Brendan P. Keegan – Merchants Fleet

David Hunt 0:03
Hello, I’m David Hunt CEO and founder of the Hyperion FinTech group and your host of the leading FinTech podcast. Now, I hope you’ve all enjoyed the summer vacation and that you had some time to relax. As you would have noticed, I took some time away from the podcast in July and August. Not all vacation, I assure you. But I do have some great guests lined up all the way up to Christmas, and I hope you continue to support, share and enjoy the podcast. Particularly as I’m delighted to share that this is our 100th episode. Crazy. I know from these podcasts at the intersection of clean technology and business. But listen, notes.com says that we’re in the top 1.5% of podcasts globally. So thank you to those who subscribe, share and listen. Now on this podcast, we love sharing the stories and founding journeys of pure play clean tech companies and will continue to do so. But increasingly what inspires me most are existing companies in traditional sectors who are being bold and taking big bets and risks to commit to their own transition to clean mobility and energy. This week, I’m delighted to be joined by Brendan Keegan, CEO of merchants fleet, a company fully committed to the electrification of fleet transport and a leader in diversity and its teams and employees and with a genuine commitment to their sustainability. We need to be helping and encouraging large companies to take the transition seriously no greenwash, and we should celebrate the pioneers doing so which we’ll do now. Hope you enjoy the episode. Hello, Brandon, welcome to the leaves and cleans podcast.

Brendan P. Keegan – Merchants Fleet 1:47
All right. Thanks for having me today. David, looking forward to our conversation today.

David Hunt 1:51
Yeah, there’s so much to go through which is, which is a great thing. So in particular, I think for our audience, most of our guests they’ll know, tend to be sort of founders and CEOs of clean tech companies. But what I’m really, really keen to explore with you and generally now is how leaders within large organisations and established industries deal with the disruption that’s going on, particularly around mobility, and that element of disruption and rapid change, which is, you know, you’re going through both externally and internally. So be really good to get your thoughts on that. But before we do that, it’s always good to get a little bit of context. So perhaps you can share a little bit of what brought you to because you’ve got a very sort of diverse history of leading organisations, in businesses in various sort of Business Services fields, but now you were the logistics and transportation company for last, I think, five or six years. So what what led you to join merchants fleet in the first place?

Brendan P. Keegan – Merchants Fleet 2:43
So so my journey to merchants fleet is actually quite an interesting one. And I think it’s unique in that, you know, I go back to 2009, I was running a technology company, and we happen to have a very large fleet ourselves. It was right after, you know, we kind of got hit with the little bit of a recession. So we did a very large sale leaseback with merchants fleet. So I go back, you know, 13 years ago, and I was merchants largest client. So I got to know the company over a number of years, you know, my background, not being fleet or auto, my background being technology, financial services. And then, you know, after being a client for a number of years, I joined the board, and I joined the board to really help them more readily move into the technology space, as vehicles were having more data on board, as you were looking at technology transformation, they were looking for somebody with more of a technology background. And then what I would tell you is, you know, at some point in time, when you make a lot of suggestions during board meetings that make sense, eventually they’re going to turn the tables, they’re going to say, why don’t you run the place them. So that’s, that’s what happened after being on the board for a couple of years and didn’t didn’t come from the automotive space didn’t come from the fleet space. It is the fifth company I’ve had a chance to run and be CEO of so I felt comfortable in that realm. We’ve really pushed this, our company merchants more from being a fleet company into being a fleet technology company, which has really differentiated us over the past couple of years.

David Hunt 4:10
Yeah, no, that’s an interesting question, because I can get that data was starting to play apart maybe a number of years ago in terms of the whole logistics and transportation space into running and making them more efficient, the processes but emobility specifically is obviously much more recent, when you joined full time into the organisation those five, six years ago. How much was it on the radar that there was there was a transition not just in sort of data of logistics, but actually in niche vehicles? And the sort of infrastructure that was involved was was immobility on the horizon for you guys at that time? And at what point if not, what at what point did that start to sort of rear its head?

Brendan P. Keegan – Merchants Fleet 4:49
Well, you know, I’ll tell a few stories and don’t mean to embarrass anybody but you know, when I was bringing up the terms mobility, even to merchants as board member, you know, I started getting questions like Brenda, Utah Talking about ADA. And Mike No, no, I’m talking about, you know, just, you know, us looking at transportation as more of a mobile application than a traditional long term lease. So I think that the company was was probably a little bit behind on some of the trends. Now, some of that was it was as a family owned business up until recently, and as a family owned business, you know, they were looking for moderate growth every year. And if they got the growth, then they really weren’t looking to, you know, go off in and, you know, kind of slay dragons, if you will. But when you started to put a thesis together, and you started to look at, you know, is the auto and fleet industry ripe for disruption, you quickly came out with a thesis that it was, you know, certain markets are opportunistic, for disruption, some aren’t, this was generally a little bit of a sleepy industry, there were about eight, maybe nine companies that could really manage fleet across, you know, a global footprint or national footprint. In generally speaking, the industry was happy with two to 5% growth. So you really had an industry that was ripe for a company to kind of stand up and say, where we are willing, and we have a vision to be a disrupter. Now, that’s the internal side, when you look at the external side of going from ice vehicles to electrification, the industry is very ripe for disruption. And we’re seeing that with with new manufacturers, you know, new OEMs coming into play, you know, in giving, you know, they’ll be giving Ford, the Ford General Motors over the next couple of years, you know, run for their money.

