By RAM Tracking on 29 Mar 2017
Tip 1 – Consider the risk of higher import tariffs
With import tariffs expected to increase by up to 10 per cent, restricted access to the European market is likely to affect prices of both car parts and new vehicles purchased from the EU, putting additional financial strain on fleet managers in an industry already characterised by tight margins. The UK’s vote to leave the EU saw an immediate drop in the value of the pound, and while sterling has since recovered slightly, it is important for organisations to remember that there is still a significant amount of uncertainty around the UK’s future economic position. While fleet managers are likely to feel the impact of inflation in relation to key expenses such as vehicle maintenance, reassurance can be sought from Chancellor Philip Hammond’s announcement of a fuel duty freeze in his first autumn statement last year. However, given the volatile nature of the current financial climate, businesses should bear in mind that fuel prices may not remain stable.
Tip 2 – Obstacles of recruiting skilled drivers
2015 saw 35 million EU nationals arriving in the UK, 70 per cent of whom came specifically to work. With tighter migration restrictions amongst the measures to be implemented now that Article 50 has been triggered, fleet managers will no longer be able to rely on influxes of workers from the continent to meet staffing demands. While existing pools of EU workers will remain available and there is the potential for seasonal worker schemes to reduce pressure on companies at peak periods such as Christmas, organisations must give careful thought to a recruitment strategy to ensure they have access to a reliable network of drivers throughout the year.
Tip 3 – Robust forecasting is essential
In light of the unpredictable market conditions facing UK companies, it’s important for companies to take the time to identify potential limitations in day-to-day business operation, for example, in sourcing new staff and expenditure on overheads, industry members can make the changes needed to cut costs and enhance customer experience despite the challenges associated with an EU exit.
One way in which companies can drive down spending is by introducing automation into business processes and taking advantage of available technologies, such as vehicle tracking systems. Providing fleet managers with real-time and historic data on vehicle locations, performance and driver behaviour, telematics systems allow for the enhancement of customer experience by boosting productivity, resulting in faster deliveries and accurate updates about expected delivery times which can be provided to customers. Furthermore, by receiving accurate information about driving habits and fuel consumption, businesses can easily evaluate ways to reduce petrol costs, helping to boost profit margins.
Tip 4 – Strengthen relationships with your suppliers
Fleet operators should also liaise with vendors to gauge opportunities for taking advantage of economies of scale and the ability of current suppliers to negotiate post-Brexit obstacles. In the event that existing partnerships do not allow these issues to be overcome, companies should consider implementing a dual-source supply chain and forging new relationships which better facilitate fleets’ ability to flourish outside of the single market.
There is no denying that the triggering of Article 50 will require fleet managers to carefully think about the different areas of their businesses and plan ahead in order to overcome potential difficulties, however, it is also important for industry members not to panic in the face of change. With thorough forecasting and preparation, companies can ensure that they stay ahead of their competitors and prosper for the years to come.