As 2022 kicks off a few of leaders in the fleet and supply chain industry offer some thoughts on the year ahead.
Olesksii Kosenko, FourKites’ Director Carrier Network Operations, EMEA says: “2022 will be the year the supply chain industry automates big time. Smart carriers and shippers will turn to technology to save time and money, while keeping their customers happy.
“Driver shortages, the breakneck speed the Omicron variant is spreading, more port closures due to COVID outbreaks and tighter border controls cast a grim outlook on 2022. Shippers and carriers will be under more pressure than ever to deliver goods as quickly as possible. There is no longer enough time to do work manually.
“We saw more carriers than ever sharing visibility data in 2021 to better serve customers in a time of driver shortages and port closures. In 2022, this trend will continue with more carriers than ever seeing the secure and private sharing of real-time visibility data as a way to stand out amongst competitors. It will become a requirement from their customers who need a crystal clear view of their horizons, as the world of transport becomes increasingly complex.
“Also in 2022, more drivers will turn to technology that enables them to upload images or documents much faster than sending updates manually.
“Supply chain leaders, who haven’t yet already done so will turn to supply chain visibility to know how much product is sitting in the port of origin, at the port of destination, or at the warehouse, cross-dock or in a rail car.”
“Sustainability will be at the heart of the business agenda in 2022 following the announcements made at COP26 in Glasgow. With transportation being the second most polluting industry for carbon emissions (behind construction) then all companies have a responsibility to look at how they run their fleets.
“The only fleets can reduce their carbon footprint is to manage their fleets and measure their outputs. And the only way they can do that is to adopt telematics technology. That should be their aim for 2022, whether that is running conventional Internal Combustion Engined (ICE) vehicles, or by switching to Electric Vehicles (EVs).”
Electric vehicle adoption:
“2022 will be the year that electric vehicles really start to make inroads into the mainstream. Sales of EVs have already overtaken conventional diesel engines and could be ready to overtake all forms of Internal Combustion Engined (ICE) vehicles in 2022 / 23 (Forbes). With more electric truck models due to enter the market next year, this could be the tipping point for EV uptake.
“Geotab’s Electric Vehicle Suitability Assessment (EVSA) can provide the tool to assess whether fleets are ready and which vehicles are suitable for electrification. This can provide the incentive for companies to drive their own sustainability policies forward and adopt a carbon-free future.”
Supply chain disruption:
“Last-mile delivery will become even more crucial in 2022 as the effects of the pandemic continue to ripple through society. Companies need to adopt fleets that can meet modern-day demands for online shopping and to react as (some) countries continue with national lockdowns. A shortage of delivery drivers will place a huge strain on fleet operators, who will need to ensure they adopt telematics solutions to ensure the maximum efficiency of their fleet.”
Telematics in insurance:
“Data will be used to personalise more and more products in the insurance industry. For car usage, for example, telematics can provide a greater level of insight for insurance purposes. It can assess the habits of individual drivers, and look at their speed, acceleration, cornering, and braking characteristics to set the parameters of their insurance risk. We’ll see the widespread adoption of telematics to set new rules for the way car insurance operates in 2022.”
“Cold chain logistics will continue to grow in importance as we continue to drive down food wastage in the supply chain. Logistics managers will continue to monitor and assess the condition of perishable goods whilst in transit. They will need access to up-to-the-minute data to ensure all goods are being transported safely.
“This is especially important when it comes to the transportation of vaccines and pharmaceuticals. We’ll need to ensure optimum conditions to guarantee that medicines reach their destination in optimum condition and ready for use.”
Government and public sector:
“The government and public sector are taking the lead across Europe in electrifying their own fleets and we’ll see more evidence of that going into 2022. But with aggressive targets to clean up our air and remove conventional carbon-producing vehicles from our roads, governments also need to be doing more to incentivise private sector fleets to make the switch to Electric Vehicles (EV).
“That includes maintaining or even increasing, state subsidies to buy and maintain EVs. We can’t wait until 2030 to reduce our reliance on the Internal Combustion Engine (ICE). We need to start making the switch to clean electric energy now.”
Alfonso Martinez, Managing Director of vehicle leasing experts LeasePlan UK
2021 has been quite the year. As the world continued to battle waves of the Covid-19 pandemic, Joe Biden became president, and COP26 saw leaders come together to face up to climate change. Here in the UK, industry has experienced profound change too – perhaps none more so than the automotive sector.
The rising cost of fuel, drastic changes to electric vehicle (EV) incentives, and the growth of Clean Air Zones have kept us on our toes. Then there’s the issue of Fuel Duty, which continues to be the elephant in the room at Westminster.
As we go forward into next year, there’s more change ahead. But we could also get answers to questions that have been burning away for some time, which could bring greater clarity to our industry. Here are our top five predictions for what’s in store for the fleet sector in 2022.
The government may clarify the future of Fuel Duty
In the short term, we know what’s happening with Fuel Duty. In his Autumn Budget, perhaps mindful of the sky-high prices at the pump, Rishi Sunak announced that it would be frozen at 57.95 pence per litre for the 12th year in a row – until at least April 2023.
But there’s a bigger question surrounding Fuel Duty in the medium-to-long term: what will the Chancellor do about the lost revenues as we switch to EVs? The Tony Blair Institute has calculated that the Exchequer stands to lose about £30 billion by 2040 – that’s a significant loss of income for the government.