David Hunt 6:37
Ya know, it’s interesting, I actually saw a graphic this morning, I can’t recall, who posted it around. The the number of, you know, electric semi trucks come into the market within the next two years, we all know of the Tesla semi, of course, but a number of other OEMs are bringing their product to market as well in the in the next two or three years.

Brendan P. Keegan – Merchants Fleet 6:55
Yeah, well, you know, if you go back, say 1015 years ago, there really weren’t new OEMs coming into space that you had Tesla. You know, maybe you had DeLorean, geez, there’s a name, you know, before that, but you know, now you’ve got a whole host, you’ve got xls, you’ve got ready, and you got Lordstown, I mean, you have a whole new host of OEMs coming into play, and they’re all coming, you know, you can argue do, are they coming disadvantage or advantage. They’re coming strictly as electric vehicle companies without any of the, you know, ice history. So you can say is that the, in some ways, that’s an advantage where they don’t have any legacy to overcome. Now, the flip side is take takes intense capital to be able to do that. But I think it’s going to be fascinating to watch the OEM depth chart over the next 10 years, and kind of see how the industry shakes out and how it shifts.

David Hunt 7:48
Yeah, definitely, I’ve got a few bits myself on who might be the Kodak or two in there. But we’ll we’ll maybe share that later. If we get around to it. To give us some context for the audience, because I’m really keen to dig into the a the disruption that you’re going through both in terms of markets and internally leading a company through that kind of transition. And then to sort of talk about electrification of fleet more generally, in terms of what’s going on, how are we addressing this? And what can be achieved, but I think it’s useful to get some context. So again, can you just share with a little bit how this family business in logistics has evolved? And essentially, what services and products and solutions you actually provide to the market right now?

Brendan P. Keegan – Merchants Fleet 8:26
Sure. So maybe, let me maybe start by defining fleet in the most simplistic way. So if you’re listening to this podcast, and you’re driving down the road, one out of five cars that you see on the road as a fleet vehicle, so when you think of fleets, the natural ones that come to mind are, let’s say, the US Postal Service, or UPS or FedEx or Amazon, why, because you know, they’re just so prevalent, you know, then you could look at, you know, you know, companies that show up in, you know, kill bugs in your house like Terminix. And then you could, you know, as you’re pulling into your neighbourhood, you might see a landscaping truck there, that’s a fleet vehicle, you might see a small local painting company, you know, Joe’s painting and sons. That’s a fleet vehicle. So what, let’s just start with one out of five vehicles in North America is a fleet vehicle. So we’ll start there. And then once you go down that path, you start to say, Okay, what do we do? Well, we manage approximately 170,000 fleet vehicles, generally not for the Joe’s painting of the world, but for, you know, bulk companies, you know, I mentioned Terminix, the, the the large, last mile delivery companies, we manage 170,000 of those vehicles. And what’s key to managing those is technology. So, you know, we have a technology platform where if you have you know, 5000 vehicles and they’re all over all over the US, they’re in Canada, we have every ounce of it, we have every imaginable piece of information about those vehicles where they are who’s driving, are they are they the other toll violations? Do they need driver roadside assistance on What’s the mileage? What’s the maintenance, we know everything about that we know when it should be cycled. And what we do for our clients is you save a tremendous amount of money on a monthly annual basis on their fleets, but also increase the safety of their drivers. So, you know, there’s there’s in the US, there’s, there’s nine companies that really do this to scale. And currently, were the fourth largest in the US. Okay, so that is a little bit about, you know, just maybe framing what what fleet is for your, for your audience to think of as they’re driving down the road?

David Hunt 10:35
Yeah. Yes, just say it’s quite a diverse, one of the things that again, you’re picking on or talked about number of industries there, you know, large scale logistics last mile deliveries, that is a huge topic. That’s, that’s come to the fore, particularly, you know, last couple of years with COVID and lock downs and the sort of prevalence of increase even of these sort of delivery services on the last mile, in terms of the transition towards electrification, be interesting to hear from you how much of that was push and pull in terms of how much were you approaching? You know, these big logistics companies? Are your clients saying that this is the direction of travel? And how much are they knocking on your door saying, Hi, we need to explore this? Or is this a thing? Or is this even possible?

