Why Aren’t More Retailers With Transportation Fleets Adopting a Multiyear Procurement Plan?

In 2025, change and uncertainty have defined everything from the broader economy and operational costs to the political and regulatory environments. For retailers that manage heavy duty truck transportation fleets, nowhere has this been more prevalent than the relaxing of the California Air Resources Board (CARB) mandate, specifically the “Advanced Clean Fleet” regulation, which would have required these retailers to gradually add zero-emission vehicles to their fleets.

Even before the change to the CARB regulations, many retailers were operating without a multiyear approach to their procurement plan.

In a recent survey of 3,000 transportation fleet executives, 71 percent said they’re operating trucks more than five years currently. When asked how many trucks in their fleet are model year 2019 or older, more than half (62 percent) said as many as 50 trucks in their fleet fall into this “higher aged” category.

Even though the majority say they're running a five-year-or-more life cycle, 68 percent also admit they feel it's necessary to replace as much as 50 percent of their fleet over the next two years to three years, which means they're now looking to shorten their life cycle. When asked what percent of their fleet they're actually planning to replace, approximately three-fourths of respondents said they plan to replace as much as half of their fleet over the next two years to three years.

While 36 percent said they had a pre-buy procurement plan in place due to the mandates, 64 percent said they either do not have a plan or are unsure if their organization has a plan. Even with CARB now relaxed, this is an alarming revelation that illustrates many retail fleets are unprepared and could face dire financial consequences in the coming years — regardless of the environmental or legislative environment shaping the industry.

Prior to the dismantling of CARB, there was a lot of talk and concern of what the rush to procurement would do for equipment costs. These concerns are growing even now over the possibility of tariffs. According to the American Trucking Association, a 25 percent tariff levied on Mexico could see the price of a new tractor increase by as much as $35,000. That is cost prohibitive for many small carriers, and for larger retail fleets it would add tens of millions of dollars in annual operating costs. Clearly, the possibility of these types of costs is more evidence of the need for a strategic procurement plan.

Why is a Multiyear Procurement Plan Necessary? Why 5 Years?

A strategic five-year procurement plan serves as an important road map for retail procurement decision-makers, guiding everything from equipment acquisition, maintenance, and replacement and lease surrender/remarketing. It allows retailers to anticipate and prepare for future needs, technological advancements, and additional regulatory changes. By taking a long-term view, these companies can optimize their fleet makeup, reduce operational costs, and enhance overall performance.

One of the primary benefits of a strategic five-year procurement plan is its ability to align fleet operations with broader financial and organizational goals. “Supply chain leaders will need to remain agile to adapt to fluctuating prices and changing demand,” said Jenna Slagle, senior data analyst at Project44, immediately prior to the tariffs starting.

This alignment ensures that every vehicle acquisition supports the retailer’s mission, whether it's improving sustainability, enhancing customer service, or maximizing profitability — all of which directly affect retailers’ ability to deliver fast and efficient customer experiences.

Comprehensive Financial Planning

Financial planning is also an important component of any long-term procurement strategy. By forecasting fleet needs over a five-year period, retailers can better manage their capital expenditures and avoid unexpected financial burdens. This approach allows for more accurate budgeting and can help secure favorable financing terms. Moreover, a comprehensive total cost of ownership (TCO) analysis for each vehicle type enables retailers to make informed decisions that balance upfront costs with long-term operational expenses.

Even more so, a five-year plan allows retailers the ability to make adjustments as they go, fully understanding that mandates, regulations, customer portfolios, and financial goals shift and pivot over the years. Having a plan in place allows these companies to make modifications — both big and small — paving the way toward increased business agility.

This type of long-range planning also allows finance professionals to align with their fleet operations teams and review their procurement strategy and finance options more frequently. Following are key financial metrics that should be taken into consideration:

• Lease vs. buy
• Sales tax analysis
• Lease type analysis (FSL vs. UBL, TRAC, FMV, etc.)
• Comparative cost analysis to determine the optimal time to upgrade equipment
• Diesel vs. EV comparative cost analysis
• Per unit P&L
• OEM equipment cost tracking
• SWAP rates
• Residual values

The process of building a five-year plan begins with working with an asset management partner to conduct a thorough assessment of the current performance of the fleet, including a complete fleet list with vehicle in-service and out of service-dates identifying areas for improvement and setting clear objectives such as reducing costs, improving fuel efficiency, improving safety and CSR scores, or enhancing vehicle uptime. Conducting a thorough analysis and a holistic modernization plan is important to determine the optimal number and type of vehicles required in the coming years. This analysis helps retailers align their procurement strategy with business goals and operational demands.

Developing a strategic timeline is also essential for a successful procurement plan. Retailers should work with their asset management partner to create a five-year timeline with key milestones and deadlines. It's important to continuously monitor upcoming and any additional regulatory changes to EPA regulations, which may lead to additional cost increases for new trucks. Planning for a potential “rush” on certain types of high-demand units can help retailers avoid higher costs associated with certain model year trucks. This proactive approach ensures that retailers are well-prepared for future challenges and can manage their budgets more effectively.

Financial assessments are another important component of the procurement process. Conducting a TCO analysis leveraging in-service dates and utilization data for each vehicle helps retailers understand the full financial implications of their procurement decisions. This includes factors such as purchase price, fuel costs, maintenance, and depreciation.

The right asset management partner can also help establish strong relationships with reliable suppliers as well as OEMs to negotiate long-term contracts. A thorough lease vs. purchase study can help retailers determine the right type of financing for their equipment, as well as a thorough analysis of various lease types such as full-service or unbundled leases.

Finally, retailers should prepare a clear presentation of the procurement plan for stakeholders, outlining the benefits for each internal stakeholder group. Establishing a change approval process for modifications to the five-year procurement plan ensures that any adjustments are well-considered and aligned with overall business objectives.

Retailers would also be wise to work with their asset management partner to regularly review and update the five-year procurement plan based on market conditions and fleet performance. This approach allows retailers to adapt to changing business needs and economic conditions, ensuring the long-term success of their operations.

As the retail industry continues to be defined by rapid e-commerce growth, customer delivery expectations, and ongoing disruption, companies that want to remain competitive should adopt a five-year procurement plan. Doing so will help them be well-positioned as the leaders of tomorrow.

Brian Antonellis, CTP, is the senior vice president of fleet operations at Fleet Advantage, a leading innovator in truck fleet business analytics, equipment financing and life cycle cost management.