Fleet managers expect major changes in the year ahead
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 percent) state that new technology poses the biggest challenge for their fleet in the upcoming year, according to a survey released today 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 percent 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 percent) would like to incorporate alternative fuel within the next three to five years. An additional 21 percent 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 percent of respondents anticipate making significant adjustments to their fleet composition to address these priorities. Seventeen percent 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 percent of respondents anticipate shipping volume to remain level, or even decrease, 33 percent 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; fifty percent 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.
About TD Bank, America's Most Convenient Bank®
TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S., providing more than 9 million customers with a full range of retail, small business and commercial banking products and services at more than 1,200 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Bank and its subsidiaries offer customized private banking and wealth management services through TD Wealth®, and vehicle financing and dealer commercial services through TD Auto Finance. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Twitter at www.twitter.com/TDBank_US.
TD Bank, America's Most Convenient Bank, is a member of TD Bank Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD". To learn more, visit www.td.com/us.
TD Bank VP, Corporate Communications Manager