Brendan P. Keegan – Merchants Fleet 11:16
At this point in time, so you know, sitting here and in mental 822, it’s, it’s more of a push. So what we see is, is a lot of companies coming from the boardroom down, and they’re talking about their ESG strategy, they’re talking about sustainability, they’re talking about corporate citizenship and social responsibility. But that doesn’t always work its way to the fleet manager. Now, we you also have to recognise that when we approach that fleet manager, you know, it’s very daunting for them, you know, right now, if you’re a fleet manager, and let’s just pick you running pickups, and you got Chevy Silverado, and you got ford f 150s. You know, your job for the last five, six years has been very similar, you know, a certain number every year, I give my drivers fuel cards, and I’ve got my maintenance network, all of a sudden you throw in electrification, and now you’ve got questions of, well, where are we going to charge him? What’s the range? My drivers have range anxiety? Am I going to use the same vehicle in Manhattan that I’m going to use in Wyoming where the driving application is completely different? Some of my drivers take them home? How are they going to charge them at home? How are they going to charge us back? How do we split the electric bill between their house their pool and their vehicle? And then we have depot centres? Well do I have is there enough energy grid to bring to my to my depot centre, if I’ve got 30 chargers there. So all of a sudden, the level of complexity for the fleet manager goes up exponentially. And it’s no longer 80% about the vehicle. It’s 80%, about the infrastructure 20% about the vehicle. And what I’ll tell you is with the infrastructure, we are in the early early stages, very, very early stages, you know, across the US and I know what we do as a company, we take as much of our lessons and our learnings as we can from Europe, also from China and parts of Asia Pacific that are literally years ahead of where we are here in the US and how have they done it? What applications? And what learnings can we take from from other countries and other companies that have already been on the journey a little bit further along than the US?

David Hunt 13:29
Yeah, there’s none of evangelization there. And I get what he’s saying. And again, from experience, a number of people who’ve already moved traditional automotive industries, either well embedded to combustion engines, because it’s what they know. And they’ve always known. And also in business or you know, nobody wants to make their life harder, it or their job harder. And to some extent, like you said, you bring in a lot of complexity, which we all know is more daunting than it needs sometimes needs be in, which is clearly what you’re doing is that education piece. And are you find that once you get conversations with these fleet managers within your client businesses that they can see that this is achievable, or do you still have a lot of pushback, and ultimately, it’s the board driving the decision rather than those who have to actually manage the process.

Brendan P. Keegan – Merchants Fleet 14:12
So so we have a we have a five step process we walk our clients and prospects through and one of the first things we try to do is align, you know, their ESG strategy, their Evie strategy with the technology adoption lifecycle, and we say, Do you want to be an early adopter? Do you want to be an innovator? Do you want to be the early majority, the late majority a laggard? So kind of using Geoffrey Moore’s technology lifecycle? So the first thing we do is we say, where do you want to? Where do you want to play on that? So you’ve got some companies that say, Hey, where we are very socially conscious company, where in the consumer business, our consumers are going to demand this. We want to be an early adopter. So then we’ll say okay, well, you have 1000 fleet unit fleet, then we want 20% A year for the next five years and then five years do you want to be 100% alive? Patrick, then we go to another company and they say, you know, you know where, where in rural Kentucky, it’s not as important. We’re not a consumer company. ESG is important to us, but it’s not vital, we’ll say, Well, you probably won’t, you’re probably more of a late majority company. So you probably want to go 5% 10% 15% 20% 25 Over the next five years. So the first thing we try to do before we even, you know, give any type of plan is understand where do they want to be positioned from a technology strategy from an ESG strategy from an Eevee strategy? And then back into what is your fleet plan for the next five years? Now, now, what are one of our challenges right now, believe it or not, is when we get those early adopters is bringing these EVs to commercial EVs. So think cargo vans think light duty medium duty pickups, the I think box trucks may be stepped bands. So kind of in that transportation and logistics space, right now, the demand far outstrips the supply. Because this is a new technology, this isn’t, you know, taking a f150 or Chevy Silverado and just pulling the engine out and putting a battery and it’s, it’s a completely different build. So, you know, we’re a little behind on on on the timelines, but also, we still are fighting the supply chain, even in ice vehicles. So you know, the chat, the timing right now is a bit challenging.

David Hunt 16:30
It is there are many convergent things there, obviously, around the sort of manufacturer supplier battery supply chain, all of these things and like over overlaying on that the chip stuff which affects any kind of vehicle. So there is a supply squeeze. And that certainly holding back in Europe also is is the demand, certainly for electric vehicles that outweigh supply. We’ll return to that in a second, actually. But what I’m also keen to explore Brendon is resistance and disruption internally. So how large an organisation in terms of numbers are you? And how have you, as a co leader, brought this message to your team? And what kind of challenges and resistance have you faced internally, as you go through this disruptive journey internally?

Brendan P. Keegan – Merchants Fleet 17:08
Yeah, so you know, where we are about two and a half billion in assets. And you know, we’re 60 year old company, we’re celebrating our 60th anniversary this year. Now, over the last four and a half, five years, the company’s gone from being a $500 million company to two and a half billion. So we’ve seen just tremendous growth over the last five years, employee wise for about 650 employees. You know, if I go back to 2018, and I really give an honest assessment, we reorganised the company. And this was kind of one of the benefits of me being a former client and being on the board is I did have a vision for as a client, you know, I don’t want to understand your business. I don’t want to go to different divisions, I want to be served through kind of one person. So when we reorganised you know when I tell you is it was a traditional reorganisation, you had 20% of people on board excited before you even told them what you were going to do, because that’s just their personality. Then you had another 20% that even if they you know, white Raider, they were just going to sit back and just kind of wait, and they were your your downers. And by the way, I would say this, if you brought in free pizza for lunch, you’d have 20% of people that would thank you. And if 20% of people would say, why didn’t you bring in salads or something else here. So, so this, this, this is no different. And then you had, you know, the middle, the majority, kind of saying, let’s see how this plays out. And so that first year, was the most challenging, where we did reorganise the company. We put all the business units into one business unit, we renamed we had five different businesses, we renamed everything merchants fleet. And it was it was a tough year. But I think one of the things that if you are, if you do want to disrupt an industry, and it starts with creating a business transformation internally, you’ve got to ask yourself three questions. Are you ready? Are you willing? And are you able? So are you ready? Is is your industry ready? Is your company ready? The second thing is, are you willing, because you’re gonna have to do things that you don’t necessarily want to do, you’re gonna say, a skill set we have in a given department isn’t going to be the skill set in that same department we need in a year. So for instance, we have way more people that are data analysts today than we had four years ago, because we’ve invested approximately $50 million a year into technology. And then the third thing you’ve got to ask yourself is, are you able, now are you able, what I find comes down mostly not to, you know, intelligence experience or knowledge, it really comes into attitude, and well, it just is somebody’s able to make the move. And, and, you know, in any transformation of anything, you know, whether it’s, you know, you know, a company or sports team, you’ve usually got 10 20% of people that just aren’t able to get there. They aren’t able to get there emotionally, they aren’t able to get there mentally. And there’s a term we use in the company for that saying fixedness that, you know, their mental model is have been doing it this way for 10 years, and this is how I’m going to do it or that’s not how we do it. Hear, and you’ve really got to have the fortitude to not tolerate that. Now, I’m not saying that from like a tough guy standpoint, I’m saying, you just have to say, hey, we know that’s how we’ve done it the last 10 years, but we’re going to take a look at maybe there’s a better way to do it now, maybe there’s a different way to do it now. And some people just don’t make that transition. And some of that is just their fixedness. So excuse me. So the first year by far in any business transformation, any disruption is the hardest year. And I will tell you, there’s different nights, you driving home, and you’re reflecting on the day, and you’re just kind of saying, Did I win today? Or did I not win today? Because because you’re trying to do things differently. Now, as you start to get more people on board, you go from 20%, on board to 30, to 40, to 50. And you start to have successes, like in a team, we after the last mile market, we thought that was going to be a boom, you know, and in 2018, we were super excited when we put 289 units on the road and last mile. And David, if you saw us in the hallway, we’re high five, and we thought, you know, we just were killing it, well, I’m going to tell you that this holiday season will have 27,000 units on the road. And that’s 2019 to 2022. So that’s, that’s not you know, a big difference. But it really took people believing that that was a market, and then it took people willing to do things that they weren’t comfortable doing. And I think when you’re able to do that things are things are really possible. But you know, in that disruption, you’ve really got to make sure one of the most important things after you have the vision for it is do you have a culture that’s going to embrace the transformation, right. And I would say I spent as much time on our culture as our as our CEO, as I did our strategy or our financials. And I’m convinced now with the culture that we’ve built the innovation system that we’ve built the nimbleness that we’ve built. And I’ll be facetious here, if tomorrow, we decided we wanted to sell office furniture, I swear to God in the year, we’d be pretty damn good at selling office furniture. Now, if anyone from merchants is listening, we are not going furniture business. But I think when you build a culture where people are really willing to try new things, and they’re willing willing to be innovative, and they’re, they’re willing to get outside their comfort zone, you you truly open up the opportunities for your company.

David Hunt 22:27
Yeah, absolutely. That that coach thing, I think is critical in any business at all times. But in transition, particularly so and it always reminds me of some of the experiences I’ve had in the past. You know, we used to reference people on the bus if you’ve got the right people on the bus. And sometimes you have to allow some very nice talented people to get off the bus because for them, it’s no longer the bus that they could or should be on. And that sometimes can be a challenge to handle culturally, when you’re you’re going through these transitions. And I wouldn’t ask you to particularly sort of dwell on that. But yeah, it’s around having that, that that ability to be agile when you’re going through a disruption. If your markets are agile externally. You’ve got to be agile internally, too.

