2023 in Fleet Management: A Reflection
2023 was an impactful year for fleets across all industries. It brought new obstacles, and equally opportunities, for the way they manage some of their most integral processes - such as cost control, incident response, and vehicle repair & maintenance.
Since 2003, sopp+sopp have worked with some of the UK’s best-known fleets to deliver fully-tailored, responsive accident management services. In that time, we’ve seen our fair share of changes and challenges throughout the industry - all of which have been instrumental in the approach we take today, and the innovations we deliver.
Here we take a look back at some of the most prominent challenges for fleets in 2023, assess how they responded to them, and explore sopp+sopp’s approach for 2024 and beyond…
How did we start the year?
At the beginning of 2023, the industry was still grappling with the hangover of many challenges from the previous year.
A post-pandemic shortage of repair capacity was creating a ‘new normal’ in the repair space, with demand fast increasing, and repairers forced to be more selective of the work they accepted.
This contributed to a significant increase in repair lead times, and in Q4 of 2022, the average lead time stood at around 38 days[1] - an increase of 18 days from the previous year.
Interest rates also continued to rise throughout the last quarter of 2022, leading to significant inflation across all ends of the industry. This contributed directly to higher operating costs for fleets, and increased vehicle repair outlay - limiting their ability to mitigate financial risk.
By the end of 2022, average repair costs had risen by more than 7% on average[2] from the first half of the year, as general inflation and parts sourcing challenges continued to intensify.
Fleets therefore began 2023 facing already significant operational challenges, amounting to both financial pressures, and delays within their accident management processes.
The biggest challenges for fleets throughout 2023…
Many of the above challenges grew only more intense throughout 2023, exacerbated by repair market pressures, resourcing challenges, and continued supply chain shortfalls.
Here’s a look at some of the key obstacles fleets faced throughout the year, and how they impacted their day-to-day operations…
A shortage of accessible repair capacity
2023 saw the continued impact of the repair industry’s post-pandemic capacity challenges. With demand for repair services increasing in the first quarter of 2023, and capacity still short, many repairers were forced to become more selective of the work they accepted.
Additionally, the repair industry reported significant staff resourcing challenges, with 41% of bodyshop professionals reporting this to be the biggest threat to their business[3] in 2023.
This led to delays in both lead and cycle times for fleets throughout the year, as many repairers struggled to keep up with significant demand for their services.
By September, repair lead times had risen to an astonishing 42 days on average, an increase of 4 days[1] from the same point in 2022.
While key-to-key times did curtail throughout the year, falling from an average of 21 days to 17 days, the above increase meant total cycle times remained high, sustaining at 2022 levels of 59 days on average.
As a result, many fleets were still waiting much longer than pre-pandemic for their vehicles to be repaired, leading to challenges in controlling the costs associated with vehicle off-road periods.
Vehicle parts supply chain shortfalls
2023 saw continued difficulty for international parts supply chains, as inflationary pressures, increased demand, and logistics challenges made it more difficult for repairers to access replacement components.
As a result, almost 40% of repairers reported that up to one in five of their jobs were affected by delays in parts sourcing[3] in 2023.
As expected, this left many fleets facing significant delays in getting their vehicles repaired post-incident, with total cycle times maintaining the high levels seen in late 2022.
This further exacerbated cost control challenges for fleets, and brought new considerations for their parts strategies - including increased uptake of ‘green’ and aftermarket parts.
Claims inflation & third-party cost control challenges
Claims inflation remained a prominent issue for fleets in 2023. According to Direct Commercial, more than 78% of fleet operators[4] reported an increase in complex losses in the last quarter of the year.
With prices rising right across the claims supply chain, it’s no surprise that fleets struggled to control and mitigate the costs of incidents, especially where third parties were involved.
This led fleets to make new considerations for how they manage third-party claims, including making use of innovations for capture and intervention, and utilising solutions like Uninsured Loss Recovery for non-fault incidents.
They also sought to embrace new cost and time-saving measures throughout the repair journey, including utilising roadside/mobile repair when appropriate, and harnessing green parts rather than new OE.
However, despite these concessions, most fleets still saw a significant increase in costs at every end of the claims process, making it a challenge to mitigate financial risk effectively.
Adapting to EV, and finding the right data to drive the transition
Electric vehicles remained a prominent talking point in the fleet space throughout 2023, as more operators began considering their own approach to the transition.
Uptake of electric commercial vehicles increased by more than 20% in 2023[5], as more fleets began embracing low-carbon vehicles, and working towards the 2035 transition.
As any fleet manager will understand, any change to your vehicle makeup requires intense planning, and consideration of both market and internal data to inform a robust purchasing strategy.
This is even more critical with EVs, with complex onboard technology, range limitations, and repair implications posing immense considerations for every part of your operational strategy.
However, accessing this data can be a challenge without the right industry partnerships - especially with EVs being so new to the commercial market.
This led fleets to consider how they could utilise their existing partnerships, and forge new ones, to provide the intelligence required to support their EV strategy.
Our own 2023 research with Gecko Risk highlighted huge variation in repair costs for different EV manufacturers. For example, Mercedes Benz and Tesla cost around £3,000 per repair on average, while Volkswagen EVs cost just £2,320 on average[6].
This highlights the importance of having the right data available to inform your purchasing strategy, in order to calculate a more accurate ‘total cost of ownership’, and avoid unnecessary outlay down the line.
What have fleets done to mitigate these challenges?
With the scale of the challenges faced by fleets in 2023, operators and their suppliers have taken action to mitigate the associated risks, and future-proof their accident management strategies.
