As the world continues to navigate the impact of COVID-19, your industry and pace of customer activity are likely serving up some common fleet utilization challenges – either scrambling to ensure your vehicles can support increased demand, or searching for ways to turn slowing vehicle utilization into saving opportunities to offset decreased demand.
If you’re grappling with a downturn in customer activity due to the pandemic and evaluating short-term cost reduction opportunities, sometimes the best savings are sitting right in your parking lot. Temporarily parking your higher-cost assets can help lower operating costs without reducing your inventory, ensuring you have vehicles ready as business returns to normal. Is your fleet a good fit for this strategy?
Evaluate your needs and opportunities
If your business is experiencing a downturn in demand and you’re looking for ways to control costs right now, ask yourself these questions to see if hitting the brakes on your high-cost vehicles is the right move:
- Are my older vehicles an absolute necessity in this moment?
- Can I shift utilization to my younger, more cost-effective units and still support operational demand in a fiscally responsible way?
Parking your older, higher-cost units can drive value by:
- Reducing your operating expenses in the short-term.
- Keeping vehicles ready to hit the road quickly when demand ramps up.
- Avoiding any temporary valuation decreases in the resale market.
- Dodging potential difficulty in repopulating your fleet once OEM factories reopen.
The one long-term impact to consider is the declining equity in these vehicles over time, depending how long these units will remain underutilized and where you could have potentially reallocated any sales proceeds.
Consider the logistics
If you’re ready to start parking vehicles, work with your fleet management partner to pull together a prioritized list of vehicles based on operating cost data and criticality. You’ll also need to consider the tactical steps involved as well as your plans for a comeback:
- Do I have space available to store complex vehicles safely?
- How will parking vehicles work across all locations?
- Are there any considerations I need to evaluate for international operations?
- What’s the best way to get these vehicles back in service once we are fully operational again?
Remember that parked vehicles still need love, too. Check out this helpful strategy for maintaining idle vehicles to make sure they remain in top shape and are ready to get back on the road soon.
Lean on your partners
Our team of fleet professionals is available to help you determine which vehicles can be parked to maximize your cost savings while ensuring you remain well positioned to meet the demands of your business.
Please continue checking ARI’s resource center for information from us and our industry partners, and sign up for daily COVID-19 updates delivered right to your inbox.