Brendan P. Keegan – Merchants Fleet 23:06
Yeah. So you know, I just want to come back to Buster, because I got an interesting anecdote there. So no, it’s definitely true, you’ve got it, you’ve got to gently tell some people that, you know, their bus passes revoked. And that’s, and that’s fine. But what I also find when you go through a transformation, there were certain people that were the most popular kids on the bus, that as the company goes through the transformation, and you build new businesses, you know, all of a sudden, you know, it’s like, you just got a new kid into the school, and somebody else is more popular. And I found it fascinating. One time, just about two years ago, in the middle of the transformation, when one senior leader gave to another senior leader when they were going on vacation. I don’t know if you’re familiar with the book called The Energy bus by John Gordon. And what it talks about is, you know, you’ve got to just not sit on the bus, but you’ve got to bring the right energy. And I thought it fascinating because it was one employee saying to another, hey, you used to be one of the stars of the company, you’re still incredibly important. But don’t bring negative energy onto the bus, because your department isn’t the shining star anymore, and we’ve got more shining stars, but sit back and say you’re on the journey, you’re on the bus, and you’re a part of it and be happy with it. And I can tell you that that person really turned around. And by that they were doing a great job, but you could just see that, again, they went from being you know, quote, unquote, the popular kid to the average kid and, and but what it was, it was like, be happy for the company being successful. Don’t focus on the role your team plays, because, you know, as the company has expanded, you know, a lot of people that used to have 50% of the company’s revenue now have 20% of the company’s revenue. It doesn’t make you any less relevant. But if you don’t bring the positive energy, you know, onto the bus each day, it is going to decorate so maybe you want to aside there but with the bus analogy, I just have to I had to grab John Gordon’s book there and and talk a little bit about the energy boss.

David Hunt 25:04
Yeah, no, actually, that is critical. But actually, in the podcast page, we’ll put a reference to the books and people can hook up and have to take a look at that. It’s a it’s a good one, as you say, I think as you said, it’s getting to this is a team sport. And yeah, you might be the sort of the star quarterback one year and I’m not big on football. So probably get the analogy slightly wrong. But no, you can’t always be the star of the team, whatever role or position you’re in, and that that evolves as, as, as the team sort of grows and matures, I guess. And, and certainly, that happens within business coaches, there’s that there’s a lot to talk about a fleet. And I’m really keen to get back to electrification side of things. But just one thing that I pick up that often we talk about on the podcast, because it’s such a big challenge, and a difficulty around building teams and cultures and successful businesses these days is around diversity and inclusion. And and particularly in, you know, tech industries, and clean tech industries, which are, the automotive industry is particularly sort of male dominated. And again, I know that you’ve made some good headway from what I’ve read and seen from in that space, again, is that something which you’ve had to work harder to work on to make sure that that sort of the culture is right, but equally, it’s also an inclusive and a diverse culture?

Brendan P. Keegan – Merchants Fleet 26:13
Yeah, so it’s interesting, I am not sure, you know, if I give credit to, you know, my mom or dad, or maybe even my sister on this, but you know, I’ve always in all my roles I’ve been in, I’ve always really been probably, in diversity and inclusion and equality, you know, most focused on maybe gender equality. And if you hit this, you know, I grew up in the technology industry, which tend to be, you know, more male than female, you come over to the auto and fleet industry, and it even swings more male than the tech industry. And, you know, when when I got here, you know, we had a 10 person leadership team, very capable people, but, but no females, and we didn’t have any female VPs in the company. And currently, we I have 10 direct reports, and I have five male and five female. So, you know, that fits into our larger ESG strategy. You know, three have come up internally, through the ranks to have come in externally. So on on, you know, inclusion, I think we do a very good job on equity, we do a very good job, you know, on diversity, that that’s one, we’re still we’re still fighting, I would say we’ve got not a long road, but a sustained road. To go on that one. I will tell you, COVID has actually helped us in that, that we hire more remote workers now. But you know, we’ve also done, you know, a number of other things we are right now in our fleet business, we’re actually 51% female and 49% male, which I, which I personally find fascinating for the industry that we’re in. And I think part of that, and I say I think because you don’t alter, you don’t know, I think having five women on the leadership team has wound up becoming more of a magnet for other women to see somebody, oh, hey, if I want to be in this industry, at merchants, I have the chance to go all the way up the chain. And I think that’s made a big, big difference. And I say that because, you know, when when you know, we hire women, I don’t I don’t get him to come into my office say, Hey, Brian, and I joined because, you know, you support women, right? I will tell you every conference on that I get stopped minimum three, four or five times by just random people saying, Hey, Brian, you know, I just wanted to thank you for for all the visibility you’re giving to women in the fleet industry. And and so I do think it’s consciously out there. I also hear from clients and prospects, you know, because when we’re sitting across from a procurement team on a very large bid, well, that procurement team is diverse, that they’re looking for inclusion. And and when they and finally, you just can’t send a diversity and inclusion team there and think you’re gonna win. I mean, these these companies, you know, they go on LinkedIn, they look at your website, they they know, your makeup. So it is something that I would say, I would give us above average marks on but you know, it’s sort of like running a marathon. So you know, we’re my late and we got a good pace, but we still got a long way to go. And, you know, we’re only as good as our last mile.

