Does the future of fleet smell like diesel?

When I started in the fuel card world as an enthusiastic graduate just over 20 years ago, the teams I worked with had a question that they asked about people to find out if they understood the industry and had the right experience - ”Do they smell of diesel?”

At that time I didn’t ‘smell of diesel’ of course, but over the years I got to know a bit about fuel cards; how fleets operate and about the fuel retail industry and so perhaps I started to get a bit of that elusive smell. Looking at the industry now, the changes it’s gone through, the pressures it’s under and the sheer volume of change ahead, that question is now definitely no longer relevant.

Diesel will of course continue to have a significant role in how fleets fuel up for many years to come, but change is happening right now and fossil fuels are not the answer for how fuel card operators can continue to generate long term growth or meet their fleet customers’ new and future needs.

Change is happening fast, the rise of electric vehicles (EV), environmental pressures, legislation and regulation, along with social pressures are all mounting against diesel and for some sectors of transport its days are very much numbered (Over 60% of fleets have or expect to have implemented an alternative energy mix by 2023*).

Hardly a day goes by where we don’t hear about a breakthrough in battery technology, hydrogen stations opening or a battery powered commercial vehicle being capable of greater range and load carrying. The “Tesla Semi” which is due to hit the roads during 2021 is claimed to have a range of over 800km, recharge its batteries to 80% in 30 minutes and carry over 30 tonnes of cargo. The EV truck market is buoyant as all the major manufacturers are racing to develop similar battery powered heavy vehicle propositions. The short term viability of these early models, and the necessary infrastructure to support them, is very much yet to be proven, but at the very least it’s a glimpse into the not so distant future of how heavy fleets can operate without diesel.

In parallel to the changes in energy mix, fleet operators are looking to simplify and consolidate how they purchase the products and services they need to run their businesses. Aside from vehicles themselves changing, the range of services fleets need to run efficiently will increase and this puts the traditional fuel card operators in an ideal position to meet these customer needs and to grow.

Fuel card operators have long standing customer relationships that are the envy of many industries. The customer base is also highly varied, from large government agency fleets, international haulage companies and vast online shopping delivery fleets to the local building firm with just a couple of vans. This diversity means a huge range of additional services can be offered to meet their business needs. Mobility, insurance, commercial energy supply, financial services and telematics, the list goes on and is almost limitless given the size and mix of the customer base. The key is being able to offer the right services and package them in a way that is easy to launch, cost effective and consistent.

This is where CGI’s Fleet Market Place comes in. We have a range of solutions to help fuel card issuers move from today’s limited set of services, to a more diverse range via a network of partners and suppliers. These services can be aggregated to create a broad and appealing offer to fleet operators. This transition to a market place of services, products and partnerships is perhaps challenging for legacy IT platforms, but a huge opportunity to grow in a potentially challenge industry. The role of the “super aggregators” is there for those that are willing to take it.

So, neither hydrogen, electrons, insurance, mobility services nor any of the future solutions to meet fleet customers’ needs seem to have a specific smell, so I wonder what the new question will be. Perhaps it will be whether someone is willing and able to embrace the future; think beyond today and help change the industry. I’m not sure what that smells like… does innovative thinking have a smell?

* Source: Arval Mobility Observatory 2020.