4 fleet management challenges that CSCOs should be aware of

Fleet management challenges are on the rise, with supply chains becoming increasingly volatile in recent years. CSCOs and COOs overseeing logistics and transportation must carefully balance factors such as efficiency, profitability and sustainability.

Fleet management challenges can erode margins, disrupt production and delivery schedules, and undermine customer confidence if they are not properly addressed. Here are some actionable steps that C-suite leaders can take to mitigate them.

1. Overall costs

The volatility of global energy markets remains an obvious concern for fleet managers. However, numerous other factors are leading to high overall costs, including increased insurance expenses, higher maintenance expenses and rising labor costs.

CSCOs and COOs should carefully monitor the total cost of ownership of their fleet assets and consider using telematics and AI-powered platforms for predictive maintenance and driver monitoring. Predictive maintenance can help prevent unplanned downtime, while dynamic routing tools can help reduce fuel usage.

2. Increased regulatory scrutiny

Regulations for emissions are in flux, but regulation is likely changing for safety standards, hours of service and, in some cases, low-emission zones, making compliance a key fleet management challenge. In addition, companies in some areas will have sustainability reporting requirements to navigate. Compliance violations can lead to fines, increased liability and reputational damage, while adhering to compliance regulations can help companies win over eco-conscious customers.

CSCOs should consider having their company adopt automated compliance software that integrates with telematics, which will enable real-time reporting and recordkeeping that adheres to all required standards. CSCOs should also collaborate with legal and sustainability leaders at their company to ensure that fleet operations remain compliant.

3. Supply chain disruptions

Supply chain risk reached its peak during the COVID-19 pandemic, but various global and regional factors continue to disrupt global trade. Supply chain disruptions complicate forecasting and budgeting, which can negatively affect CSCOs’ ability to meet service-level agreements.

Supply chain uncertainty can also affect vehicle acquisition, upfitting and spare parts availability, which puts pressure on asset utilization and may lead to fleet managers continuing to use aging assets that require higher maintenance costs and more downtime.

CSCOs and COOs should diversify their supplier relationships, create buffer inventory for critical components and use predictive analytics to anticipate needs. They should also look for opportunities to improve data visibility across procurement and maintenance teams so the groups have better insight into operations.

4. Electrification and alternative fuels

The majority of fleets continue to use diesel. However, some companies have implemented other strategies or are looking into doing so.

CSCOs should analyze ROI on a case-by-case basis and consider conducting EV pilots in urban environments or on medium-duty routes. Hybrid vehicles may be a good starting point for some companies.

Today’s fleet management challenges require CSCOs and COOs to proactively plan for future problems and consider how technology could help solve those issues. Making fleet management a priority for the C-suite can help increase a company’s agility and efficiency.

James Kofalt spent 16 years at SAP working with SME business applications and was a product manager for integration technology at Microsoft's Business Solutions division. He is currently the president of DX4 Research, a technology advisory practice specializing in ERP and digital transformation.