Fleet outsourcing has been consolidating in Brazil, following the example of what happens in Europe and the United States – more mature markets. Search of Company Vehicle Observatory (OVE), with 368 Brazilian managers, pointed out that 32% of the companies plan to expand the fleet, and 50,6% are already looking at outsourcing.
Among the advantages, cost reduction, increased operational efficiency, lack of concern with vehicle maintenance and depreciation and the guarantee of added services stand out, which ends up optimizing the time of managers.
Therefore, to help you make the best choice in your fleet management, throughout this article we have separated the main information about outsourcing light fleets, including benefits, challenges and much more. Follow:
Main challenges of outsourcing light fleets
Top questions about light fleet outsourcing
There are still those who defend the maintenance of their own fleet. What would you say to this group?
One fear when outsourcing the fleet is the choice of vehicles. What care do you have in this regard?
Still on the type of fleet, do high-end vehicles emerge as a trend? Is it something for specific segments?
In terms of economy, it is heard that versions 1.4 and 1.6 may be cheaper. That is true?
Main benefits of outsourcing light fleets
At first, to help you understand whether fleet outsourcing makes sense for your company, we have separated some of the main benefits of its adoption:
Cost reduction in fleet management
Cost reduction is one of the clearest benefits of outsourcing light fleets. After all, when we outsource the company's fleet, the expenses that its fleet management would have with maintaining its own fleet normally cease to exist.
This is because most of the activities that would previously be the responsibility of its management, such as reviews, insurance and taxes, are now the responsibility of the outsourced company, which usually charges a single amount for all of this in the contract.
Read more: Difference between cost and expense? Know how to classify them
In this way, costs become more predictable, making it possible to estimate what is needed to spend with the contracted company.
Vehicles always in excellent condition
Having current vehicles available at any time is also essential for any company that wants to guarantee the quality of its services.
That said, companies that hire outsourced fleets always have vehicles in excellent condition at their disposal, since, normally, vehicle renewal is already included in the contract.
Less bureaucracy
Going forward, bureaucracy is also reduced in outsourcing fleets, since all responsibility for document management, factory warranty and other parts, payment of taxes, licensing and other bureaucratic matters are all of the contracted company.
Ease of fleet expansion
Fleet expansion is also a reality with outsourcing, as it provides more flexibility for your company to monitor market actions.
Read more: Light fleet renewal: what it is and how to do it
If your business has a seasonal increase in demand, for example, it is possible to add more vehicles to the contract for that specific period. Thus, after the deadline, the fleet returns to its normal operation, without having to cover unnecessary expenses with stopped vehicles.
Main challenges of outsourcing light fleets
So that you can have a fair balance in your decision making, we have also separated the main challenges that arise with the outsourcing of light fleets. Check it out:
Restricted control in operation
By outsourcing the fleet operation, it is notable that the contracting company has less control over it. This is because the contracted company must be responsible for all processes related to the vehicle, from acquisition to delivery. demobilization.
Thus, it is necessary to relinquish this control, which can be a challenge for outsourcing, especially if we think it is more difficult to meet some last-minute demands, for example.
However, the best suppliers on the market are prepared to deal with this type of unforeseen event, containing specific solutions for the main problems that your fleet management faces throughout the day.
lack of monitoring
Unlike the own fleet, sometimes, in outsourcing, the manager does not have direct and real-time monitoring of the operation. This can present some communication challenges, especially in the face of risky behavior or certain unforeseen events, such as occurrence of claims and fines.
Fortunately, it is now possible to rely on technologies that allow continuous and intelligent tracking of drivers and vehicles, as is the case with video telemetry for fleet management.
Therefore, it is possible to overcome these and other challenges by hiring this solution separately and guaranteeing benefits such as facial recognition and verbal coaching, which alerts drivers in real time if they make dangerous overtakes or exceed the maximum permitted speed, for example.
Brand reputation
The company hired to outsource fleets becomes part of your business. This means that, from the reputation of that company to its values and dedication, they can become problems if they are not compatible with those of your business.
That is, knowing the company you are hiring is fundamental, especially about its history and how it is seen in the current market.
Key questions about fleet outsourcing
Now that you know the benefits and main challenges of fleet outsourcing, let's take it a step further.
Therefore, we brought an overview of this market, with the main questions and answers on the subject.
What care to meet the latent demand with quality and excellence?
One of the biggest challenges for outsourced fleets is gain scale without compromising the quality of services provided.
For this reason, it is essential to combine technology with good service practices and make constant investments, focused on the security of customer data, even on alternatives that improve the daily lives of drivers and fleet managers.
Another important aspect is to focus on the people who interface with the customers, who need to be full of empathy and attitude to win the trust of the customers.
After all, we believe that the outsourcing process brings great economic and operational advantages in the digital age.
The new trend, together with the technological evolution, shows a greater concern with the individual, with the user and their experience. This is the individualization process in the outsourcing model.
In addition to meeting the needs of customers or the company, it is also necessary to meet the individual demands of each user.
In other words, the main care is to understand in depth the demand of each company and not just outsource the fleet.
We understand that it is necessary to understand the pain points of each business in order to verify how to offer the best mobility solution. Each client must be seen with its particularities and the customized solutions together.
Are there still those who defend maintaining their own fleet?
Studies point to a strong tendency towards outsourcing fleets and the great potential of the Brazilian market, however, as with any change, there may be resistance.
The change is cultural and many still see value in asset ownership, direct management and autonomy over processes.
