How contract hire can solve fleet supply chain problems

Supply chains have been severely disrupted at the hands of Brexit, the pandemic and the war in Ukraine.

Paul Beddows, sales director

Dawsongroup emc, explains how municipal fleet managers can navigate these extreme supply and demand issues.

The current supply chain woes have hit the fleet sector badly in 2022, with long delays, availability issues and rising costs causing major problems for many businesses and local authorities delivering vital municipal services like street cleaning.

Problems initially arose after Brexit, when we started to see significant import issues, challenges accessing parts and lorry driver strikes. Then the pandemic hit and vehicle shortages and delays only intensified. The war in Ukraine has also exacerbated the situation, pushing up energy and material costs, with the price of steel now astronomically high.

However, despite these issues, demand has remained the same, leaving municipal fleet managers with a challenge on their hands. How does a local authority or business that relies heavily on its vehicles stay operational and deliver the task at hand, when faced with these complexities?

Here are our top tips for overcoming the currently uncertainty in the supply chain:

1. Switch your asset management approach

If you own your assets, you have little room for adjustment when it comes to fleet management, but contract hire gives you flexibility. You have more options to switch vehicles as your requirements change, ensuring that your fleet is always fit for purpose. Due to the buying power of the Dawsongroup, and our forward planning process, we can purchase bulk amounts of stock so we are ready and waiting to support new and existing customers. This gives our contract hire clients the pick of the most prestigious specialist vehicles on the market, even when other providers are struggling with vehicle availability. This flexibility means that we can fit around the client’s requirements, to ensure we are always meeting their needs at any given time. This approach significantly de-risks ownership, protecting budgets with just one monthly payment and no costly upfront overheads.

2. Take care of your assets

Keep your vehicles in good condition, and increase their lifespan, through regular servicing and maintenance. This not only ensures that the asset remains in a good condition for future customers, but it also retains a higher end-of-contract value. We have a team of manufacturertrained engineers that provide support to our customers across the UK. We perform regular vehicle inspections and services to keep our machines in outstanding operational order and we have the full audit trail and vehicle history to back this up. We fix our maintenance costs within our weekly rental rate and our high standards of service and maintenance ensure that the residual value is at its highest at the end of the vehicle's life.

3. Keep assessing your needs

As a customer-focused company, we offer monthly, quarterly or bi-annual review meetings to discuss service performance and review any out of contract costs. We can also provide you with weekly and monthly KPIs to help you keep on top of operations. This way, we can ensure that you are getting the best solution for your business and can continue to improve our already high standards of service.

Moving forwards

We anticipate that these supply and demand issues will continue to have a knock-on effect for at least the next 12 months, and even when they are resolved, we expect there to be a major backlog, sparking even more of a shift towards contract hire.

If recession does hit in the coming months, contract hire will be a valuable option for fleet managers, enabling them avoid the initial outlay of investing in a depreciating asset. They can benefit from regular monthly payments that keep them operational and on the road, whilst protecting their budgets.