatives, therefore adding to that profitability margin that we talked about a little bit earlier.

(05:20):

The second piece that I wanted to bring up is that fleets can operate more efficiently, in theory, when they're more sustainable. Now efficiently kind of more, I would say, pertaining to that second piece of fleet sustainability here. Smart route planning is another strategy that fleets can use for minimizing fuel consumption and improving fleet efficiency. Using telematics data, for example, fleets can optimize routes, which can save driver's time, it can decrease your fuel consumption, hitting on point number one there, and it can reduce your overall carbon footprint as well because you're driving less miles to get to the place where you need to go. It's an optimized route, so you're reducing your carbon footprint by reducing your emissions and your total miles driven. This strategy is especially effective for last mile delivery vehicles who can potentially consolidate more stops onto one route depending on vehicle load capacity, which is pretty incredible. And in addition to making operations more eco-friendly, optimizing routes make for smoother operations overall, and they can increase a fleet's workload capacity, which is great, right?

(06:24):

The third piece of this is that you can meet emissions regulations because this is going to be something that fleets, organizations, lawmakers, countries all around the world and right here in the US, we're going to be talking about this a lot and it's not going to go away anytime soon. The Paris Agreement of 2015 brought together 193 parties across the world to agree on taking action on climate change. As a result, governments at all levels are increasingly implementing emissions regulations and setting ambitious goals for upcoming decades. There's a lawmakers in the policy piece right there. Many of these policies actually include emissions testing for personal vehicles, regulations for heavy duty and commercial vehicles, mandatory reporting for the largest greenhouse gas sources as designated by the Environmental Protection Agency or the EPA, and implementing green initiatives can set up your fleet for success as stricter regulations inevitably come around. If you take preemptive measures, it'll only make it easier for your fleet to be compliant down the line and to avoid unnecessary fees for violations.

(07:30):

One city that's actually very close to my heart, as most of you know, I really enjoy London a lot, but they've actually implemented what's called a low emission zone or an ultra low emission zone. And for those of you that don't know what that is, basically it is a zone that exists within the not city of London proper because that's on the east side, but greater London as we know it. And since London is set up in zones, so zone one through nine, you have a certain area that if a vehicle goes in or out of it, it needs to meet the emissions regulatory standard for that area, whether it's ultra low, which is closer to the city center, or it's just a low emissions, which would be kind of out by Heathrow Airport in comparison to the middle of the city. Basically what it means is they're trying to lower the emissions that are in the city to clean the air for the residents and just overall make it a healthier city.

(08:21):

You're starting to see low emission zones like this pop up. The one in Oslo, Norway has been active for a very long time, but in Madrid, you're starting to see it in Los Angeles and California with their last mile delivery low emission zone. It's on a voluntary basis, but still you're starting to see it pop up.

(08:38):

There's a lot of pieces that are coming together to meet these emissions regulations, and a lot of people are actually turning to greenhouse gas reporting in order to be able to not only meet these emissions goals, but also just to be able to track on them and to be transparent with their customer base on what they're going after and what they're doing.

(08:58):

Now, along those same lines, just because greenhouse gas reporting, I think you're also planning for the future when you're trying to stay on track to meet these goals, you can actually future-proof your operations when it comes to a fleet sustainability strategy when you implement it correctly. Now, a future-proofed fleet is one that is well prepared for change, and it's able to seamlessly adapt to new technologies and new policies no matter what. And this is especially critical now with the upsurge of new vehicles, green technologies, and the challenges that come with them. And managers will also confront an influx of new data sources and completely new metrics to keep track of. It should be pretty clear, I think by now to most people, that the sustainability movement is not a temporary fad. It's not going away. But it's actually the beginning of a major transition within the automotive industry and actually around the world, no matter what industry you're in. And fleets that embrace this, I think, will have an easier time adapting to the inevitable changes that we'll see coming up in the next few years.

(10:02):

Now, there is a way that you can actually support sustainability with data, and this is my favorite way to delve into the topic actually, because at the end of the day, sustainability should be a top priority for every fleet manager striving for long term success. And again, not because of the green initiatives, but overall long term success, longevity, profitability, those are all things we like, right? But anyways, whichever strategy or technologies that you choose to implement, one tool will play a crucial role in an effective transition, and that just so happens to be fleet data. When streamlined into a business intelligence platform, for example, data sources like Telematics, Fleet Management Information Systems, or FMIS, fuel cards can get a deeper look at what's going on within a fleet. And these data insights help fleet managers to quickly identify opportunities for waste reduction, track greenhouse gas emissions over time, and understand the impact of introducing electric vehicles or higher gen alternatives.

(11:31):

Now to successfully move forward as a sustainable fleet, reporting on the impact and improvement your fleet has made will be an important factor. I'd love to know what you think, though. How do you feel about sustainable fleet strategy? Do you feel it's best navigated with database initiatives or navigated by new policies, so policy led or data led? Let me know. You can send me an email, tag me on LinkedIn, or use the hashtag Utilimarc Fleet FYIs, send me a carrier pigeon if you feel like it. You know the drill by now. Anyways, I am looking forward to hearing what you think, and that is it for me today. I will chat to you again next Friday.

(12:12):

Hey there. I think this is the time that I should cue the virtual high five because you've just finished listening to another episode of the Fleet FYI's podcast. If you're already wanting more content, head over to utilimarc.com, which is Utilimarc with a C, U-T-I-L-I-M-A-R-C.com for this episode's show notes and extra insights coming straight from our analyst to you. That's all from me this week, so until next time, I'll catch you later.