Our world is evolving at a rapid pace, from the way we communicate, to the way we travel, shop and order food. The fleet industry is no different. Fleet Managers are at a crossroads, with a need to be more forward-thinking than ever before.
At the same time, keeping their fleet moving between destinations while minimising operating costs is still key to keep their business running smoothly and profitably. A number of opportunities and challenges lie ahead, with three major factors set to shape the future of fleets.
The energy challenge
By 2040, it is expected that the world’s population will increase to nine billion – which is equivalent to adding twice the number of people living in Europe today. Naturally, as populations grow, energy consumption is set to rise; The International Energy Agency predicts energy demand will increase by 30% by 2040.
To respond to this growing demand in a responsible way, the future will demand not only more, but also cleaner sources of energy. Different road transport fuel options and vehicle types will be needed, and cities will be driven towards becoming smarter, more energy efficient communities.
New vehicle types
Transport now accounts for more than a quarter of the world’s total energy use and one fifth of global energy-related CO2 emissions. As different types of vehicles and journeys have different requirements, a range of fuels and engines will develop and co-exist to meet this growing demand for mobility with lower emissions.
Over the last 20 years, the variety of fuel sources available to power our vehicles has swiftly expanded. While a focus on improving the efficiency of petrol and diesel vehicles remains, since Toyota launched the Prius in the late 1990s, the world’s demand for hybrids and electric vehicles (EVs) has continued to grow.
Over 121,000 EVs are now on UK roads, while worldwide there are over 2 million on the roads. This shows no signs of slowing, with demand for electric vehicles expected to continue to rise significantly in coming decades.
Yet, currently there are too few public charging points, with less than 100,000 across the whole of Western Europe. According to Morgan Stanley’s estimates, there’s still quite a way to go – they predict 1-3 million public charging points will be needed in the region by 2030.
Hydrogen cars also have the potential to be a part of the energy transition. The fuel is clean, low carbon when produced from renewable sources, and flexible. Technologies can already produce, supply, store and use hydrogen for applications across many industries. However, the capability for wider adoption and improvements in energy efficiency are still needed.
In Germany, six companies – Air Liquide, Daimler, Linde, OMV, Shell and TOTAL – have partnered to found H2 MOBILITY. Together, they are aiming to build a hydrogen refuelling network of filling stations in the country by 2023. This is just one of many examples in the industry as companies look to find potential sustainable energy solutions.
Against the backdrop of the energy challenge and a drive for greater efficiency, many disruptive technologies are emerging, enabling new products and services. Mastering the Internet of Things and advanced data analytics will be key in connecting vehicles, the roads they are driving on, where they park and refuel, and how drivers pay for transactions on the road.
Innovative solutions designed to help fleets run more efficiently are being developed, ranging from the world’s first in- car payment system, to a mobile fuel delivery pilot in Rotterdam, to on-board diagnostic dongles that are giving Fleet Managers access to new insights for their fleets, to solutions for completely new types of fleets.
As ride-sharing becomes more prominent, competition for fares has become fiercer. The FarePilot app, backed by Shell and BCG DV (Boston Consulting Group Digital Ventures), aims to help taxis and ride-sharing drivers find customers more easily, so they can make more money and spend less time on the road.
Preparing for next generation fleet management
Wherever you look, it is hard to escape news of the rapid and far-reaching changes that are shaping the fleet industry. This presents a world with big opportunities and challenges for Fleet Managers. At the heart of the industry will remain a need to focus on sustainable mobility solutions designed to help make fleet businesses more efficient today and prepare them for the changes ahead.
This article is based on a presentation by Parminder Kohli, General Manager, Business Development, Shell, titled ‘Next Generation Fleet Management’, delivered at the Fleet Europe Forum in Portugal on 6 December 2017.