Fundamentally, this means that the government will need to find a way of raising money from EV drivers, too. However, despite much speculation and anticipation from fleet managers thinking of making the switch, these plans weren’t featured in the Autumn Budget. This means that they could be due in 2022.
Additional government legislation to accelerate electrification could be confirmed
Fuel Duty isn’t the only motoring tax on the government’s to-do list. We’re still waiting for a number of potential changes to Vehicle Excise Duty (VED), following numerous announcements by Chancellors over the years. Back in 2018, Philip Hammond embarked on a consultation to discover how VED could better encourage the uptake of cleaner vans. And then, in 2020, Sunak did likewise for cars. Neither of these processes have resulted in any legislation – yet.
In fact, if we look beyond taxes, we’re still waiting for the government to announce the outcomes of a number of other reviews that will also impact fleets. For example, in the summer of 2021, they launched consultations into the possibility of a zero-emissions vehicle mandate.
Of course, some reviews do just fizzle out – we shouldn’t necessarily expect to have all these policy questions resolved soon. But the fact remains: there are several legislative interventions that the government is due to make along the Road to Zero – and some of them could be announced this coming year.
The government may continue to chip away at EV incentives
There are of course some policy changes that the government have already set in stone.
From April 2022, the Electric Vehicle Homecharge Scheme (EVHS) – which currently offsets 75% of the cost of installing a charge point at home, up to a maximum of £350 – will no longer be available to homeowners in single-unit properties. Instead, this subsidy will be refocused on leaseholders, renters and those living in flats. A positive move to redirect funding where it’s needed most, but a notable step in the direction of the removal of EV incentives.
After this announcement, many expected that electric car grants would be removed completely. Instead, the government recently announced cuts to the Plug-in car and van grants. While it’s promising that the grant wasn’t scrapped altogether, there’s a chance that it might end up being reduced so much that by the time it stops, its unnoticeable.
As we’re making real headway on our journey to EV, it’s no surprise that the government are chipping away at incentives. And it’s highly likely that we’ll see more development as 2022 unfolds.
Clean Air Zones will continue to pop up
While EVs are certainly starting to tip the scales, it’ll take some time for the whole country to go electric. That’s why local governments and councils are implementing Clean Air Zones (CAZ), where special action is taken to reduce emissions from road transport and improve air quality.
In 2021, not only did London expand its Ultra Low Emission Zone to the North and South Circular Roads, but Bath, Birmingham and Portsmouth also introduced their own CAZs. And it doesn’t stop there – we can expect plenty more in 2022.
For example, Bristol is awaiting final sign-off for a small CAZ in the city centre that would impose a £9 daily fee on cars and vans that don’t meet minimum emission standards. Similarly, Greater Manchester has earmarked the end of May for its own CAZ, and Bradford, Sheffield, Oxford are starting to share their plans too.
The rise of Clean Air Zones – each with their own standards and charges – means that the country is going become a sort of legislative patchwork in the years ahead. Fleet managers will need to be prepared for the effects wherever they operate.
The pandemic will continue to impact our industry
As we start 2022 off with a new variant, and more UK Covid-19 cases than any other point during the pandemic, it’s difficult not to wonder what next year will have in store. Of course, we’re all more accustomed to constant change by now, but that doesn’t make things any easier.
The important thing to note is that Covid-19 has not gone away – and neither have its effects on the economy and supply chains. The semiconductor shortages that have affected vehicle production and delivery in 2021 are, according to many manufacturers, going to persist in 2022.
While there are many unknowns to navigate as we head into next year, what’s vital is that we all remain vigilant. Fleet managers should focus on staying up to date with legislative changes, providing drivers with everything they need to know, and planning ahead as much as possible. There may not be a clear and obvious path for the UK motoring industry to take in 2022, but we’re confident that we can continue to lead the journey to electrification and keep everyone on the road.
Adam Hall, Director of Energy Services at Drax
2021 was a record-breaking year for the EV industry. We saw more registrations for plug-ins than in the last 10 years combined as fleet-operating businesses continued to lead the transition. Next year will be the most exciting one yet, with more drivers than ever before starting their EV journey.
From a legislation standpoint, there are big changes ahead. All new commercial sites like supermarkets and offices will be required to have EV chargers installed, as will all new-build homes. The move is expected to expand the UK’s existing EV charging network by around 145,000 chargers. This is a welcome development in the lead up to the 2030 ban on sales of new petrol and diesel cars and vans, and will provide EV drivers with the assurance they need to make the switch with confidence. Fleet-operating businesses managers will also benefit from significant capital savings in the future as they won’t have to retrofit new premises to fit their electric fleet.
2022 will also see the introduction of more Clean Air Zones (CAZs) across England. Bristol, Greater Manchester and Oxford all have plans to implement CAZs in the new year. Diesel and petrol fleets operating in these areas will be subject to hefty charges, so expect to see an increase in EV orders around the time of the CAZs going live.
Meanwhile, the electricity we power our EVs with is expected to become greener in the new year. The UK has just announced £224 million will be available through Contracts for Difference for renewable energy projects, with the funds being allocated in the spring/summer of 2022. This means that 2022 will be a record one for investment in green energy. Offshore wind projects that secured funding in 2021 will begin construction during 2022, which is expected to double the UK’s renewable generation capacity. Meanwhile, the UK’s solar rooftops are expected to exceed 500MWdc in 2022, with panel installations expected to increase by 20%.
In 2022, electric vehicles will continue to work their way into everyday lives, and renewable energy will become even more ingrained in society. There’s work to be done, but we’re looking forward to another year of innovation and electrification.