However, numerous cases of outsourcing are successful. Outsourcing brings tangible and intangible benefits and, if well conducted, will allow the success of your core business to be fully and early achieved.
That's because every company has its own specific needs. In this sense, it is necessary to analyze all visible and invisible costs.
The partnership between client and outsourcer is essential. As well as understanding the client's mode of operation, user profile, usage profile, fleet policy, HR, all the details, to offer a service that meets the different needs of the company and users.
It's not a simple decision. Thinking financially, the positive points are numerous, if the company is looking to reduce costs, outsourcing is certainly the best way out.
As the particularity of each company and its mobility needs must be taken into account, a partner with high quality in its offer must be chosen to ensure the zeal for the company's brand.
So we would say try it out, give it a try. If the “theory” is still not convincing, the best way is to test it in practice and compare the results.
Read more: How to prepare a fleet maintenance plan and ensure more safety in operations
One fear when outsourcing the fleet is the choice of vehicles. What care is needed in this regard?
The choice of vehicles and contract model are fundamental variables. Unfortunately, an obstinate search for the reduction of the fleet leasing invoice is still very common, without evaluating the TCO or even the TCM.
A correct analysis of these key performance indicators is fundamental for the correct choice of vehicle. Fortunately, the market is quite mature and the range of products is very diversified, meeting different demands.
Therefore, it is essential work so that fleet managers and rental service contractors analyze the project as a whole.
As well as acting in a consultative manner, presenting the vehicle models with the best cost-effectiveness for each type of operation and public.
When we talk about the fleet as a benefit, that is, the one used as a benefit to the user, this becomes an employee retention factor or can act in the opposite way, if the choice is made badly.
This fear is an advantage of outsourcing the fleet: freely choose the car model that best suits the company's business and even with the possibility of customizing it according to possible needs.
Therefore, the commercial team should always help in choosing the fleet, so that together they can arrive at the best decision.
Still on the type of fleet, do high-end vehicles emerge as a trend? Is it something for specific segments?
Due to the evolutionary process of outsourcing, the tendency is for high-level fleets to be the last to be outsourced.
Many are still afraid. This does not mean that there are impediments to outsourcing high-value fleets or premium models, since there are fleets of all types and hierarchical levels.
With the advancement of technology and changes in driver behavior, new business models are beginning to emerge:
- Mobility for Users
- Diminution of "ownership"
- car sharing
- Electric or hybrid cars
These are some of the examples, thus increasing attention to the environment and also reducing costs.
For all this, new demands arise, which we understand as solutions for specific segments.
However, the ideal is not to discard the trend, but to act strongly in specific actions to assist in this evolutionary process of the market and customers according to their needs.
After all, there is a general trend towards outsourcing with the advancement of market maturity, which has increasingly understood the optimization opportunities that the alternative brings, in addition to the manager's need to have a strategic role.
As a result, the most high-level models also follow this trend, and a high-quality service level becomes even more critical for customers of this type.
In terms of economy, it is heard that versions 1.4 and 1.6 may be cheaper. That is true?
It depends! In general, 1.4 and 1.6 engine models have more comfort and power.
However, this does not mean that they will wear out less. It all depends on the vehicle model suitable for the operation/use.
The automotive industry has advanced a lot with regard to engine technology and there is a strong downsizing trend, in which smaller cylinder engines have gained power by using technologies.
Although the volume of 1.0-litre cars has increased its share (35,12% in 2018 vs 37,98% in 2019), in some fleets, 1.4-litre and 1.6-litre vehicles have proven to be more efficient in terms of their TCO.
We also pack any Another important factor when choosing 1.4 or 1.6 vehicles is related to user satisfaction and improved conditions of use.
The price equation is totally related to the usage profile and needs of each company.
Therefore, greater motorization does not necessarily mean lower service costs. But, it may represent a lower cost of ownership.
In other words, this is a very relative point, we cannot see an absolute conclusion.
There are many variables that influence this case: efficiency of the 1.0 models by automaker, purpose of using the fleet, drivers' driving profile, among others.
The ideal is to follow the indicators. In some cases, including making use of telemetry to identify possible cost reduction opportunities.
How can technologies help manage outsourced fleets?
As we saw throughout the content, fleet management benefits from cost reduction, vehicles always in excellent condition, less bureaucracy and opportunity for expansion.
On the other hand, the lack of control and tracking is a possibility, which represents some risks for managers who seek these advantages, but do not want to give up efficiency and security.
Read more: 5G: how technology impacts fleet management
But we also saw that not all is lost, since os fleet management systems are the answer to reinforcing the integrity of an operation.
By the way, many fleet outsourcing companies already allow the contracting of these additional services, so the insecurity with the scarcity of monitoring is solved with technologies such as videotelemetry.
Os golfleet products, for example, allow your company to monitor the entire operation and obtain data such as driver productivity and even their behavior in traffic.
Read more: Reduce risky traffic behavior in your fleet management with the help of technology
In this way, it is possible to understand whether the outsourced fleet is really performing its services with the best possible quality.
All this because the video telemetry puts you at the heart of operations, thanks to benefits such as:
- Real-time operation monitoring
- Fleet policy configuration
- Data on filming inside and outside business hours
- Driver behavior analysis
- Number of violations and those responsible
- Ease of auditing violations
- Identification through facial recognition
Therefore, combining the advantages of technology and outsourcing is essential for managers who want to ensure better results and more competitiveness for their fleets.
A Golfleet can be by your side and provide a more productive, economical and safer operation. Learn more about video telemetry and learn more about the impact of facial recognition on fleet management:
