Gaskins: Evolving From A Financing Source To A Financing Partner

Trucking is complex and getting more so as we start the journey to a more sustainable movement of freight. While matching truck specs to duty cycle has always been important, the reality was that some fleets spec’d trucks for use in multiple duty cycles and in many cases, there were not a great deal of options, especially when it came to powertrains.

Today, it is critical that specs match duty cycle for improved efficiency and in some cases to meet regulations, which can vary state-to- state. While the way a vehicle is spec’d has always had an impact on its resale value, the reality is that some specs are going to limit the addressable resale market and that may affect resale value.

This is particularly true when it comes to engine specifications as some states are regulating the types of engines that can be operated within the state. While California is at the forefront of these efforts at limiting or even eliminating the use of diesels engines, they are not the only state that has set regulations for phasing out use of diesel engines. Even in states that are not regulating powertrains, more customers are including questions about fleets’ sustainability efforts in their RFPs and fleets can lose out on business if their trucks are not spec’d with sustainability in mind

Powertrains are not the only area that has become thornier. Advanced driver assistance systems (ADAS) are adding complexity to the spec’ing process — a problem that is exacerbated by nuclear verdicts being leveled against trucking companies if a driver is involved in an accident. ADAS encompasses a suite of options like lane departure warning, collision mitigation, blind spot warning, automatic emergency braking, etc. While all of these options make trucks and drivers safer, they all add to the cost of a new truck and can also affect the value of the truck on the resale market. There is also some concern about plaintiffs’ attorney groups using the fact that a fleet did not spec one of these safety technologies as a sign that it does not care about safety.

What does all this mean for companies that finance trucks?

I believe that fleet managers are going to expect their financing partners to be better educated on vehicle specs, not only so that they can determine proper financing terms, but also to help ensure that the trucks are spec’d properly for their intended use. That will become increasingly more important because, when it comes to alternative fueled vehicles, there is no one-size-fits-all approach. Unlike diesel-powered trucks which can be used in every application, alternative-fueled vehicles are more application specific, and a wrong spec could be disastrous for a fleet in terms of efficiency and total cost of operation.

Moving forward, the nature of the relationship between fleets and financing sources will need to evolve into more of a partnership where financing sources work closely with fleets to ensure that vehicles are spec’d properly from a powertrain, safety and efficiency standpoint.

Financing companies need to learn more about the specifics of a fleet’s operations, while also understanding the various available technologies and which technologies make sense for which applications so they can offer solid advice to fleet managers. This will help turn a transactional relationship into a true partnership that will keep a fleet loyal to the financing source.