EVs, alternative fuels remain transportation's future with Fleet Advantage's Brian Holland
Welcome to The Dig, where equipment finance news editors connect with industry leaders and dealers to discuss news analysis, market trends, tips, and more. I am Johnnie Martinez II, Senior Associate Editor of Equipment Finance News, the one news source for both dealers and lenders.
Today we're joined by Fleet Advantage's Brian Holland, and I'll let him introduce himself. Hey, good afternoon, I'm Brian Holland, CEO of Fleet Advantage, delighted to be here. Delighted to have you, and I want to start off, for people who maybe aren't as familiar with you guys, who is Fleet Advantage, and what role do you guys play in the equipment industry, specifically the transportation industry? So Fleet Advantage is the largest independent lessor for heavy-duty Class A trucks in the country. We're also the leading innovator for specialty financing, fleet data analytics, fleet management services, and life cycle cost management. We serve more than 50 of America's top corporate transportation fleets, and Johnnie, while we're technically a specialty finance business, we're better described as a business intelligence or an asset management firm. We use data analytics, deep industry expertise, and flexible financing solutions to help our clients make better decisions about their fleet, to improve productivity, to reduce their environmental footprint, and save millions and sometimes tens of millions in operating costs. So our innovative life cycle management program also helps fleets to meet their ESG objectives while effectively managing their transportation assets. Right now, we're helping our clients plan for the future and deal with the rapidly changing landscape. To your point, the current state of the market has been in such a flux, the rapidly changing landscape, as you said, and some of that is also the role that you guys have just had to play has changed, and the role that lenders have had to play has changed, but with that in mind, how do you evaluate the current state of the transportation and fleet finance market? You know, despite all the economic challenges that are facing the transportation sector today, it's a fascinating time in the industry. All of the experts are predicting the largest truck pre-buy ever in 2025 and 2026, due to the EPA's 2027 NOx rule, the California Air Resource Board mandates, and the allocation, which is driving a shift to zero emissions trucks. And other states have been following suit. So, we all know that it's a cyclical market, but now more so than ever. We came out of COVID and post-COVID with a lot of equipment on allocation. Demand was high, production was limited, and there were lots of supply chain disruptions. Now, fast forward to today, it's a buyer's market, but that's going to change quickly, and then we'll be right back into a period of allocation and rising prices. So, this really emphasizes the need for flexibility and agility to be able to respond to changing market conditions, and we're advising our clients to have a long-term strategy to navigate the next few years. You talked about a few things there that sort of went to how you guys have been able to be successful in this more challenging environment. The flexibility, the talking strategy with your clients, is there anything else that really stands out to you in terms of how Fleet Advantage has been able to have a strong 2024? Well, I would tell you that there are opportunities in every market. We listen to what our clients are telling us and the challenges that they're facing, and then we look for innovative ways to help address those challenges. We introduced a number of new products during this past year. We introduced new analytical navigator tools for intelligent decision-making to help clients identify the appropriate equipment to help continue to reduce emissions, which in many cases remains focused on adopting newer clean diesel technology. We also partnered with FleetNet America and Cox Automotive to provide organizations with transportation fleets, specialty financing with reliable access to a nationwide maintenance solution, and we also introduced our EVPath program to help support companies with transportation fleets that are transitioning to EV and alternative fuel trucks. So under this program, we matched the monthly payment on the lease of an electric truck to that of a diesel truck, which represents a more digestible investment for the fleet. This could represent savings to the fleet of up to $3,000 per truck per month, in addition to offloading the bulk of the equipment's residual risk. So education is also a big part of our mission, and we've recently held a series of webinars to help fleets navigate the allocation and emissions mandates. And all of these innovations have really helped our clients, but they've also helped us to surpass, you know, $1.1 billion in syndicated lease volume over the past 12 months. Well, that's amazing. And you talked about it quite a bit there. You know, obviously there's a little financial success about it, but the education side of it and the approach to sort of EVs with the webinars and with the EVPath program, and when you think about all that and putting it together, you know, there's a lot of conversation as to what the future is going to look like as far as EVs go, both in terms of what has been happening, what has come out of the election. We don't know necessarily what it's going to look like. From where you guys sit, and as you start looking into next year, how are you approaching it, and how do you think the industry should continue to approach it? Well, that's a great question. You know, with the change in the administration, you know, there's been talk about, you know, what role does, you know, the EV mandate play going forward? You know, our discussions with all of the OEMs, you tell us that, you know, the market is still going in the same direction. You know, all the OEMs have made substantial