David Hunt 29:07
Yeah, yeah. Yeah, no, well, congratulations out. And it’s very visible. And it’s a great thing. And I think absolutely is the case that that people will see that. And it’s you know, knowing from our own point of view in terms of building leadership teams and recruiting, people do look and it doesn’t it isn’t attraction is a magnet for people from diverse backgrounds, when they see that other people from those backgrounds have been successful, so to speak to that. But let’s get back on solidification because this is a piece we touched on already that so much of the we’ve reached a tipping point in so many ways with electrification of transport with more and more certainly passenger or car EVs on the roads these days, both in the US and moreso in Europe, but there are so many challenges with infrastructure, we’ve touched on power supply and sort of the ability to charge vehicles and supply side is challenging, and so the demand is increasing way beyond the pace that even were able to electrify or create infrastructure, it seems despite the millions and billions that have been invested to do so with Electrify America and all the all these other sorts of schemes which are going on. Interesting to see, from a US perspective, what you see are the biggest challenges holding back your clients from making these decisions and to electrify, and and perhaps overlay on that, obviously, with the recent sort of inflation Reduction Act, from Biden, see how that, is that going to make an impact? Is that going to help companies tip this balance? What’s the sort of lay of the land at the moment? Brandon?

Brendan P. Keegan – Merchants Fleet 30:33
Yeah, so I think that it’s so if you’re, let’s say, if you’re, you’re a fleet manager, or you’re an operations manager, a US based company, you know, three challenges that that I think we have in the US, is I’ll start with our geography. So if you look at many of the countries in Europe that have been successful, they’re there, they’re much denser, they don’t have as many rural areas. So when you, you know, take a look at the US and you have a national fleet. You know, it’s a very different solution. When you get out to North Dakota, South Dakota, Wyoming, Montana than it is, you know, Philly, Boston, New York, you know, Hartford, Connecticut, like what say, when you get up the East Coast, very, very true. When you get into the LA San Diego area, all of a sudden, you get out to, you know, parts in Utah. So, our geography innately makes it more challenging in the US than others. So all of a sudden, you say, Hey, I just I can’t order, you know, 300 D transits that have 125 mile range in Wyoming and North Dakota, they may have to go 200 miles. So I might need a Ford E Transit in New York and Philly, but I might need a break Droppy v 600. Out in Wyoming. So the first thing is, our country’s just geography plays. One challenge. The next is and I’m going to hit on the government theme. When you look at Europe, regulatory legislation and incentives have played a big catalyst to electrification. And you go to certain countries, and I’ll take Norway, where they have the incentive, you know, hey, do this and we’ll pay you more, they have a disincentive, where if you’re looking for in certain cities, for parking for a nice vehicle, you will have to wait longer to get a resident parking spot versus if it’s an Eevee. Yeah, so you know, there’s incentives and disincentives in the US, we have been very late to the game on incentives very, very late to the game. And then the third aspect of it is, is the infrastructure. And here’s now you start to get into a debate of public versus private. And the answer isn’t public versus private, the answer isn’t versus it’s an ampersand the answer to public and private, you know, when you look at transformation, it’s when you know, public and private work together with public plays, we’re all private plays a role. And then, you know, oftentimes public can play the role in not just necessarily providing the funding, but providing the incentives, the tax breaks, the various things that make it possible for private to make those investments. So, you know, are we are, you know, with the with, with the recent government actions, are we coming along? Yes. But it’s, it’s sort of like, I’ll use a sports analogy, it’s sort of like showing up in the third quarter and saying, Okay, we’re going to start playing the game now. Doesn’t mean you can’t win doesn’t mean you can’t be successful doesn’t mean you aren’t going to have a great third quarter or fourth quarter. It just means Hey, where do you spend the last, you know, 234 or five years? So, you know, we’ve got some catching up to do. You know, with that, you know, one one great thing you know, about the US is, you know, when we are decide to do something and we decide, you know, whether it was 1969 to put a person on the moon or we decide to put it in electrification infrastructure, you know, if we, as a country make that decision, as the European countries have, as some of the Asian countries have, you know, we will get there but we are definitely starting behind.

