16 December 2020
We speak to Paul Holland, MD of UK Fuel at FLEETCOR about how the fleet industry has coped during a turbulent year, and look forward to 2021.
How have your customers coped with the Covid crisis?
I think there has been significant variation between our customers when it comes to their experiences during Covid. Some of them, especially those such as public service and logistics fleets, have had hugely important roles to play and have never been busier. But of course, many others have found it a very challenging time.
There was a period in the first lockdown where mileages and fuel spend fluctuated wildly: between May and June, there was an increase of more than 2.5 billion business miles per month travelled in the UK, and some sectors saw consumption rise by 275% across that period alone. Of course, it was great they were getting back to work, but you still have to handle that large change in activity and spend.
What this period of upheaval has also done is given many businesses the opportunity to forensically examine whether they should be working differently – not just during the pandemic, but how they might shape their operations afterwards as well.
In the business payments and expenses sector, for example, we’ve seen that with home and flexible working, remote fulfilment and an emphasis on mobile services has come to the fore. That means companies are putting in place more robust procedures for spending authorisation and control of payments, as well as digital expense reclaim processes, which means ditching old, inefficient paper-based systems.
We’ve been very heavily involved in these changes with many of them. Because we interact in core parts of their business - in the movement of their people, vehicles and goods and at the financial level too - we have been able to give them insight, support and advice to help make well-informed, strategic decisions for the future.
And how did Allstar manage during the pandemic?
Within a week of lockdown, we had more than 90% of the team working remotely, and I am immensely proud of how incredibly well they coped with the change and the massive, unprecedented, demand to help support our customers.
But as we’ve gone through the year, like many companies, we have put a lot more focus on the team in support of their health and wellbeing, because for some people isolation is a real challenge. All-in-all though, we have maintained our SLAs, always answered the phone, replied to emails and been there for our customers, so I say it’s been pretty successful, given the circumstances.
Has Covid reshaped the business travel market forever, or will it return to previous levels as the effect of the virus subsides?
I think a lot of business travel that has been put on hold in 2020 will come back over the next year or two and that includes foreign flights as well as everyday driving.
Business has been conducted the way it has for a long time, for a good reason: you need the personal relationships and face-to-face interaction. With a doubt, using technology such as video is very helpful and can be an incredibly efficient way to keep in touch with clients and suppliers. But it is not going to fully replace in-person meetings.
Take Allstar for example. We set great store by face-to-face meetings, because we don’t believe you can get to really know and understand a business in a deep, useful way without going to see it in operation.
But there will be a balance, and it’s about making the right choice based on the specific interactions. So it might be with established relationships, meetings such as regular quarterly reviews take place online, but the more complex, deeper dive work is conducted face-to-face.
Oil and fuel prices fell sharply earlier in the year, and have risen slightly since. What are the likely movements in 2021?
The announcements concerning the various vaccines are very positive, not only from a health standpoint, but for the effect they will have economically too. Hopefully, this means people and goods will be able to begin moving again, and the promise of that has already been reflected in an increase in oil price.
The mid-term future is less clear and oil prices are all about supply and demand. Over the past few months major oil companies have reduced costs, production and employee numbers and as a result they are not able to just turn the taps back on to full overnight. There are massive infrastructures and complex supply chains involved that take time to ramp up. And they won’t be looking to quickly increase supply either until they are convinced the demand is there. A huge oversupply situation would be very damaging for them.
Then there is the change of president in the USA. Moving from a very pro-oil president in Trump, to one who has been strongly advocating a move to sustainable power as Biden has, could have an effect on oil prices. Materially, nothing might change for the foreseeable future, but often it is as much about perception as reality, so we wait to see what impacts any new policies he implements might have.
So I think 2021, as the oil market figures out the precise global demand, is likely to be incredibly volatile. If you’re a fleet, keep in close touch with firms like Allstar, because we are monitoring the situation all the time and can help to advise.
Electrification has been a prominent subject in 2020. How do you balance customer petrol, diesel and electric needs as they change in the future?
The Government is shaping its transport policy based on the proposed 2030 timeline for the ban on petrol and diesel vehicles. But there are still operational issues with pure electric vehicles around range, cost and infrastructure, and will be for some time.
We are fully committed to the change, but we also understand a lot of our customers will be operating a mixed powertrain fleet for almost two more decades. After all a lot of vehicles - and in particular commercial vans and trucks - will be petrol, diesel or some form of hybrid deep into the 2030s.
That’s why we’re expanding our Allstar One Electric card, with more charging networks coming on stream all the time, giving customers the ability to pay for everything a business running a mixed powertrain fleet needs across petrol, diesel and electric.
This means offering the fleet customer simplicity, control and value, and the ability to understand costs in a comparable, aggregated way, where all those different invoices and ways of paying dovetail seamlessly into one easy-to-use reporting system.
Their job is going to be hard enough as it is, introducing new technologies. Our job is to make understanding the on-the-road costs of each powertrain easier.
And finally, what would be your main hopes for 2021?
Mainly to just see the back of 2020, and return to some form of normality! I think this year has very much focussed the minds of people on what is important and also made them realise what they can achieve when they are challenged. I hope that realisation of what can be done is taken forward in order to achieve great things.