The global fleet management market is set to grow at a tremendous pace as technology makes work easier and more efficient for companies and professionals in this field. The global fleet management market is set to grow at a tremendous pace as technology makes work easier and more efficient for companies and professionals in this field. According to Markets and Markets, it was worth US$ 12.1 billion in 2016 and will increase to 28.7 billion by 2022, growing at a CAGR of almost 16 percent.
While the prospect for growth remains largely undisputed in the industry, there are certain specific factors that should be considered in the short term, that is 2019. According to RTA Fleet Management Software, data, for instance, will become a key element for the industry in the coming year. In a recent blog post that analyzed the year ending and the one about to begin, the company noted that actionable data-driven management making will become more significant in 2019.
“Next year, data will continue to be important for fleet operations to track and analyze, and higher e-commerce demands will add new emphasis on shipping information,” the company noted, citing media reports that John Larkin, a research analyst tracking investments in the transportation sector, had said at a conference that e-commerce data will have to increase to enable more tracking options as more and more consumers will want to track their shipments.
Such a demand from consumers for scanning shipments throughout the shipping process to keep an eye on the statuses will help improve the process of routing, pickup, and delivery. Continuing on his comments, Larkin had also mentioned the role of analytics and artificial intelligence (AI) in the industry.
“We think data analytics and AI are finally coming into the industry to help predict near-term and even medium-term futures, so we can plan manpower requirements and capacity requirements and anticipate service failures that might be caused by weather, bridge out, other kinds of issues and take action that may be recommended by the system,” Larkin was quoted by TruckingInfo.
More acquisitions to fuel growth
The US economy remains strong despite headwinds. According to RTA, this will embolden more companies to invest more in their fleet. This could be at similar levels seen in 2018, which in itself was encouraging for the market. Energy and construction sectors could be one of the major drivers in the growth, according to some reports, while fuel efficiency will be a key deciding factor when it comes to the final purchases.
Lack of drivers
Shortage of skilled drivers could haunt the market in the coming year, as the economy remains strong and unemployment rates are not too low. Drivers could choose to demand higher pay and work that would keep them closer home, according to Larkin. This could hurt the speed of growth as companies struggle to find the right employees to boost productivity.
Electronic Logging Device – the showdown
Perhaps what’s going to be more interesting in the shorter term is the US government mandate on electronic logging device (ELD) that is entering the final phase and coming into full effect by December 16, 2019. Ever since its inception, ELD has had both supporters and opponents, but the reality is that operators have to comply by the end of next year.
“This means as of that date, all qualifying commercial motor vehicles (CMVs) are required to use electronic logging devices,” RTA said. “The mandate was soft-launched in 2015. At that time, the rule was established, and fleets were given the option of using ELDs. In 2017, the mandate entered phase 2 of its rollout, when vehicles were required to use ELDs or AOBRDs that were installed prior to Dec. 18, 2017. Phase 3, which begins in 2019, is the final stage, mandating that all qualifying CMVs use ELDs.”