Here are some of the actions fleets have been taking to overcome these obstacles:
Diversifying their repairer partnerships
With repair lead times increasing across the board in 2023, many fleets set out to diversify their repairer partnerships to incorporate solutions like roadside, mobile, and SMART repair.
These alternatives can have huge benefits for repairing roadworthy vehicles, which may not need to be deployed to a bodyshop. Lead times for mobile and roadside solutions can be much lower than bodyshop repairs, allowing fleets to alleviate some of the delays they’re facing throughout the repair process.
Utilising these solutions effectively requires strong triage & engineering processes in place to correctly identify eligible vehicles, and deploy them for repair quickly. Fleets have therefore given intense consideration to how they report, review, and assess vehicle damage post-incident - focusing on making these processes as swift and accurate as possible.
Embracing new solutions to assist with cost control & mitigation
With the challenges of claims inflation, and lengthened off-road periods leading to increased outlay for fleets, many operators have sought to strengthen their cost control strategies across the board.
For many, this has meant focusing on third-party capture and intervention, swift & accurate incident reporting, and embracing alternative parts and repair methods where possible.
Incident reporting & response
Fleets have been applying new solutions to increase the speed and accuracy of incident reporting, including electronic Notification of Loss (eNOL) solutions. This ensures that drivers can report incidents quickly and consistently, allowing fleets to act swiftly to control the costs of claims, and enhance their third-party intervention practices.
Embracing alternative parts supply
With the current shortfalls across the vehicle parts supply chain, fleets have been taking new measures to minimise delays, and reduce the associated costs. This has included rethinking their approach to green/recycled parts, which can often be sourced more quickly than new OE, and provide the same safety & quality when utilised correctly.
Mitigating loss in third-party claims
As well as enhancing their third-party capture and intervention practices, fleets have also increased their adoption of proactive cost-control solutions like Uninsured Loss Recovery. This has helped them to significantly reduce the cost of non-fault claims in many cases, and offset some of the impact of claims inflation.
Harnessing supplier data & insights to mitigate risk
Data has played a huge role in helping fleets to mitigate some of their most pressing challenges. Working closely with their suppliers, they’ve sought to access more insights to increase their understanding of operational pressures, and take proactive steps to mitigate them.
This has included insights around the cost, availability, and turnaround of repair services, as well as key data on accident frequency, causality, and incident reporting.
The demand for this data is only increasing, as more fleets recognise its value for developing more responsive, cost-effective accident management strategies.
As a result, fleets and their suppliers are forging new partnerships in order to access this data, and evaluate some of the most prominent trends across the industry.
sopp+sopp’s approach - 2024 and beyond
sopp+sopp pays close attention to the emerging trends, challenges, and opportunities throughout the industry. We use these insights to empower our customers to overcome their unique obstacles, and develop new innovations to future-proof their strategies.
Here’s a look at some of the steps we’re taking to strengthen our solutions throughout 2024 and beyond…
New digital solutions to support accuracy & efficiency
We focus on technology-driven accident management solutions, which help our customers to increase accuracy and harness time-saving automations throughout the process.
We’re constantly innovating our existing technology, and developing new tools based on the feedback we receive from customers, and the unique challenges they encounter.
In 2023, we launched Activate Initiate - our white-label eNOL solution for fleets, which allows drivers to report incidents quickly and accurately through an intuitive mobile web-app. This is just one example of our self-developed fleet innovations, which are built and adapted in partnership with our customers to target industry challenges directly.
Read more about sopp+sopp’s fleet technologies here
Providing actionable data & insights for our customers
We recognise the importance of data in the fleet space; it’s what provides both ourselves and our customers with the insights we need to identify, anticipate, and overcome market challenges.
That’s why we’re focusing on maximising our data provision, both through tracking and assessing our internal trends, and partnering with industry experts to gain their perspective.
In December, we partnered with Gecko Risk - insights experts in the AFV space. Our partnerships allows us to track some of the most prominent trends and challenges faced by EV drivers, repairers, and insurers.
This helps us to support our customers who operate EVs, and those looking to make the transition - with valuable insights around repair costs and turnaround for some of the biggest EV manufacturers.
This is just one example of the solutions and partnerships we’re forging to deliver more insights for our customers, and help them to overcome some of the industry’s most pressing challenges.
Learn more about our partnership with Gecko Risk here
Supporting new opportunities for cost control
With claims inflation having such a huge impact on fleets, we’re working with our customers to identify cost-saving solutions that work for them, and enable them to mitigate financial risk.
This includes through our focus on swift & accurate incident reporting, and effective third party intervention, but also our approach to repair practices and parts sourcing strategies.
We collaborate with our customers to understand their existing repair preferences, and identify any cost-saving solutions which may be of value - supported by our own data analysis.
Through our sister company, Activate Parts, we have access to a wide range of sources for replacement vehicle parts - including green and aftermarket provisions.
We also work closely with providers of alternative repair services like mobile, roadside, and SMART repair. This helps us to identify and address the potential cost benefits of these alternatives, and work with our customers to assess their compatibility with their fleets’ requirements.
Furthermore, 2023 saw the launch of our in-house Uninsured Loss Recovery provision, through which empower our customers to recoup some of the costs associated with non-fault claims. This allows them to offset some of the impact of claims inflation by minimising losses incurred through vehicle repair, off-road periods, and even lost earnings.
We understand that cost-control requires a multifaceted approach to identify opportunities at each end of the fleet supply chain. That’s why we focus on delivering a versatile range of cost-saving solutions for our customers - which address their challenges directly, and are tailored to meet their specific requirements.
Stay tuned for more insights from sopp+sopp in 2024, or get in touch with our team below to discuss our award-winning range of fleet management solutions:
