Fleet Advantage Survey Shows Increasing Use of Leasing for Commercial Fleets
FEB 9, 2023 - 7:20 am
Fleet Advantage released its latest industry benchmarking survey, which took the pulse of fleet industry leaders on topics ranging from the use of alternate-fuel trucks, equipment finance trends and strategies for environment, social and governance (ESG).
Fleet Advantage executives will be discussing the results and providing various complimentary fleet analyses and audits at the upcoming American Trucking Association’s Technology & Maintenance Council Annual Meeting & Transportation Technology from Feb. 27 to March 2 in Orlando, FL.
More interest in battery electric vehicles (BEVs)
Among the many important topics discussed, 40% of respondents said they plan to deploy alternate fuel trucks within the next one to two years. This is a stark comparison to just a year ago when 54% said they plan to deploy alternate-fuel trucks within five to 10 years. Sixty-five percent of respondents this year said they are looking to deploy battery electric trucks, compared to the previous benchmark survey in 2021 when only 3% of executives said they were procuring electric trucks. Fleet Advantage recently announced plans to place orders for 200 EV Class 8 tractors for deliveries commencing in calendar year 2023.
Nearly half of respondents are now leasing their trucks
The survey also addressed trends in equipment financing, with 42% of respondents saying they are leasing their trucks, compared with 58% in a cash or finance situation. This is a significant jump in leasing compared with last year, when 31% said they were in a lease structure, and up from just 14% two years ago. However, flexibility is a growing trend as 33% said they are locked into their current financing situation and have little negotiating room. This underscores the importance of data analytics such as a lease vs. purchase or unbundled vs. full-service lease comparisons in the planning and procurement of truck acquisition, where unbundled lease structures offer companies the highest level of flexibility, especially when market conditions, fuel and interest rates experience volatility.
As a way to more closely understand financial flexibility, organizations need to monitor additional key financial metrics to analyze their total cost of ownership including:
Sales Tax analysis
Comparative Cost Analysis to determine the optimal time to upgrade equipment, etc.
Per unit P&L
OEM Equipment Cost Tracking
Predictive Life Cycle Modeling
Maintenance and repair (M&R) trends continue to be top-of-mind for fleet executives in this year’s survey. Seventy-four percent of respondents said they are conducting maintenance in-house, an increase from 63% from a year earlier.
Greater focus on ESG results in shorter truck life cycles
Fifty-nine percent of respondents also indicated they are operating their trucks five years or less before replacement, which coincides with today’s greater corporate focus on ESG. This number is up from 45% in the previous benchmarking survey. This trend is a testament to today’s corporate focus on protecting the environment, with roughly 60% of fleets shortening their truck life cycle even during the current difficult economic and truck procurement climate.
“The current economic climate continues to present many challenges for fleets all over the country, which is why flexibility is a necessary business and financial strategy to meet corporate and ESG goals in the years ahead,” Hadley Benton, executive vice president of business development for Fleet Advantage, said. “Our latest benchmarking study illustrates not only the staunch need for this flexibility, but it also reiterates how companies are changing their philosophies, and now have a growing desire to work with asset management partners who offer the right programs that benefit all aspects of their organization to meet short- and long-term goals.”
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