investments in infrastructure and in new technology, you know, which they want to bring to market. Now, you know, that may change a bit with the new administration, but we expect that things will continue on their course. So, we're continuing to advise our clients to take a practical and measured approach, you know, to the shift towards alternative fuel vehicles. And it's really important to understand where these newer technologies sit within those organizations, but also to balance, you know, the EV adoption while recognizing the significant investment that's going to be required. So, what that means for us is helping our clients, you know, develop a multi-year procurement plan, which includes a roadmap to align with the OEM offerings and also market trends, and then scrutinizing operating and performance data to optimize the procurement and the viability of those alternative fuel vehicles. So, a really interesting time in the market. Gotcha. And you talked about it some there in terms of how you guys are working with your customers in all of this and make sure they're in the best setup. Are there any other challenges that maybe we haven't talked about that you're hearing from them as far as, you know, EV adoption or even into the wider transportation space, talk about things like clean diesel and things of that nature? Well, that can be a pretty long list. Fair enough. But certainly at the top of the list is the need for flexible and competitive financing options to help produce truck and finance costs. So, preparing for the car pre-buy is also top of mind for fleets. You know, they want to know how to go about acquiring alternative fuel equipment. They want to know how to balance their operational effectiveness with their financial flexibility. Also, you know, how do they manage fuel and maintenance costs, you know, while progressing towards a carbon-free future? One of the things you brought up there that I think is worth talking about, especially as we get into 2025, the flexible financing, right, we're getting this rate cut. We've already had two. There's talks of another few happening next year. How are you guys kind of going into that environment knowing that, you know, obviously you guys don't operate necessarily just based on what the Fed is saying. You guys have your own approach. But how do you approach that environment in terms of, you know, the Fed's cutting these rates, inflation is what it is, interest rates are going down. How do you approach it? Well, I would tell you, Johnnie, we view capital as a commodity, and, you know, our clients, you know, view it the same way. So, there's a lot of sources of capital. But what's most important is, you know, how they manage the asset. So, you know, we provide an ecosystem of value-added services together with, you know, innovative, you know, flexible financing solutions. So, our emphasis is always on, you know, optimizing the performance of the fleet, reducing the lifecycle cost. And, you know, we do that by using data analytics and staying, you know, highly customer-centric. So, I'm sure we'll be coming out with some new products for the upcoming year to address some of the challenges in the marketplace as well. Yeah, that sounds great. And, you know, one thing I wanted to start doing during these sessions, these podcast interviews, is giving the opportunity for industry veterans such as yourself to talk about sort of what you've learned and sort of the pieces of advice that you would share with someone just kind of getting started in the industry, whether it's as a firm level or as an entry-level person. And so, I'm curious, what advice would you share to someone who's new into the space? Well, first, I would say never stop learning, right? Professional development and continuous learning should always be a priority. You stay informed about industry trends, emerging technologies, and listen to your customers. Also, you want to align yourself with people and organizations that, you know, prioritize diversification, mentorship, and professional development. You know, Fleet Advantage would place a premium on those areas for our associates. And then, finally, you know, whatever you do, you know, get involved with the industry and one of the associations and have fun. I mean, this is a great industry with lots of opportunities to grow and build a career. Gotcha. Well, and over my few years here, I can certainly echo that last sentiment. There's always a lot going on and a lot of friendly people and people working together in this industry. So, it's always great to hear people speak on that, especially with the associations. The last thing I would want to leave with is just, is there anything else you feel like readers of Equipment Finance News or listeners of the DIG podcast should know about kind of the state of the transportation fleet financing industry as we head into 2025? Yeah, I would re-emphasize one of the comments that I made earlier, which is there are opportunities in every market. You know, my advice to others is to look for opportunities, you know, where customers and the market is underserved, and then help develop solutions to fit those customers in that segment of the market. I would also emphasize the importance of data analytics and using that to help identify opportunities and to maximize flexibility. All right. Well, I thank you so much for your insights into the state of the market and everything that's going on. I appreciate you joining me today on the Dig. It's been my pleasure. Thank you. Thank you for joining us for the DIG, where we aim to take the industry and you to better results. This podcast is a production of Equipment Finance News. Visit equipmentfinancenews.com to learn more about our lender directory and about our annual event, Equipment Finance Connect. Equipment Finance Connect is where lenders and dealers come together to network and connect around financing opportunities. We hope you will join us for next month's episode of the Dig.
