Emerging technology has continued to disrupt nearly every industry, and the transportation sector is no exception. Fleet managers expect major changes in the year ahead, as more than half (52%) state that new technology poses the biggest challenge for their fleet in the upcoming year, according to a survey released by TD Bank, America’s Most Convenient Bank®, from the NAFA Fleet Management Association 2019 Institute & Expo.
“The transportation industry is on the brink of a major transformation,” said Anthony Sasso, Head of TD Equipment Finance at TD Bank. “Traditionally, the industry has been defined by trucks and infrastructure, but the use of mobile devices, GPS, and electronics have revolutionized logistics. To stay competitive, fleet managers need the capital or funding to upgrade and acquire modern equipment.”
On the horizon: Autonomous vehicles and alternative fuels
The introduction of autonomous vehicles is anticipated to change the entire transportation industry. While adoption of these vehicles has loomed over the industry for quite some time, 61% of respondents feel autonomous trucks will become mainstream within the next decade. Self-driving vehicles increase efficiencies, deploy real-time optimization, and enhance productivity.
Additionally, the use of alternative fuels, specifically electric and liquid natural gas, is top of mind, as nearly half of respondents (45%) would like to incorporate alternative fuel within the next three to five years. An additional 21% indicated that they would like to add alternative fuel but have found it to be cost prohibitive.
Today’s priority: Managing consumer demands
Companies today are focused on providing the fast, free, and convenient delivery service that consumers demand. As a result, 84% of respondents anticipate making significant adjustments to their fleet composition to address these priorities;17% will be investing in new asset classes to ensure they can deliver items to the final destination as quickly as possible. Interestingly, even though 59% of respondents anticipate shipping volume to remain level, or even decrease, 33% are expecting to increase the size of their fleets, reflecting the need to adjust business models and change the types of vehicles in their fleet to accommodate for the new delivery patterns.
Companies are looking for flexible finance solutions that offer shorter term loans and the ability to upgrade equipment frequently; 50% of respondents indicated that they are more inclined to finance equipment acquisition through lease options. Only 10% indicated they would prefer loans.
“Over the last few years, we have seen fleet management change dramatically, largely in part to technology advancements and changing consumer demands,” said Sasso. “Our clients are looking for greater flexibility so they can successfully meet consumer expectations, maximize efficiencies, and manage demanding delivery schedules.”
TD Bank polled a select group of fleet professionals on their views of trends, challenges, and changes within the transportation industry at the annual NAFA I&E conference in Louisville, Kentucky from April 16-17, 2019. A total of 120 individuals were polled.