Richard Lilwall 23 February 2021

Why green will be the next tick box for procurement

Why green will be the next tick box for procurement image

By the end of the 2020/21 budget, local councils across the UK will have collectively spent nearly £50bn in public money, something that comes with high levels of accountability as well as the necessity to flex spending in line with evolving public consciousness.

As central government puts its stake firmly in the ground over the pursuit of a carbon neutral future with the ban on the production of combustion engine cars, the ripple effect has firmly landed with councils, who have responded to our environmental awakening with very clear strategies for change, particularly when it comes to the use of vehicles.

One such council is the Royal Borough of Kensington & Chelsea, which is already two years into a four year strategy to ‘green the council’s and its contractors fleet of vehicles and minimise the environmental and health impacts they cause’, with a ‘bold aim to go fully electric by 2022.’

The scene has been set and the onus now is on those providing the fleets, as well as those procuring the services of these fleets. Moreover, while cost will always be the first box on the procurement checklist, being able to offer a green fleet without loss of service or efficiencies will inevitably be a – if not the – deciding factor in fleet tenders being awarded.

This affects two types of operator: organisations that currently hold council contracts, which will no doubt be coming under review, and ones specifically looking to win said contracts. However, there are very few operators out there who can just replace their existing fleet with greener alternatives to win a council contract – there may not necessarily be the right vehicles at the right price currently in the market to make this a reality.

This is where the power of AI can be harnessed, ensuring that operators can go from data to decisions. For those re-tendering existing contracts, there are AI tools that can plug into telematics platforms and analyse all trip data to provide operators with detailed recommendations of where electric vehicles could be adopted into the parameters of the contract. Not only that, the AI tools can outline the total cost of ownership (purchase price, residual value, taxes, insurance, maintenance, electricity costs), the ideal vehicles to switch to, the types of charging infrastructure required and where it should be placed, to name but a few benefits.

So, while a fully electric fleet may not be possible based on the type of trips/services required by the councils, a detailed analysis of the short and long-term solutions will go a long way in helping local councils remain fully accountable and on track for their respective green fleet strategies. In the meantime, vehicle manufacturers will continue to develop cost-effective options to cover the remaining gaps.

When it comes to the future of fleet contracting for local councils, green is no longer a nice-to-have – it is an expectation. Procurement departments are being judged on more than just their savvy spending, but also their moral spending. This ensures protection for both the services available to the public as well as the environment in which those services are offered.

Local government operators who successfully become part of that solution will be the ones who recognise sustainable fleet management practices are the new-normal and enable the power of AI to do some of the thinking for them in re-evaluating their offering.

Richard Lilwall is vice president and managing director, Europe at ‎Teletrac Navman UK

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