New electric van availability could be exceeding diesel, providing an opportunity for light commercial vehicle fleets to seriously consider adopting the new technology, says the Association of Fleet Professionals.
Paul Hollick, chair at the industry body, explained some members were reporting that electric vans were currently available with significantly shorter lead times than diesel equivalents.
“Electric van production is beginning to ramp up quite quickly and while the numbers remain relatively small in overall industry terms, this appears to be creating what are – in current terms – relatively short lead times that can be measured in months.
“As with electric cars, there is a strong possibility that manufacturers are channelling greater resources into electric van production in order to meet corporate emissions targets and this could additionally lead to comparatively strong availability over the next few years.
“What this means overall, we believe, is that now is a good moment for fleets who need vans and who have been deliberating over electrification to think seriously about placing orders. While there are widespread reservations about some aspects of going electric for light commercial vehicles, in many cases it makes more sense to have an electric van and begin managing those issues sooner than to wait longer for a diesel model.”
Paul added that the general AFP view was that although serious consideration needed to be given to the potential drawbacks of electric vans, most fleets could begin to use them relatively easily in at least some applications.
“We worry that widely discussed operational and technical barriers – while they certainly need to be part of any buying decision – are serving to disproportionately hamper electric van adoption across our industry when there remain many operators for whom electrification is a real and viable solution.
“The fact is that in the absence of any other widely available zero emissions technology, electrification is the future for light commercial vehicles so, as a profession, we need to be working to resolve these problems and doing so operationally in the real world is probably the best way forward. Bearing in mind the current supply situation, now is a potentially a good moment for fleets to place orders.”
Paul added that much more government assistance was also needed to speed adoption and help to overcome objections.
“We’ve talked at length in recent months about the requirement for some kind of government support for fleets to acquire electric vans, acting as an equivalent to the way benefit-in-kind has been used to massively boost car electrification. It would really be a help to provide incentives that effectively outweigh any potential problems.”
Fleets should “look beyond” full autonomy at other possible uses of new assisted driver technology, says the Association of Fleet Professionals.
Paul Hollick, chair at the industry body, said that it was becoming clear that the promise of entirely self-driving cars was unlikely to materialise in the near future but that other potentially useful – and even transformational – ideas were coming to fruition.
“General agreement seems to be emerging across the autonomous tech field that the target of full ‘level five’ autonomous driving is still some years away, if indeed its inherent problems can ever be solved. This is perhaps disappointing given the hype but fleets potentially have a lot to gain by looking beyond that setback. There is much that can be done with the related technology that is readily available and fleets should be both looking at its possibilities and also thinking about infrastructure to ensure its safe use.
“Especially, the UK appears to be more liberal than some other countries in terms of allowing this technology to be used on public roads, so there is a chance that we may effectively be asked to become early adopters – with both the risks and rewards that brings.”
Paul said that some fleets already operated vehicles with level 2 autonomy such as lane changing and self-parking systems and level 3, that allowed fully automatic driving on some roads such as motorways as long as the driver was ready to take control if needed, was not far away from production models.
“Our view is very much that fleets need to be thinking about how they view these levels of assistance. Essentially, they rely on the driver intervening if the technology fails but it is all too easy to envisage situations where this handover does not happen. There needs to be serious examination of the risk management and Duty of Care implications.
“Especially, because these driving modes may be soon available on cars that are entering production, there is a chance they may arrive on your fleet almost by stealth. You need to know if vehicles with these levels of autonomy are being used on your fleet and ensure that drivers are familiar with the technology and how it works. There are very clear risks.
“However, this should not deter fleets from investigating and, where appropriate, accessing the potential advantages in terms of reducing driver stress and cutting accident rates. These assisted forms of driving could prove to be valuable in terms of the benefits they bring. They just need to be properly managed within a robust and sensible framework where drivers understand the limitations and their responsibilities as an employee and road user.”
Paul said that there were other intriguing possibilities that autonomous technology provided, such as the ability for fleets to access services that use remote driving.
“Our Future Mobility Committee recently saw a presentation from Fetch, which plans to use remote driving to deliver car club-style services, with trials underway in Milton Keynes. It’s early days for this kind of tech but the potential is considerable.