Today we're joined by Fleet Advantage's Brian Holland, and I'll let him introduce himself. Hey, good afternoon, I'm Brian Holland, CEO of Fleet Advantage, delighted to be here. Delighted to have you, and I want to start off, for people who maybe aren't as familiar with you guys, who is Fleet Advantage, and what role do you guys play in the equipment industry, specifically the transportation industry? So Fleet Advantage is the largest independent lessor for heavy-duty Class A trucks in the country. We're also the leading innovator for specialty financing, fleet data analytics, fleet management services, and life cycle cost management. We serve more than 50 of America's top corporate transportation fleets, and Johnnie, while we're technically a specialty finance business, we're better described as a business intelligence or an asset management firm. We use data analytics, deep industry expertise, and flexible financing solutions to help our clients make better decisions about their fleet, to improve productivity, to reduce their environmental footprint, and save millions and sometimes tens of millions in operating costs. So our innovative life cycle management program also helps fleets to meet their ESG objectives while effectively managing their transportation assets. Right now, we're helping our clients plan for the future and deal with the rapidly changing landscape. To your point, the current state of the market has been in such a flux, the rapidly changing landscape, as you said, and some of that is also the role that you guys have just had to play has changed, and the role that lenders have had to play has changed, but with that in mind, how do you evaluate the current state of the transportation and fleet finance market? You know, despite all the economic challenges that are facing the transportation sector today, it's a fascinating time in the industry. All of the experts are predicting the largest truck pre-buy ever in 2025 and 2026, due to the EPA's 2027 NOx rule, the California Air Resource Board mandates, and the allocation, which is driving a shift to zero emissions trucks. And other states have been following suit. So, we all know that it's a cyclical market, but now more so than ever. We came out of COVID and post-COVID with a lot of equipment on allocation. Demand was high, production was limited, and there were lots of supply chain disruptions. Now, fast forward to today, it's a buyer's market, but that's going to change quickly, and then we'll be right back into a period of allocation and rising prices. So, this really emphasizes the need for flexibility and agility to be able to respond to changing market conditions, and we're advising our clients to have a long-term strategy to navigate the next few years. You talked about a few things there that sort of went to how you guys have been able to be successful in this more challenging environment. The flexibility, the talking strategy with your clients, is there anything else that really stands out to you in terms of how Fleet Advantage has been able to have a strong 2024? Well, I would tell you that there are opportunities in every market. We listen to what our clients are telling us and the challenges that they're facing, and then we look for innovative ways to help address those challenges. We introduced a number of new products during this past year. We introduced new analytical navigator tools for intelligent decision-making to help clients identify the appropriate equipment to help continue to reduce emissions, which in many cases remains focused on adopting newer clean diesel technology. We also partnered with FleetNet America and Cox Automotive to provide organizations with transportation fleets, specialty financing with reliable access to a nationwide maintenance solution, and we also introduced our EVPath program to help support companies with transportation fleets that are transitioning to EV and alternative fuel trucks. So under this program, we matched the monthly payment on the lease of an electric truck to that of a diesel truck, which represents a more digestible investment for the fleet. This could represent savings to the fleet of up to $3,000 per truck per month, in addition to offloading the bulk of the equipment's residual risk. So education is also a big part of our mission, and we've recently held a series of webinars to help fleets navigate the allocation and emissions mandates. And all of these innovations have really helped our clients, but they've also helped us to surpass, you know, $1.1 billion in syndicated lease volume over the past 12 months. Well, that's amazing. And you talked about it quite a bit there. You know, obviously there's a little financial success about it, but the education side of it and the approach to sort of EVs with the webinars and with the EVPath program, and when you think about all that and putting it together, you know, there's a lot of conversation as to what the future is going to look like as far as EVs go, both in terms of what has been happening, what has come out of the election. We don't know necessarily what it's going to look like. From where you guys sit, and as you start looking into next year, how are you approaching it, and how do you think the industry should continue to approach it? Well, that's a great question. You know, with the change in the administration, you know, there's been talk about, you know, what role does, you know, the EV mandate play going forward? You know, our discussions with all of the OEMs, you tell us that, you know, the market is still going in the same direction. You know, all the OEMs have made substantial investments in infrastructure and in new technology, you know, which they want to bring to market. Now, you know, that may change a bit with the new administration, but we expect that