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Fleet Advantage’s Industry Benchmarking Survey Highlights New Trends

November 15, 2023, 07:00 AM
Filed Under: Fleet Financing

Fleet Advantage, an innovator in specialty financing, fleet data analytics, fleet management services, and life cycle cost management, announced results from its latest industry benchmark survey where the company took the pulse of industry leaders on topics ranging from equipment utilization and operational trends; preferred financing methods; alternate fuel trucks; and barriers to adoption of alternate fuel trucks.

Continued Emphasis on Shorter Truck Life Cycles

The majority of respondents (59 percent) indicated they are operating their trucks five years or less before replacement, which continues to support today’s greater focus on shortening asset life cycles. This number was also 59 percent last year, up from 45 percent two years ago. This also coincides with most respondents (40.7 percent) listing improved fuel economy as the top motivating factor in securing new trucks, followed by lower maintenance and repair expenses (33.3 percent), both being benefits of shortening truck life cycles. Another 18.5 percent mentioned they are focused on right-sizing the number of trucks in their fleet to align with economic conditions. Furthermore, slightly more than a quarter of respondents (25.9 percent) said they feel today’s higher costs of fuel, maintenance and borrowing make long-term contracts less attractive.

Fleet respondents also noted they were reducing their life cycles as more than half of respondents (51.9 percent) indicated they have the fewest number of trucks in their fleet model years 2018 or older.

Alternate Fuel Truck Adoption Trends

Last February we asked which type of alternate fuel trucks fleets are most interested in. In that survey, 65 percent of respondents said they were most interested in electric trucks, while 15 percent cited hydrogen and 25 percent CNG. Forty-five percent of the respondents also noted that the time frame to deploy alternative fuel trucks would be 5-10 years.

In the current survey those numbers are shifting, with 33.3 percent indicating EV over the next 5-7 years (29.6 percent saying another 10 years), and 38.5 percent indicating hydrogen. This timetable for electric truck adoption continues to change, as just two years ago the majority (54 percent) said they didn’t plan to deploy electric trucks for 5-10 years. Also interesting is that the most recent survey shows that roughly 25 percent of fleets still do not see the value in adopting electric nor hydrogen trucks, respectively. All of this change reinforces the fact that fleets have unique timelines in how they wish to bridge over to alternate fuels.

As more legislation is introduced to mandate the movement toward zero-emission vehicles, fleets are monitoring how these mandates may impact their near-term truck procurement plans. According to the survey, 59 percent of respondents are either expediting their procurement plans because of CARB pre-buy, or they are closely monitoring to see how it may alter their plans.

Organizations with Transportation Fleets Need Tools to Calculate Total Cost of Ownership

Calculating the total cost of ownership, and visibility into overall ROI satisfaction continues to be a major challenge and a barrier to further alternate fuel adoption plans for many fleet executives. Costs and ROI calculations on alternate fuel trucks are still concerning to nearly 90 percent of fleet executives. In fact, 44 percent of respondents said they do not currently have a proper way of fully calculating all costs involved with alternative fuel trucks, and another 44 percent said they are not yet satisfied there will be a decent ROI on these vehicles. Twenty-two percent cited unknown resale values, life expectancy, range and fueling infrastructure, weight and distance, and unproven technology as other barriers to adoption.

However, when asked what type of financing options would make the most sense for adopting alternate fuel trucks, 52 percent said they would prefer a lease finance structure.

A large reason why many fleets have different timelines in alternate fuel adoption is simply because all fleets have a unique adoption “bridge” to cross. To help provide confidence in their decision making, Fleet Advantage earlier this year introduced EVAN (Electric Vehicle Analytic Navigator). The tool compares diesel versus an electric class 8 vehicle TCO, with modeling that evaluates fuel and mileage data versus kWh comparisons from the first year through a six-year life cycle.

“It continues to be clear that business agility, financial flexibility, and a strategic eye toward future fuel options remain front and center for companies with transportation fleets and for-hire fleets,” said Brian Antonellis, CTP, Senior Vice President of Fleet Operations, for Fleet Advantage. “Over the years our industry benchmarking surveys have been a great tool to identify trends and microtrends that are important to our industry’s decision makers. This year is no different, as we’re seeing the bridge to alternate fuel technology continue to shrink, and now fleets are beginning to realize they need the right analytic tools to identify the adoption time that makes the most sense for their organizations.”   

Click here to download the complete data infographic.

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