David Hunt 34:10
Yeah, I think one of the struggles actually is around them knowing a lot of our clients in the sort of battery storage and sort of renewables business is understanding the weakness of the US energy infrastructure and particularly the electrical systems and obviously split into those sort of three different with no carbon and various other sort of that that that and you touched on this already getting electricity to depots of a high power when you’re looking at sort of fast chargers even mega chargers is a challenge anywhere and everywhere certainly is in Europe but I guess you again the the energy and electric ye electricity infrastructure in the US, again, sort of the codependent it’s very difficult to electrify if you can’t put the infrastructure in and vice versa. So do you see progress being made and an understanding of that potential barrier, both politically and from from a client perspective,

Brendan P. Keegan – Merchants Fleet 35:01
yeah, so So I see progress, but what I’d say is not fast enough. Next Monday and Tuesday, I’ll actually be in Washington DC, in our trade association, and this is going to be the number one topic, the number two topic. And the number three topic is, you know, how do we as a, as a lobbying group, as an association group, you know, representing fleets from across, you know, all across North America, but in particular, in the US, how do we really push some of this agenda, and, and what I’ll tell you is, people are listening more than they ever have. So that’s outstanding. But we aren’t, we’re still a little slow, a little slow to move. Now, when you talk about our energy, let’s just talk about our energy grid as a country. I’m not sure a lot of people because it’s not something that, you know, is exciting to listen to, it’s not something exciting to read, I don’t think a lot of people realise how fragile and that would be the word I would use. Our infrastructure is in the US. And now, finally, I could talk about our water infrastructure, I could talk about our sewer infrastructure, I could talk about our highway infrastructure, I could talk about our electric infrastructure. But you know, as a country, our infrastructure, you know, I would say is, is is not where it needs to be, as we want to, as a country go through, you know, a technology transformation and move into electrification.

David Hunt 36:25
That’s a, again, is that a challenge? Because of the sort of less federal more state orientated play, I’ve read a number of books, I’m sad that way around this sort of the the growth of the electric from from Edison upwards in the US and how it’s kind of all been piecemeal put together, and it’s similar in Europe in many ways. But does this need? And are we seeing more of a federal play to try and solve these problems? Because they are kind of national, clearly, and not sort of purely? State level?

Brendan P. Keegan – Merchants Fleet 36:55
Yeah, so we will see the government play a bigger role, I think, how much bigger is just to be determined, you know, generally speaking, in the US, we’ve really pushed it more to privatisation than we have have public. Now, the other thing that plays a factor in it, and I play a factor in this, personally, is we’re consumers, you know, when when, when you look at, you know how much electricity my home uses, versus, or first of all, the size of my home the size of the average American home to the average Europeans home, the average electric consumption of a US city dweller versus, you know, an Asian city dweller. So you know, when, when your consumers and and that’s, that’s a good and bad thing, you know, about the US, you know, consumers keep the economy going, which is outstanding, but it also consumes it consumes a lot. So, you know, this is the, you know, this is the American dream of, you know, each generation does better than the previous generation, each generations house is a little bit bigger than the previous generations. And ultimately, each generation consumes more than the previous generation, I don’t think our infrastructure has kept up with our consumption appetite. That’s one that’s one part of the equation, in, in my opinion, I don’t see that changing tremendously, you know, I could just look at, you know, the internet usage in my house this year, 10 years ago, and 20 years ago, you know, 20 years ago, you know, it was very little 10 years ago, you know, we had a couple of devices. Now, you know, everyone in my house has, has has, you know, a phone has an iPad has a laptop, and on top of that all our TVs are streaming now. So I just look and say, jeez, how much internet how much electricity is in my consuming just on those devices versus what I was using 10 years ago. Now, I’ve got two EVs in my garage. So you know, I’m sitting here going, gee, you know, what, what’s the what’s the electric equation here? And so, you know, it’s not just, hey, the the infrastructure needs to pour it over for electrification. It’s, it’s in an increasing demand cycle. And right now, you know, I’m looking really just across the pond over the UK. And I think we’re seeing, you know, electric prices there. Spike dramatically. I don’t live there. So I’m reading some of it third party and, and, you know, everyone’s putting out different numbers, but every number they’re putting out is staggering at the price increases that that they’re expecting to come, you know, over this over this next 12 month period.

David Hunt 39:32
Yeah, no, it doesn’t have an impact on the juice we put in our vehicles, which for a while, we were quite smug when petrol prices were high and electricity was low. But that’s, that’s not necessarily the case right now. So that was another thing I was going to touch on when there’s so much to talk about. And I know that on your website, you’ve got some great white papers around some myth busting, which, you know, people can can go and research and take a look at but that was one of the things around a plus point was that whilst there may be some expense in moving to an electrified fleet, In January, the cost of ownership was already less than going more so in that direction, clearly in Europe, that is to say with the price change that that sort of impacts into that. But going back to clients, those who are interested or wanting to go down the path, what are the things that potentially either the barriers, are they technology in terms of, you know, others of inductive, charging all these other things? Which are perhaps around the corner? Are the financial? Are they cultural? What are the sort of the barriers, which are stopping some of your customers throwing themselves wholeheartedly into the transition?