things will continue on their course. So, we're continuing to advise our clients to take a practical and measured approach, you know, to the shift towards alternative fuel vehicles. And it's really important to understand where these newer technologies sit within those organizations, but also to balance, you know, the EV adoption while recognizing the significant investment that's going to be required. So, what that means for us is helping our clients, you know, develop a multi-year procurement plan, which includes a roadmap to align with the OEM offerings and also market trends, and then scrutinizing operating and performance data to optimize the procurement and the viability of those alternative fuel vehicles. So, a really interesting time in the market. Gotcha. And you talked about it some there in terms of how you guys are working with your customers in all of this and make sure they're in the best setup. Are there any other challenges that maybe we haven't talked about that you're hearing from them as far as, you know, EV adoption or even into the wider transportation space, talk about things like clean diesel and things of that nature? Well, that can be a pretty long list. Fair enough. But certainly at the top of the list is the need for flexible and competitive financing options to help produce truck and finance costs. So, preparing for the car pre-buy is also top of mind for fleets. You know, they want to know how to go about acquiring alternative fuel equipment. They want to know how to balance their operational effectiveness with their financial flexibility. Also, you know, how do they manage fuel and maintenance costs, you know, while progressing towards a carbon-free future? One of the things you brought up there that I think is worth talking about, especially as we get into 2025, the flexible financing, right, we're getting this rate cut. We've already had two. There's talks of another few happening next year. How are you guys kind of going into that environment knowing that, you know, obviously you guys don't operate necessarily just based on what the Fed is saying. You guys have your own approach. But how do you approach that environment in terms of, you know, the Fed's cutting these rates, inflation is what it is, interest rates are going down. How do you approach it? Well, I would tell you, Johnnie, we view capital as a commodity, and, you know, our clients, you know, view it the same way. So, there's a lot of sources of capital. But what's most important is, you know, how they manage the asset. So, you know, we provide an ecosystem of value-added services together with, you know, innovative, you know, flexible financing solutions. So, our emphasis is always on, you know, optimizing the performance of the fleet, reducing the lifecycle cost. And, you know, we do that by using data analytics and staying, you know, highly customer-centric. So, I'm sure we'll be coming out with some new products for the upcoming year to address some of the challenges in the marketplace as well. Yeah, that sounds great. And, you know, one thing I wanted to start doing during these sessions, these podcast interviews, is giving the opportunity for industry veterans such as yourself to talk about sort of what you've learned and sort of the pieces of advice that you would share with someone just kind of getting started in the industry, whether it's as a firm level or as an entry-level person. And so, I'm curious, what advice would you share to someone who's new into the space? Well, first, I would say never stop learning, right? Professional development and continuous learning should always be a priority. You stay informed about industry trends, emerging technologies, and listen to your customers. Also, you want to align yourself with people and organizations that, you know, prioritize diversification, mentorship, and professional development. You know, Fleet Advantage would place a premium on those areas for our associates. And then, finally, you know, whatever you do, you know, get involved with the industry and one of the associations and have fun. I mean, this is a great industry with lots of opportunities to grow and build a career. Gotcha. Well, and over my few years here, I can certainly echo that last sentiment. There's always a lot going on and a lot of friendly people and people working together in this industry. So, it's always great to hear people speak on that, especially with the associations. The last thing I would want to leave with is just, is there anything else you feel like readers of Equipment Finance News or listeners of the DIG podcast should know about kind of the state of the transportation fleet financing industry as we head into 2025? Yeah, I would re-emphasize one of the comments that I made earlier, which is there are opportunities in every market. You know, my advice to others is to look for opportunities, you know, where customers and the market is underserved, and then help develop solutions to fit those customers in that segment of the market. I would also emphasize the importance of data analytics and using that to help identify opportunities and to maximize flexibility. All right. Well, I thank you so much for your insights into the state of the market and everything that's going on. I appreciate you joining me today on the Dig. It's been my pleasure. Thank you. Thank you for joining us for the DIG, where we aim to take the industry and you to better results. This podcast is a production of Equipment Finance News. Visit equipmentfinancenews.com to learn more about our lender directory and about our annual event, Equipment Finance Connect. Equipment Finance Connect is where lenders and dealers come together to network and connect around financing opportunities. We hope you will join us for next month's episode of the Dig.