“Certainly, remote driving appears to solve many of the problems inherent in higher levels of autonomy while delivering some of the most important advantages. There are a very wide range of potential fleet applications. For example, if hire cars can be delivered to the point of need at short notice without the need for a delivery driver to be present, that would be a massive advantage and open up pay-on-use car services to a much wider audience.”
A “kickstart” is required from government to encourage faster electric van adoption by businesses, says the Association of Fleet Professionals.
Paul Hollick, chair at the industry body, said that its members were reporting a range of issues with the introduction of electric vans and some form of financial incentive was needed that would help to overcome these objections, playing a similar role to the boost provided by low benefit-in-kind taxation for electric cars.
“Our feeling is that there is an assumption at government level that electric vans will follow roughly the same pattern as electric cars in terms of speed of adoption but given feedback from across our membership, we are highly doubtful that will prove correct.
“We now have several major fleets running a relatively large number of electric vans and almost all are finding a range of problems that are not easily solved and which are proving to disincentivise both operators and drivers. Many of these early adopter organisations have a corporate commitment to net zero and will effectively choose electric vans whatever the operational compromises encountered. However, others are proving less likely to be quite so determined with some having suspended electric van acquisition. That is why some form of incentive needs to be introduced simply to make tackling these problems worthwhile.”
Paul said that the issues encountered could be divided into operator and driver problems.
“Operators are reporting that charging infrastructure is often unsuitable for vans, AER rates that do not provide suitable levels of reimbursement, ongoing poor supply of vehicles, limited choice of model types, rising lease and purchase prices and, of course, dramatically increased charging costs. In some cases, fleets are reporting that electric van running costs are now higher than diesel. Many are also finding it difficult to install home chargers on a widespread basis for their drivers and are having to build charging into the working day, which causes obvious disruption.
“Additionally, van drivers are generally proving much more resistant to electrification than their car counterparts. Even if they are one of the 30% who are able to have a home charger, a significant proportion don’t want their work van parked on their drive overnight while it is plugged in. This means they are having to use public charging, which can create problems over fair AER reimbursement. It is certainly not unknown for drivers to attempt to hand back their electric van to their employer and demand a return to their diesel.
“All of these problems need to be taken into account before you even start looking at the core issues of range and payload. While newer designs coming to market are starting to overcome these objections to a greater or lesser extent, they remain fundamental issues for many operators who are considering electric van adoption.”
Paul said that without widespread fleet first user adoption, there would be limited future supply of electric vans into the used sector.
“Unless businesses very quickly begin to operate electric vans on a large scale, there will be no real used electrified light commercial vehicle market of which to speak by 2030, which will affect everything from long-term national targets for net zero to localised plans for increasingly strict clean air zones in cities.
“Our view is very much that the government needs to take some control of the situation and find a way to kickstart electric van adoption that will provide an incentive large enough to overcome this range of issues and bring about a sea change in what looks like an increasingly tepid market. There is a very real chance that only van fleets with a corporate commitment to net zero will become 100% electric this decade and an equally real possibility that many others will drag their heels and instead operate diesel for as long as possible.”
Electrification and the impact of the recession look set to be the key fleet issues of 2023, the Association of Fleet Professionals is predicting.
Chair Paul Hollick said that that businesses would be looking to fleet managers to deliver more value than ever, especially when it came to cost control and carbon savings.
“Next year is going to be a tough one, no question, and there will be considerable pressure on fleet managers to produce results that help their employers make progress on their EV agenda while also controlling costs.
“Fuel expenditure is going to help drive this line of strategy, alongside environmental concerns. Petrol and diesel prices remain stubbornly high and the impending fuel duty increase will further concentrate minds. Even given that electricity prices could increase in the Spring when the government rethinks its price cap, electrification is going to look more attractive than ever in financial terms.
“Our aim as an organisation is to disseminate as much information about our members’ EV experiences as possible. Currently, several of the largest fleets within the AFP are deploying electric cars and vans in large numbers, and we are sharing their learnings as far and wide as possible through a variety of channels.”
A key challenge given these objectives, Paul said, was that vehicle supply was likely to remain poor for the whole of 2023, which would inevitably affect the rate of electrification.
“Different manufacturers are making different noises about whether production issues are likely to improve next year but the bottom line remains that there is a massive backlog to clear before the situation has any chance of improving. Electrification can only happen at the rate of supply.
“Of course, this creates a knock-on effect with many company vehicles now being operated well beyond their originally planned termination point, something that will also place considerable demands on fleet managers when it comes to keeping these cars and vans in compliant, roadworthy condition.”
In terms of AFP activity, Paul said that the organisation would be issuing its new Tax and Legislation Manifesto in early 2023, designed to set out its thinking in these key areas.
Paul said: “It’s positive that the recent fiscal statement provided much increased certainty over benefit in kind taxation and also that we’ve seen some action over AER but we’d like to keep the dialogue going with government to achieve further improvements in the latter as well as campaigning in a number of related areas. The document is in its final stages of preparation and we plan to issue it soon.”
More details about these courses can be found at www.theafp.co.uk.
The Association of Fleet Professionals’ 2023 Fleet Academy calendar has been announced, with an increased range of courses designed to help fleet managers enhance both their core skills and meet new challenges.
Paul Hollick, chair at the industry body, said that interest in training had been rising since the pandemic with this year’s courses being fully booked and, in light of current economic conditions, a board decision had been made to hold fees at their current level until at least the end of 2023.
“There’s been a definite increase in fleet managers looking to upskill to meet current and future fleet challenges such as electrification, so we are offering more training courses in 2023 with 85% more training spaces. Also, with finances being tough at the moment for many of our members, keeping fees down seems like the right course of action. In our view, good training should be accessible and affordable.”
Making the Switch to Electric Vehicles courses will run on 25th April, 8th June, 12th September and 5th December while the complementary Transition to eLCV is scheduled for 26th April, 14th June, 13th September and 6th December.
Strategic Fleet Vehicle Management is recommended for those with responsibility for managing a vehicle fleet and consists of a trio of two day training sessions. Cohorts start on 15th February (Midlands) and 9th May (Basingstoke). The course is also available in an online, distance-learning format. Funding and Finance for Fleet Professionals is a module from the Fleet Vehicle Strategic Management programme that is also available as a standalone two day course which will run on 7th and 8th March and 4th and 5th October.
Advanced Fleet Vehicle Management is the industry standard in professional fleet management, developing the advanced knowledge and skills required to run complex fleet operations, and is a valuable asset in developing senior fleet management teams. It starts on 21st March (Midlands) and consists of eight training days.
Finally, Introductory Fleet Vehicle Management is designed for anyone who is new to the fleet industry, developing in their role, or who needs a refresher in fleet basics. It can be started anytime as online, self-paced learning.
More details about the courses can be found at Education & Training – AFP (theafp.co.uk)
Membership and training fees for the Association of Fleet Professionals (AFP) are being frozen until at least the end of 2023 in recognition of what the organisation describes as “difficult times.”
Paul Hollick, chair at the industry body, said that there was a high level of awareness that both individual and corporate members would be facing increasing financial pressures in the year ahead.
“We’re living through a period of time when inflation is high, taxes are rising, growth is sluggish or non-existent, and there are significant rising costs, notably energy. Against this backdrop, the AFP board has decided that keeping fees at their current level for the foreseeable future is simply the right thing to do.
“These are difficult times and we are very much of the mind that, as a not-for-profit organisation that has healthy finances thanks to the considerable success we have enjoyed in attracting a substantial number of members since our formation two years ago, we have a responsibility to support the fleet sector at a practical level.”
The AFP offers two levels of fleet operator membership. The £99 AFP Individual Membership is for single applications from individuals employed in any fleet operator role while the AFP Fleet Operator Membership at £299 is for companies that directly manage car or light commercial vehicle operations and have multiple employees within the business with a fleet stakeholder interest.
AFP corporate memberships for fleet service providers are priced at platinum (£2,000), gold (£1,000), silver (£500) and bronze (£299) levels offering graduated benefits including the number of individual memberships provided, discounts on training and other activities, and the degree of presence on the AFP web site.
