A decline in vehicle manufacturing means Oil & Gas businesses are struggling to secure the fleet they need — outsourcing fleet management responsibilities can help to ease the burden.
Many industries are suffering from a severe shortage of fleet vehicles and the upstream Oil & Gas sector is no exception.
And while many industries may be experiencing this problem, the fleet vehicle shortage is affecting the Oil & Gas industry to a greater extent than many other sectors.
This is because, for some Oil & Gas companies, activities that heavily rely on fleet vehicles can account for up to 80 percent of their total revenue.
Why is There a Shortage of Fleet Vehicles?
There are a number of factors contributing to a lack of available fleet vehicles.
Firstly, a global shortage of microchips — which can power many features in vehicles ranging from infotainment systems to safety features. This means that the global auto industry will produce up to five million fewer vehicles this year than originally planned.
Consequently, vehicle supply is dwindling and this shortage is being further exacerbated by the fact that consumers are buying new vehicles at the fastest rate in years.
Data shows that in March of 2021, for example, total new vehicle sales in the US were almost 60 percent higher than they were the previous year.
The Rising Cost of Fleet Vehicles
It’s becoming increasingly difficult for the Oil & Gas industry to source the vehicles it needs as competition is increasing for what is a smaller supply.
Even if Oil & Gas companies are able to secure vehicles, they are coming at an increasingly higher cost. Vehicles are costing 18-20% more than fleet managers are accustomed to paying and these figures are rising.
This means that procurement and operations departments are finding it increasingly difficult to do their job. So much so, in fact, that an increasing number of Oil & Gas businesses are taking steps to outsource their fleet management function.
What Fleet Management Duties are Typically Outsourced?
Fleet management responsibilities that are commonly outsourced include:
- The Sourcing of Trucks and Field Vehicles
This involves getting value for money from your suppliers, as well as building strong relationships and getting competitive pricing.
- Vehicle Maintenance and Repairs
This can include daily checks, inspections, services, preventative maintenance, and repairs.
- Safety Audits
These cover issues such as ensuring safety management systems are in place, checking that risks are being eliminated or controlled, ensuring control measures are effective, and assessing the level of compliance.
- Driver Behavior Tracking
This provides insights into how you can improve the way in which your drivers use fleet vehicles - efficiently and safely driven vehicles are less costly from fuel and servicing perspective.
- Provision of GPS Telematics
Telematics systems gather data on vehicle location, driver behavior, engine diagnostics, and vehicle activity - fleet operators can then use this data to manage their resources more effectively.
Generally speaking, fleet management outsourcing is an increasing trend. But is it the right move for your business?
Before making a decision, it’s worth conducting an evaluation of the duties involved when effectively managing a fleet and then assessing whether your organization has sufficient internal resources to conduct all of the required duties.
Fleet management duties include:
- Vehicle funding, sourcing, and purchasing
- Maintenance, vehicle breakdown, and recovery
- Procurement management and disposal
- Parking and fines administration
- Driver license verification, support, and training
- Health and safety compliance
- Vehicle tracking and communications
Given the wide range of duties involved in fleet management, outsourcing could be the best option for your business.
What are the Advantages of Outsourcing Fleet Management?
The following are six benefits of choosing a workforce provider that offers comprehensive fleet management services:
1. Brings best practices to your operation.
Fleet management outsourcing businesses are experts in their field, and new ideas may prove invaluable in streamlining your fleet processes and saving on costs.
2. Creates greater focus for your business.
Outsourcing fleet management responsibilities could enable your organization to focus on those tasks that more effectively drive the business forward instead of focusing on an area in which you may lack expertise.
3. Reduces risk.
Ensuring compliance and meeting industry standards can be onerous and overwhelming due to frequently changing legislation — outsourcing can reduce these worries.
4. Provides access to a deep pool of fleet management market knowledge.
A specialist fleet management business will be able to benchmark performance and identify shortfalls or areas for improvement.
5. Creates savings on maintenance-related costs.
Managing a fleet involves a capital cost — for example, you need to pay for facilities and equipment for maintenance as well as the related staffing costs.
6. Saves on time and costs associated with recruitment.
You need to find people to manage and maintain your fleet — do you have the time to get the best people for the job?
Fleet Management Support
Talk to us if you are considering outsourcing your fleet management function, we can advise upon the approach that will work best for your business.
Upon request, Workrise can provide comprehensive fleet management and support with GPS telematics, managed vehicle maintenance, and fuel programs, so workers are always provided with a safe and well-maintained vehicle.
Workrise also empowers workers with the right tools and equipment to get the job done safely thanks to our Fleet & Equipment Management team and HSE team. All Workrise fleet vehicles are equipped with onboard GPS Fleet Tracking, allowing for daily monitoring.
Weekly fuel, driving behavior, and mileage reporting are monitored closely. Total fuel and mileage data are input monthly to cross-reference and verify against other forms of reporting.
Get in Touch
It is vital that workers are trained to operate fleet vehicles safely. At Workrise, quality and safety are our top priorities. We offer more than 200 flexible safety, compliance, and HSE training courses online and in person. Together, we will find the right courses to ensure the workers on your job site meet your requirements.
Let us help you with training, staffing, technology, and professional services so you can get back to focusing on what you do best. Visit our website at workrise.com.
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