Gretchen Reese (00:06):

Hey there. Welcome to Fleet FYIs, 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 and some of the industry's finest in candid conversations that will shed some light on not only two decades worth of data insights, but 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. 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've finished 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. But 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 episode. If that sounds good to you, let's get back to the show.

Gretchen Reese (01:11):

Hi everyone. And welcome back to another episode of the Fleet FYIs podcast. We're back yet again with another episode about turning to your data before you begin to expand your fleet, which may sound a little vague, but bear with me here. We all know that understanding your fleet's data is vital. It's a core part of running an effective fleet. It was yesterday. It will be tomorrow and for many days, months, and years into the future. And this is especially true as new technologies are constantly emerging and you're looking to say, perhaps improve cost efficiencies, or maybe you're looking to implement new programs of acquisition and adoption. The list goes on, but the question is where do you even begin? Because some of this can seem like a bit of a daunting task.

Gretchen Reese (02:05):

Well, to answer that question, we've brought back yet again, Utilimarc senior analyst, Paul Milner to the show for another episode. And today, he's giving us a high level overview of not only new technology acquisition, but also how costs can compare and one thing that you must always consider before any new technology ad. Let's hear what he had to say.

Gretchen Reese (02:35):

Okay. So today I wanted to get back on the topic of new technology, which I think is always relevant as there are consistently newly evolving technologies emerging year over year, and always a need to maintain optimal fleet size for your organization. So I'm curious, Paul, what do you think is the most important of adopting new technology for your fleet?

Paul Milner (03:04):

Sure. And kind of like just a disclaimer at the start because maybe I'm just a humble guy, but I don't consider myself an expert on some of these technology or I guess change management might be the business term for it, but we've gone through this process with a lot of fleet in changing fleet management systems, adopting telematics, doing all different kinds of implementations of analytics. So this is kind of like the advice I would give as part of the lessons that we've learned by walking through kind of side by side with clients and what we've learned about being successful or not successful when we're doing these types of implementations.

Paul Milner (03:44):

So with that disclaimer out of the way, I think probably the biggest thing is to start slow and I liked this both as a runner and as an analyst, right? So when you're kind of implementing the new technology, you really want to make sure that you're keeping your goals in mind and your scope kind of narrow to what's most important for the business. I think a lot of times enthusiasm can kill a project if you wind up taking on too much and trying to do too much at a single time. So from a metrics perspective, I think it's really focusing on what decision is this new data going to help the manager or the supervisor or the mechanic make on a day to day basis and really putting all of your effort ensuring that the data quality meets the representation of the information needs those days from kind of start to finish.

Paul Milner (04:50):

On kind of the hardware side, I think running a pilot is the best advice and you want to kind of play a balancing game in terms of implementing that pilot because you don't want to test so many new units or new devices that you're going to kind of interrupt and impact the business that things fail, but you also want to test enough that you actually do see those types of failures because you want to make sure that one, the technology works and then two, it also gives you an opportunity to kind of test the supplier's customer service. If there are interruptions, then there probably will be at some point. How do they respond to that and how do they help you through that process? But yeah. In running and in business, not enough I think can be said about starting slow with new technology.

Gretchen Reese (05:43):

Mm-hmm (affirmative). So then how do you see some of the fleets that say, for example, Utilimarc works with and more specifically utility and municipality fleets? How do you see them adapting newer technologies like hybrid or electric vehicles?

Paul Milner (06:01):

Yeah. So there's certainly a big effort right now in the utility space to adopt ED technology. I think a lot of the clients that we've worked with have made commitments to electrify their fleet by like 2030, which is kind of amazing because not a lot of those trucks actually [inaudible 00:06:22]. There's not a lot of replacements for an EV heavy duty bucket right now, but the kind of the renewed initiative right now is the EV pickup trucks, right? So we've had EVs sedans for years now, but that's not really a big class for our utility clients, so they've kind of largely ignored that sort of effort. But now that the pickup truck, which is a more bread and butter truck for the utility industry, they're kind of jumping all over that. Our municipal clients have been more involved with adapting alternative technologies around hybrid rather than the EVs kind of the entire way around. Not to hate on the utilities. There's just, I think, a more applicable technology in that space. So like we've seen folks running CNG and electric buses and like waste vehicles, garbage trucks. Depending on where you are, there's been a lot of municipalities who have been embracing this technology all along and I think will just continue to embrace that technology.

Gretchen Reese (07:29):

Mm-hmm (affirmative). You want to know what I find really interesting is that I had read an article, maybe it was two or three weeks ago where they were talking about mail vehicles, like the USPS or even something like DHL, where they were saying that these male fleet vehicles, they're actually almost this perfect pilot to test out because since they operate at such low speeds and then also they frequently stopped the regeneration for the battery is much more apt to be effective there. And it's kind of fascinating just how these different industries can truly make the most of a new technology simply just by doing what they would normally do on a day-to-day basis, don't you think?

Paul Milner (08:08):

Yeah. And it's goofy because it's almost the opposite advantage of the traditional combustion engine. The traditional combustion engine is really inefficient in urban environment because the stopping and starting just kind of kills your MPG, right? But the EV one, you almost have the opposite, right? The starting and stopping recharges your battery and actually allows you to do better. So it's kind of goofy. I think the other thing for those types of delivery style vehicles is that a lot of time they reach the volume limit on the truck before they reached the weight limit on the truck. That's not true for our utility clients. And I think a big part of the problem if you're talking about like a first responder bucket truck for a utility company, that vehicle on an F550 chassis is already running on max weight, and there's no room for added battery technology. So it'll be interesting in the long run for EV on those types of vehicles. Does that mean that the first responder bucket is going to go up a chassis in order to accommodate the extra weight associated with the batteries on the EV engine? I don't know. It's kind of going to be interesting to see how they try to solve that problem.

Gretchen Reese (09:31):

Mm-hmm (affirmative). I think it will be fascinating too because I think... What's the metric for miles per gallon, but equivalent to EV? Isn't it MPGe? Is that the correct term where they were talking about how this MPGe can actually severely decrease depending on the actual weight of the vehicle and then also once you have people inside it, and then if you're running the heat or the cooling system? That can all put excess strain on the battery, which could then decrease your battery capabilities as a whole just in general, if, depending on the vehicle you're using. So there's so many more factors that go into it, kind of like you're saying like, how is that problem going to be solved in terms of total range and being able to truly measure which is more efficient for the different types of vehicles.

Paul Milner (10:17):

Yeah. So the OEMs are advertising now as I understand it, the unloaded range of those vehicles and there's anecdotal evidence like you've got folks who use their sedans to kind of pull their boat to the lake over the weekend and they see their EV range go down 50 to 60% once they're towing that vehicle. So what that data's actually going to look like, we're not really going to know until these vehicles start hitting the road, but I think fleet managers are aware of that. So it's not just kind of covering your ideal use pattern, but also accounting for, if you're pulling something, if you've got tools in the truck and all the other type of stuff. It's a pretty complicated problem honestly.

Gretchen Reese (11:11):

Mm-hmm (affirmative). Absolutely. So you had mentioned it a little bit in the beginning, but so when we're talking about these EVs and hybrids, because there's so much anecdotal data surrounding it, there's a lot of what ifs, there's a lot of, "Oh, this could happen," but there's not a lot of concrete evidence of this is what's going to happen if you do X, Y or Z. How would you recommend an implementation be started? You had mentioned a pilot, but is that the only piece that you're looking at or do you need to really get your stakeholders onboard too?

Paul Milner (11:45):

So the start is going to be making sure you kind of do your own homework, but at that point, I'm kind of assuming you've already done that and see the ROI for your organization. At that point, you really want to work on getting user buy-in. And that kind of goes in two directions, one that goes up the food chain. You want to make sure that the executives are onboard, that they understand what you're doing, that they're approving everything. And I think there's kind of two things. One, you want to make sure the project doesn't get steamrolled by whatever the next initiative is. And on the other side, I think that works as a pretty good litmus test for making sure that the project that you're working on is kind of worth the cost, the time investment, and the social capital.

Paul Milner (12:31):

And I think kind of making that pitch upward helps in all of that. And a lot of these mandates on the EV side are coming from the top down anyway, so I don't think that argument can be that difficult for that type of technology, but it also kind of goes downstream as well, that you want to make sure that you're communicating to the end users. They're doing a good job of explaining why and how this technology is being implemented and what change that that means for the business and then also being open to the feedback from the users. And that applies from on the EV side. It applies on any analytics, if you're doing driver safety, making sure that you're explaining what you're doing, why you're doing because it is ultimately going to impact their workload.

Gretchen Reese (13:24):

Mm-hmm (affirmative). Absolutely. And another thing that's come up just in multiple conversations and multiple content pieces, panels everywhere, a huge portion of getting people off of the fence and ready to take on this new technology is pricing. I mean, it's a huge factor, especially when budgets are a bit tighter especially after COVID and everything that this last year has brought. So how would you say, for example because you mentioned cost a little bit, but how does the overall cost of an EV... and we're talking high level here, how does that look in comparison to that of an internal combustion vehicle right now?

Paul Milner (14:03):

So I think part of the reason that we're seeing the initiatives today is that the cost has started to break even between the two types of vehicles. And I think that's why a lot of the folks are finally pulling the trigger and why the OEMs are actually finally starting to mass produce these vehicles. So when we know that the EV cost, the acquisition cost of the EV vehicle is going to be much higher, but the expectation is that the maintenance costs are going to be much lower. And I've seen estimates. I think I've seen folks like fleet managers are working on the assumption that they'll see a 30% reduction in their maintenance costs, whether that's kind of early extracted number, but it stems from the idea that the EV engine, the RMF engine, which I think is rotating magnetic field... I don't know, is much simpler than the traditional combustion engine.

Paul Milner (14:56):

There's less moving parts to kind of translate that vertical motion of the piston to the rotating motion of the wheels in a combustion engine, whereas on the EV vehicle, you just straight up have that RMF engine. And so historically, then the problem has been that the battery packs were too expensive and that's what's keeping the price of the EV vehicles high on the front-end. I think that's something that's going to continue to go down as these vehicles are mass produced. So in the long run, I'd expect the total cost of ownership on the EV vehicles is going to ultimately out-perform the combustion engine vehicles.

Gretchen Reese (15:36):

Yeah. It'll definitely be interesting to monitor that. But how do you think... I guess the best way to phrase this is in terms of measuring success aside from cost? Cost is one factor, but I'm sure there's more. How do you think that fleets will be able to measure success with these new upcoming technology ads?

Paul Milner (15:55):

Yeah. So it'll depend on your project pretty heavily. If you're implementing telematics for utilization or driver's safety or if it's an EV effort, all of those are going to have different metrics. I think everybody when they're implementing these technologies, they have an ROI in mind and they probably already done that type of calculation just to justify the move and the pitch. But I think a mistake that a lot of folks make is not setting up the metrics and the data structures to continue to track that ROI moving forward.

Paul Milner (16:35):

Because I think really you need to make sure that you have your ROI in mind and what you're projecting the ROI to be, but you need to make sure that you're tracking anticipated versus actual ROI. And that can really help you kind of one, you can pat yourself on the back for actually saying that this is the value I've actually delivered, but it's also going to defend the project when there is additional overhead or there's different issues that go through the implementation process and other headaches. Being able to reference that information and say, "No, this really is something that's good for the business and we want to keep doing it," having that front end fork ready and being able to track the success of that project is really important.

Gretchen Reese (17:21):

Mm-hmm (affirmative). Yeah, I think there's so much coming out of this and this is true for any new technologies, but we've been focusing on EV just as they're kind of a, I guess you could call it a hot industry topic at the moment. There's so much to monitor, like what you were speaking about then and also with cost and the depreciation factor and overall just comparisons between that and your traditional fleet vehicles that you've been seeing. So as fleet start to embrace these new technologies, I think it'll be kind of cool to see what that could mean for operational efficiency going forward. I'm not sure if you're onboard with me on that one, but just out of curiosity, do you think that end users like the people that will be interacting with these new technologies within the organization, no matter what their level of interaction is, how fast do you think there'll be to get onboard with this? Do you think it will be something where they need a little bit of encouragement before it's two feet in or do you think there'll be jumping straight in straight away?

Paul Milner (18:19):

I think a lot of that comes into user bias again and making sure that you're communicating to operators why you're moving in the direction that you're moving. If it's well communicated, I think a switch from gas to EV could be very smoothly. If you replaced someone's vehicle overnight, you're probably going to wind up with some headaches and I think we've seen some of this kind of data play out in the past as well. Sedans aren't a huge truck in the utility space, but for the client who have started to implement some EV [inaudible 00:19:01], it's actually been interesting to watch the utilization of those assets over the past five to 10 years.

Paul Milner (19:08):

And what we've actually seen is that the EV vehicles get something like 30 to 40% of the utilization of the vehicle. And we've even seen a particular client who hadn't purchased a new combustion engine sedan in eight to 10 years and yet, the eight to 10 year old combustion engine vehicles were still getting more miles than the EV vehicles, the brand new EV vehicles. So that to me really shows that there's kind of a people problem and a perception problem on those assets that they needed to make sure that they addressed as an organization to get folks comfortable in driving those new vehicles.

Gretchen Reese (19:53):

Hmm. Yeah, definitely an interesting aspect of that. So what do you think is one thing you're most looking forward to seeing come out of this, whether it's EV related, hybrid related, cost analysis? What do you think?

Paul Milner (20:11):

The exciting part for me as an analyst is this is like our jam, right? This is where we go out and shine and kind of do our analysis and make sure we're using it to help improve the organization. So there's kind of an old, funny adage that an analyst doesn't do anything. We're out here making reports and doing all the data, but it's ultimately to the fleet managers and the users to take the action. But when you're kind of switching technologies, it's the perfect opportunity for us to really see our work play out and impact the business, especially if we're the ones helping advocate for specific technology over another and helping them monitor and implement that success. So from that perspective, it's just kind of a fun time to be an analyst. But I think the EV vehicle is a really interesting technology and I think seeing how that plays out actually in application is also just going to be really interesting.

Gretchen Reese (21:11):

Oh, what a time to love mathematics huh, don't you think?

Paul Milner (21:16):

It's always a good time to be a mathematician.

Gretchen Reese (21:20):

Oh dear. So Paul, is there anything else you'd like to add about new technologies or user buy-in, stakeholders, approval? Anything else you'd like to add before we wrap up?

Paul Milner (21:31):

Yeah. I think kind of the last thing is... and these are kind of... So it's always important as they're doing these processes, these changes for your organization to keep the end user behavior in mind. I think one of my favorite... this isn't an anecdote. It's a real story, but it's kind of told almost as a myth but in the BI space is there was a call center that wanted to make sure that their respondents were being efficient when they were helping out their customers. So they actually set a threshold for each caller that they were only supposed to spend a certain amount of time on average on a call during the week. And as a result of that, a bunch of very clever support specialists would just say, "Hello," and then immediately hang up on their callers to pull down their average call time and make sure that they met that business wide threshold.

Paul Milner (22:31):

So you got to keep that kind of behavior in mind. So we've had stories on the fleet side of drivers who, after they implemented the telematics devices for the safety scorecards, they turned on the beeping. So if the driver was driving over a certain mile per hour for a certain amount of time, the device would start to beep. Well, the driver's behavior of that was to unplug the device because the beeping was annoying, which kind of defeats the whole purpose of installing telematics.

Paul Milner (23:05):

I think on the EV side, what's going to be really interesting is the fueling behavior. So you and I, and our personal vehicles and all the drivers out on fleet world have gotten kind of accustomed to being able to stop anywhere for three to five minutes and fuel up your vehicle. But the reality is for the EV vehicles, even the fastest charters are still requiring 30 to 60 minutes in order to get that vehicle fueled up to 80 or 100% depending on the size of the truck itself. So that's going to actually kind of change the organization. You almost don't need to just meet the range for an individual day, but you also need to be able to plan the refueling of those vehicles. And we've looked into some of the data and what we've seen is that most of the folks with their traditional vehicles today are refueling their vehicles at 40 to 50% empty, so they're not driving the vehicle all the way to empty. They tend to be refueling much sooner than that. And what impact is that going to have when we start looking to the EV technology if they're uncomfortable driving when that EV range is at 20 to 15%. We're going to have to plan around that as well to make sure that they're actually comfortable out in the field.

Gretchen Reese (24:35):

Mm-hmm (affirmative). I mean, fleet vehicles aside, I feel like that's going to change road trips for everybody now, if they have their personal EVs and then you have to add on another hour to travel time.

Paul Milner (24:44):

Well, I don't know about you, but I'm real comfortable in my current vehicle, letting that needle hang out on empty for a while, but it doesn't seem to be the behavior we see in the fleet industry.

Gretchen Reese (24:58):

Oh, I'm with people in fleet on that one. I can't let my car get more than a quarter of a tank to empty without saying, "Okay, now where's the nearest fuel station. I need to plan my route so I can hit one of those." I mean, the last time I was driving up to the North Shore, I was driving up to... Have you ever been to Temperance State Park? Well, it's kind of up by like Tufty and Luton, but I ended up driving past Temperance to Tufty because I knew that there was a gas station there that I could fill up my car because I only had 60 miles left and on the North shore, if you're driving up the scenic highway, there are not many gas stations. They are maybe like 60 miles apart, sometimes 40 miles apart, but if you don't know where one is, oh man. Too much stress for me. I am like one that likes to have my engine fueled all the time, all the time.

Paul Milner (25:50):

Yeah. It sounds like you're cheating. Your vehicle tells you how many miles you have left. You don't have to do any math to convert," Oh yeah. I've got a 16 gallon tank. I'm at a quarter and I get 12 to 15 mile per gallon." You don't have to do any of that?

Gretchen Reese (26:03):

No, I mean, well, granted-

Paul Milner (26:07):

You're a cheater.

Gretchen Reese (26:08):

No, I am not. My car's a 2008, but still it was one of the first ones in that particular model where they started integrating the actual like miles you have left. But once it gets to a certain one, this is the stressful bit because once it gets to like two dashes on the side because I always say it almost looks like you're leveling up in a video game, that's how my gas meter is laid out. And once you get to two dashes from the bottom, which is like maybe an eighth of a tank, it doesn't tell you how many miles you have left, it just blinks and says that you need fuel. So that's the guessing game. And that's the stressful that you're just like, "Oh God, am I running on fumes? Do I have enough to make it to the next gas station? Like what's going on?" So no guessing games on that one for me. No thanks. Oh dear. But anyways, Paul, so what would be the best place that folks can find you outside of Fleet FYIs if they want to continue chatting with you on this one?

Paul Milner (27:07):

Yeah, I guess the best way right now is just by email and I'm sure you'll put it in the description, but pmilner@utilimarc.com. I'd lose the phone number as well, but depending on where the kids are for daycare, I'm still not in the office very regularly, so email is probably best for today. Once things start getting better on COVID wise various conferences, I hope they'll start getting set back up because I kind of messed up, but for now, email is what it is.

Gretchen Reese (27:41):

Yeah, no kidding. All right. Yeah. I'll put that in the show notes, not a problem. And hopefully, we'll cross our fingers that we can start going to conferences and back into the office soon. I for one cannot wait. Oh, Paul, the mathematics lover amongst us all. I think he's certainly right when it comes to integrating new technology to your fleet though. Obviously, you can't do anything without key stakeholder buy-in because that's completely essential, especially if it's a top down new mandate or a commitment that perhaps they've made to be sustainable in the sense of being carbon neutral by 2030, or electrifying a certain part of your fleet by a certain year.

Gretchen Reese (28:31):

And the thing is slow and steady will always win the race, right? It'll help you ease into any new policies or regulations or mandates surrounding new technologies or perhaps new policies, whatever it may be and it also helps you iron out any creases surrounding how you'll measure the success of your program and also how you can measure the return of your investment. But I'd love to hear your thoughts on this topic. So if you wouldn't mind, please send me an email or get in touch on LinkedIn with the Utilimarc Fleet FYIs hashtag. I'd love to hear from you and I think it'll be really interesting to hear what you have to say, but anyways, that is all for me this week. I look forward to catching up with you again next week, same day, same place. I'll see you in your headphones next Thursday.

Gretchen Reese (29:21):

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 FYIs 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 the show notes and extra insights coming straight from our analysts to you. That's all for me this week, so until next time, I'll catch you later.