Membership benefits include use of the Member of the Association of Fleet Professionals (MAFP) designation and full access to the AFP online member area that provides best practice process and procedural guides, an online library of reference material and a forum where members can ask questions. There is also support from the AFP helpline and attendance at AFP webinars, fleet operator lunches and forums and the annual national member conference.
Further details on membership can be found at Membership Services – AFP (theafp.co.uk)
Today’s fiscal statement has been a “mixed bag” for fleets with some welcome gains and some obvious losses – plus a return to economic austerity – says the Association of Fleet Professionals (AFP)
Paul Hollick, chair at the industry body, said that the biggest win came from the news that increases on company car taxation for electric vehicles would only rise by 1% a year to a maximum of 5% from 2025-26 through to 2027-28.
He said: “We’ve been campaigning, along with the BVRLA and other industry bodies, to ask government to both limit any rise in benefit in kind for EVs and to provide longer term certainty that would allow fleets to plan for the future. Here, we feel as though we have been listened to, and that well-judged measures have been put in place that will enable fleets to continue to plan for electrification through to near the end of the decade.”
Paul also welcome news that the 100% first year allowance for EV charge points for both corporation and income tax purposes would be extended to 2025 – but said that the good news for fleets largely ended there.
“Elsewhere in the chancellor’s statement, we saw a real mixed bag. Probably the biggest disappointment comes from the decision to, in most cases, equalise vehicle excise duty with petrol and diesel cars and vans from 2025. This is still some time away and probably the strategic thinking is that there will be market equity between EV and ICE by that point but if we have learnt anything from the last few years, it is that predicting the shape of the new vehicle market is very difficult and this could yet prove to be a move that ultimately slows EV adoption by both new and used buyers.
“Of course, bearing in mind the £40,000 expensive car supplement in VED, this could be part of a government strategy to try to make EVs more accessible, with manufacturers being effectively encouraged to keep prices below this level, especially in the light of recent price escalation following the pandemic.”
Paul added that the larger picture from the fiscal statement was that the government’s approach could credibly be compared to the austerity policies adopted following the 2008 global economic crisis, and that fleets would come under similar pressures to then.
“While the proportions look a little different from the last time, we are going to see a combination of very large tax increases and very large decreases in public spending, bearing a strong resemblance to the previous experience.
“Almost inevitably, this will mean that organisations will be preparing for tougher times by trying to identify ways to reduce costs right now, and their fleet operations will come under the microscope. We expect cost control and reduction – always a preoccupation for our members – to move even higher up the agenda.
“Certainly, we are hearing more discussion about this area from within the AFP and we expect discussion about both innovative and established methods of making savings to become an increasingly large part of our activity. For example, there are reports that fuel duty will automatically increase by 23%, or around 12 pence a litre, in April and this is just one of many similar issues that will focus the attention of fleet decision makers.
“Additionally, we have made our own gesture to support our members through this economic crisis by freezing our membership and training fees through the end of 2023. We believe that this is the right thing to do at this moment in time.”
Three fleet operators have been added as directors to the main board of the Association of Fleet Professionals (AFP) following a vote by the organisation’s members.
Martin Edgecox is national fleet manager at National Highways, where he has worked since 2013. He has significant experience of fleet in both the public and private sectors, working extensively in zero emissions by co-ordinating with the Department for Transport and Office of Zero Emission Vehicles to meet ambitious carbon targets.
Matthew Hammond, head of fleet at Altrad Services, is a National and International CPC holder with over 12 years of experience in transport and fleet management. He been in his current role for eight years, operating a mixed fleet of 1,200 vehicles across the UK with cradle-to-grave fleet management experience in cars and commercial vehicles.
Finally, Lee Jackson is head of fleet and transport at Marston Holdings and has been involved in fleet for over 20 years. He was previously head of fleet and transport at both HSS and Stericycle on an international basis. For the AFP, he has worked on Kerbside Charging Network and HMRC AER projects, and is a member of the Northwest Freight Council.
