Fleet News

Cost management: Cost will still trump technology in 2014

Damian James, ACFO chairman

The New Year will deliver both challenges and opportunities for fleet decision-makers, with technology to the fore but cost management remaining the single overriding issue.

In the ideal scenario, the two will harmonise, with breakthrough technology helping fleet chiefs to deliver savings within ever-tightening budgetary constraints.

Whether managing vehicles in the public, private or voluntary sectors, there won’t be a fleet operator who is not seeking new initiatives in the battle to cut costs – or at least stop them rising.

Fuel is fast challenging vehicle depreciation as the single biggest overall fleet cost, so the decision to abandon next September’s fuel duty rise is to be welcomed.

However, axing an increase that has not taken effect does nothing to alleviate issues caused by near-record pump prices and the threat they may rise further because of global events.

Turning to technology, I predict we will see more smartphone applications that enable fleet decision-makers to manage their vehicle operations remotely.

We have already seen the introduction of apps delivering information on, for example, company car benefit-in-kind tax and journey navigation as well as helping drivers to record both business and private miles.

But we will see more apps relating to inventory management and fleet management, resulting in managers being able to keep their fingers on the pulse of their fleet 24/7.

Finally, 2014 could be the year of the electric car. ACFO has historically held a sceptical view as to the fleet viability of zero emission vehicles outside of niche applications.

However, the recent launch of the BMW i3, to be followed by the i8 sports car later this year, could significantly advance mainstream interest in electric vehicles among fleets.

I cannot see a massive adoption until electric vehicle list prices start to drop, but ultimately the key will be whether or not electric vehicle wholelife operating costs stack up – thus technology remains to the fore, but financial management will ultimately rule the decision-making process.

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