Ian Evans shares his thoughts on the current petrol price hikes, increasing vehicle maintenance costs and demand for semiconductor chips, and the pressures these issues are placing on fleet operators throughout the UK.
Fleet managers may well be feeling the sting of recent cost surges, and may expect to see damage to their bottom line overall. Margins are more important than ever before. Global politics and the economy are non-negotiable and, as a result, businesses should look to maximise the impact they can have on the company budget by considering factors that are within their control.
Price hike challenges and supply chain issues
After wholesale prices for crude oil surged, prices at the pumps continue to increase, sometimes on a daily basis. This has worsened following the Russian invasion of Ukraine, and is one of the biggest expenses fleet operators face in the current climate. RAC’s Fuel Watch found that the average litre of unleaded petrol at UK forecourts reached a record high of 167.3p in March, while diesel hit 179.9p a litre.
Ongoing supply chain issues and the continuing global shortage for semiconductor chips is making it virtually impossible to manufacture new vehicles without missing certain electrical components. According to the Society of Motor Manufacturers and Traders, there was a 34% fall in large fleet registrations in March 2022 – which is typically the most important month for sales.
The demand has impacted the used car market, with the shortages creating unprecedented demand and prices soaring by an average of 30%. This had led to longer wait times for vehicles – with fleet operators facing delays of around a year for certain models. This makes it ever more important to keep fleets in good condition.
Repair costs have increased due to inflation on prices for parts, workforce shortages and supply chain issues. This means servicing and maintaining fleet vehicles is becoming more expensive and time-consuming, and leaves many fleet operators without the use of their vehicles for extended periods of time.
Solving the problem
Given the rate at which petrol prices are increasing, you could start by reviewing your company’s fuel purchase strategy and ensure you are utilising tools such as a fuel card, which offers discounts at the forecourts. Planning driver journeys and refuelling early will eliminate the need for urgent topping ups at more expensive places, like motorway service stations. It’s also a good idea to encouraging fuel-efficient driving. Better use of gears, maintaining tyre pressure and cutting down on air conditioning use can help cut bills significantly, so it is worth training your employees in proper driving habits to help reduce fuel mileage.
Other options include installing telematics, such as G-force systems to monitor heavy braking or actual incidents, and black box software to track speeds. Camera access from within the vehicle, such as reversing cameras, is a good way to minimise minor incidents where manoeuvring in tight spaces and any dash-cam footage of actual incidents is gold dust to enable early decisions on liability.
Finally, uninsured loss recovery (ULR) can help fleet managers claw back money. All too often, ULR is overlooked by many in the industry – resulting in thousands of pounds’ worth of unclaimed losses. However, in a time when cash is key, this solution can help in combatting escalating costs. The priority for fleet managers after an incident will, of course, be getting vehicles back on the road as quickly as possible. However, due to time-consuming repairs, this is not always possible at present, and you may find loss of use, revenue or hire costs escalating. These losses incurred as a result of non-fault accidents represents a commercial opportunity, which can be taken advantage of with the appropriate ULR provisions in place.
How can ULR help?
To begin with, businesses should reflect on their internal procedures and policies to ensure they know what to do if one of their vehicles is involved in an accident that was not their fault. Make sure all your drivers understand the importance of getting full details including photographs of the vehicle (especially if is it a company vehicle with a livery on it), areas of damage and if possible, the other driver.
The impact of failing to carry out these basics can cost your business significantly. While it is not usually relevant to the recovery of losses, taking photographs of the inside of the other vehicle to show whether there were any passengers and how many is always a good idea. It is also important to remain diligent and keep on top of paperwork and communications with your insurer – this can sometimes feel like a full-time job, but it is vital to recovering the money you’re owed.
You can put forward whatever claims you like. However, they will, of course, be subject to scrutiny and insurers will ask for documentation. A lack of documentation does not mean you cannot recover a particular loss, but the better the documents are, the better your prospects. For example, if you have a claim for loss of profit, you need to show the workings out; just providing details from a spreadsheet is not usually enough.
While some incidents will be fault claims, it is important to have a proper ULR solution in place to minimise claims spend on non- or partial-fault incidents.
Many fleet operators will, rightly, concentrate on the cost against the business in fault incidents, but it is not an either or – having a proper ULR solution in place is imperative to maximising loss recovery and helping to reduce overall spend.
Contact our team for ULR support
If you’d like to discuss uninsured loss recovery with our experts, and see how we could help your business, don’t hesitate to get in touch. You can call us free on 03300 945 100 or request a call back, and we will call you.