Brendan P. Keegan – Merchants Fleet 40:33
Yeah, what I’m saying is, it’s not stopping it’s having them question. And I would go to kind of the psychology and culture side of it, you know, we’re spending a tremendous amount of time with driver management with change management with range anxiety, you know, that we have a lot of our clients that don’t talk to us range anxiety will pull up their telematics data will say, your average vehicle drives 80 miles a day. Yeah, in the in the areas, we’re going to put the electric vehicles, so we’re not going to go put the electric vehicles in North Dakota, we’re putting them in these targeted cities, and we go 80 miles a day, not a problem, not a problem. But you can just you can see that, and then you you put the driver and the drivers like what am I going to do in the middle of the day, and what we actually convince them of is that you’re going to charge this every night when you bring it back. So unlike your ice vehicle, which every day isn’t, you are not going to start the day with a full tank of gas. In your electric vehicle, you’re going to start today, every single day with a full tank, and you’re never gonna have to really gas up, you know, so if you drive by a gas station in the US, and you drive by and you see, you know, UPS man or an Amazon banner for some fleet vehicles, if that were an electric vehicle in the future, the drivers aren’t going to take 15 minutes out of their day, 10 minutes out of their day to fuel, they’re actually going to be doing that at the end of the day, overnight in the morning before they get in it. So you know, it’s it’s cultural. And then even once the company has made the decision, there’s typically remember that 20% of people I said, when you order pizza, they say Why don’t you order something healthier? And by the way, the next week, when you order something healthier, the pizza people go, Hey, how come you didn’t order pizza this week? So you’ve always got 20%. But you’ve also then got the 20% of people that quite frankly don’t want to see this change. And they just come in culturally, and with no intent with no ill will or just question everything. And so what that does, instead of making maybe a smooth transition, it just makes it a little bit bumpy. When that all goes away, is when somebody on the client side is a strong leader that kind of says, Hey, guys, I hear you. I know, I get the range anxiety. I know you’ve got some questions. You’re asking about the grid, you’re asking about the infrastructure. But we’re doing this and we’re moving forward. When when when there’s a strong leader, representing the client, I can tell you all those challenges I just talked about just melt away, literally melt away.

David Hunt 43:04
Yeah, yeah, no, it’s fascinating. Initially, it does take strong leadership. And it does take a socio cultural shift. Any kind of disruption does that we could talk forever Brennan has been fascinating talking to and like I say, will point people on via the episode page to the merchants flee website, notice some shoot some some great data and some great white papers and information there. I always close the podcast with looking at and you’ve mentioned one already because I’m an avid reader and always look to absorb more to see if there are any book recommendations that you have either professional or personal that that sort of inspired you or that you return to or keep you going in life. You’ve mentioned one which was obviously the energy bus, which will refer to anything else.

Brendan P. Keegan – Merchants Fleet 43:44
There’s one book that if you haven’t read it until every piece every person out there, you’ve got to listen, you got to you got to listen to it or or or read it in a book I read a long time ago, the tipping point by Malcolm Gladwell. I actually keep one in my office and and I probably give four or five way during the year when I’m just talking to somebody and I grabbed one. It’s great book it talks about how how things get past the tipping point. So in that Geoffrey Moore’s chasm, how does it go from early adopter to innovator? How does it jumped early majority? Now there’s another book by a gentleman, Jonah Berger, who’s a professor at the Wharton School of Business in at UPenn. And he writes about contagious. So if you’re in a service business, how do you get your business to be contagious? Because, you know, like, for instance, you know, merchants, we’re never going to run a Superbowl ad, we’re never going to have a blast. We’re never going to have this big advertising budget. But the best way for us to grow our business is word of mouth people to hear about us. And he’s got a whole book and a whole process on how do you make your business contagious? And I can tell you those two books I don’t think there’s a week that goes by that, that I don’t refer to those two books in some way. In some talk with with our employees.

David Hunt 44:54
Super No, appreciate that. Certainly the tipping point is on my on my shelf. The contagious I’ve heard up Now I’ll dive into that. So thanks for sharing that. But listen, Brennan has been great to talk to you. And you know, as I said, at the top, it’s just so important. We have the traditional industries and traditional companies. We’re making the transition. And it’s not just all about Silicon Valley startups or, or Berlin, Amsterdam or London based startups is about everybody going on this journey. And it’s great to see what you’re achieving with merchants fleets. Thanks for sharing some of those stories with us.

Brendan P. Keegan – Merchants Fleet 45:23
All right. Thank you for your time, David. I really appreciate your insights. And I enjoy following you and good luck this week. At your at your panel you’re moderating.

David Hunt 45:32
Yeah, yep. flight to San Diego. Lee leaves, I think about four or five hours and it’s a federal jaunt from from Europe to San Diego. So plenty of reading time there for sure. All right. Thank you. Thanks, Brandon.

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