Report reveals why fleet size no longer guarantees profitability

Road transport operators can no longer rely on mere expansion of resources to be proportional to profitability. Large fleets are susceptible to the same capital-intensive issues as smaller ones with the rate of transport business closures in the UK, USA Europe highlighting the urgent need for new solutions to increase business sustainability.

According to a recent trans.info study of European trucking companies the next two years will further test the resilience of the market by which only operators with “operational maturity” will survive. Businesses that make the best use of existing resources are those with the highest chance of survival not those with the biggest fleets, notes the report.

The IRU says road tolls in some countries are now higher than fuel and from 2026 all EU countries will be charging a CO2-based fee for truck journeys. Transport companies who don’t or can’t decarbonise their fleets will be paying more per km to travel and will find it harder to win tenders which are increasingly awarded on price and verifiable CO2 reductions.

A Eurowag report shows a growing divide between firms significantly investing in decarbonisation and those who aren’t.

Carriers with low levels of digitisation will struggle to calculate emissions and therefore fail to meet tender requirements.

Carriers with ageing fleets will pay more per km under the CO2 fee system

Carriers that fail to reduce empty kms will not be able to sustain margins as all operating costs continue to rise.

The report goes on to take a closer look at the three new pillars of business success:

Sustainability is no longer an optional “nice to have” business strategy. It’s a deciding factor in winning contracts. ESG data, fleet carbon footprints, alternative fuels and compliance with upcoming regulations are the new norms.

Cost Efficiency must be driven throughout every aspect of the business and should be pursued as much as revenue, not just fuel, but throughout every cost area.

Digitisation should be embraced to drive efficiency continually. Telematics, digital platforms and AI can remove empty legs, reduce resource requirements, reduce unplanned maintenance and measure ESG in real time. Digitisation is one investment operators can make that reduces costs quickly and continually.

The challenge for smaller fleets is understanding these trends and deciding which technology is the best for them, which doesn’t necessarily mean the most expensive. New AI technology is reducing the cost of repetitive work such as tacho analysis, planning and vehicle data.