Paul Hollick, chair at the AFP, said: “We’d like to welcome Martin, Matthew and Lee, as three well-established commercial vehicle fleet managers, to the AFP board. Crucially, we hope they will play a key role in shaping our future van training courses – both for ICE and EV – within the AFP Fleet Academy. We are doing more and more work in the area of van fleet management, as well as cars, so they will be a major asset to the organisation.”
Ten candidates stood in the election to be added to the AFP board for two places. However, there was an equal number of votes for two of the three leading candidates from AFP members, so all were appointed as directors.
Also, Ashley Tate, CEO of Mina, has become vice chair of the AFP’s EV, Alternative Fuels and Low Carbon Committee.
An increasing focus on cost control and environmental measures means that the profile of the fleet manager role is rising in many organisations, the Association of Fleet Professionals (AFP) is reporting.
These changing corporate priorities mean that fleet managers are now more often becoming involved in board level decisions and high level strategic thinking, explained Paul Hollick, chair at the industry body.
He said: “We’re seeing a number of trends come together here. The most visible is probably the environment. This is becoming an increasing priority for many organisations and fleet electrification is very much a central part of their future plans to become carbon neutral or hit zero emissions targets over the next few years.
“This can be seen most obviously in the many businesses who use their livery to show they are using electric vans. The fleet is a visible signal of an organisation’s commitment to green issues and the fleet manager is playing a fundamental role in making that happen.”
The focus on controlling and reducing costs was a direct reaction to current economic turbulence and also highlighted the important role of the fleet department, Paul said.
“Arguably, you can draw a line here back to the pandemic. Lockdowns really brought home to many people – including senior management – the value of fleets, especially commercial vehicles. Fleet managers became directly involved in helping to keep the country running through a genuine crisis and this helped to increase their corporate presence.”
“The heightened profile gained at that time means that the fleet has very much become part of future strategy and, as the economic situation worsens, AFP members are taking a leading role in cost control and reduction. This is not just about reducing fleet operating costs through making obvious cuts but proposing new and innovative solutions to the fundamental task of moving people and goods around the country. With many day-to-day ‘heavy lifting’ tasks being outsourced, there is a huge demand for in-house, strategic fleet management.”
“It feels as though fleet managers are now being listened to in a manner that has rarely happened in the past.”
Paul said that the AFP was looking to support fleet managers through this shift with resources and training designed to enhance confidence, generate influence and improve presentation skills.
“Many of our members working in corporate environments are highly skilled at their jobs but aren’t used to the spotlight. Today, part of our responsibility as their professional body is to help them adapt to a higher profile as a key element of general fleet upskilling and fleet department succession planning. We plan to offer effective assistance.”
Higher Bank of England interest rates mean that company car and van lease costs are beginning to increase, the Association of Fleet Professionals (AFP) is reporting.
Denise Lane, board director at the industry body, explained that the increases were not uniform across the market but were being widely reported by AFP members and especially appeared to be affecting vehicles already on order.
She said: “Businesses are waiting on the delivery of an historically large backlog of vehicles because of ongoing production issues and some leasing companies are increasing their lease rates on these because of the higher base rate. Typically, the increases are around 1.5% with a low of around 1% and a high of 2%.
“The leasing companies involved are generally being very open and transparent about the cause. Most are providing calculations to show the additional interest by taking the Bank of England base rate at the time of the vehicle order and the equivalent figure now, then applying the difference of the outstanding average capital.
“The AFP’s view is very much that this is being driven by financial factors that are completely out of the hands of the leasing suppliers involved but it does create problems that are not just about having to pay higher costs. For example, the increases may move vehicles between company car bands or mean that the lease rate exceeds employee entitlements.
“This creates some difficult decisions about whether to keep the vehicle on order, especially if a build or delivery date has been provided, or whether to start the ordering process again from scratch for a lesser vehicle choice, which could result in the loss of previously agreed manufacturer discounts and will almost inevitably mean a further delay.”
Denise said that if, as expected, the Bank of England increased rates still further in the coming months, it would almost inevitably mean additional rises.
“With inflation running at over 10%, the Bank of England has already signalled that further base rate rises are almost certain, which will mean further knock-on increases in vehicle lease rates before the end of the year and possibly more in 2023.”