David Brennan, CEO at Nexus Vehicle Rental, explores how rental can play a key role in the running of an efficient commercial fleet.
The commercial vehicle (CV) industry faces several challenges over the next few years and fleet operators want to know where the market is heading. The industry is the backbone to the UK economy with vehicles facilitating the movement of people, assets and goods, keeping the economy stable.
With ongoing economic and political uncertainty surrounding the proposed 2040 petrol diesel ban and Brexit affecting business confidence, fleets are looking to minimise costs and secure their operations. The Society for Motor Manufacturers and Traders (SMMT) reported a 16.7% fall in commercial vehicle manufacturing year-on-year in 2017, with domestic demand at its lowest since 2009. This signals a reluctance to invest in new CVs.
One increasingly attractive option for accessing vehicles, which offers flexibility and protection against market fluctuations, is rental. In this feature, I outline the benefits of incorporating rental into your mobility supply chain.
Despite improving business confidence, according to the Institute of Directors (IoD), the fleet and commercial vehicle industry will continue to be the lifeblood of the UK. According to the latest research from the SMMT, nine in ten British consumers believe reduced CV services would significantly affect their quality of life and the economy relies heavily on the sector. With many fleets now turning to a blended mobility solution incorporating a varied range of funding methods, rental should be considered as a key part of this mix due to the flexibility, reliability and affordability it provides.
Although rental is often seen as a short-term solution, fleets are increasingly turning to rental for daily, medium and long-term use to safeguard against market uncertainty. Purchasing assets outright is expensive and specialist vehicles and CVs depreciate extremely quickly. Similarly, leasing the right vehicles can be time-consuming and fleet operators can be tied into long-term contracts. Rental offers flexibility, meaning you only need to pay for vehicles when needed, minimising costs and enabling fleet capacity to be rapidly scaled up to cope with peak periods.
In a deadline-driven industry, the right distribution channels are essential and it’s paramount to have access to a strong supply chain to avoid downtime. Nexus, for example, provides customers access to the UK’s largest supply chain of over 550,000 vehicles, including 150,000 specialist and commercial vehicles and HGVs, providing any vehicle, anytime, anywhere.
Aging fleets tend to be less reliable and their upkeep can carry significant cost. Utilising specialist vehicles on projects and getting them to the right place at the right time also carries operational challenges. As a result, more companies are being attracted by the benefits of rental, where vehicles tend to be newer and better maintained, minimising downtime and reducing costs. Providers such as Nexus can also cater for specialist features and modifications such as tail lifts, tow bars, racking, chevrons and beacons, providing the right tools for any job.
With the industry moving rapidly, commercial fleet operators should be embracing technology to stay ahead of the game. Multi-point IT interaction, and the smartphone in particular, has opened up new channels of mobility, enabling quick and easy access to vehicles for flexible business use.
Rental companies now have to offer new technology and mobility services as part of their offering to ensure they can remain competitive. Nexus’ unique rental booking and management portal provides access to vehicles at the click of a mouse or via smartphone. Along with this, a market-leading Management Information (MI) suite provides real time data on all areas of rental, from live reservations to damage claims, streamlining administration time. The system automatically identifies the most cost-effective options for customers and outlines inefficiencies in the rental booking process, saving customers up to 20% of their rental spend each year.
With budgets increasingly being squeezed in the sector, a rental provider can offer the consultancy needed to save money in the long-term. Providers like Nexus have invested in developing market-leading technology that enables customers to scale fleet operations when needed. By providing access to the UK’s largest vehicle supply chain through one portal, Nexus’ software can source a CV today, but will just as easily be able to source an electric or autonomous vehicle, as soon as the market demands it. This investment in technology means it’s easy for customers to manage all their mobility needs in one place, through one company, keeping fleet management simple and cost-effective.
To find out more about our market-leading software, visit our technology page here.
Categorised in: Advice
This post was written by Sophie Exley
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