Author: Sean M. Lyden

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The Future of Drones in the U.S. Utility Market

In the past year, a handful of U.S. utility companies – including San Diego Gas & Electric, Southern Co. of Atlanta and Commonwealth Edison Co. of Chicago – have received clearance from the Federal Aviation Administration (FAA) to perform limited testing with aerial drones for transmission and distribution line inspections.

“Utility assets require regular inspections that can often be dangerous, time consuming and costly for human personnel,” said Christian Sanz, founder and CEO of Skycatch Inc. (, a San Francisco-based drone developer. “However, drones outfitted with different types of sensors and cameras can perform aerial surveys and provide high-resolution imagery at a much faster, safer and cheaper rate. We’ve seen this with using drones to detect things like defective panels on solar farms or blades on wind turbines, cracks in pipelines, and malfunctions with heavy machinery and equipment.”

And the future looks bright for drones in the utility sector. According to a recent report from Navigant Research (, global annual revenue for drone and robotics technologies for utility transmission and distribution is expected to grow from $131.7 million in 2015 to $4.1 billion in 2024, about a 31-fold increase over 10 years.

The biggest constraint for the growth of drones in the U.S. utility market is FAA regulations, said James McCray, senior research analyst with Navigant Research and author of the report. “The potential for high growth is there,” he said. “But it’s more of a question as to when the regulations will permit the utilities or service companies to operate drones on an as-needed basis rather than having to file a 72-hour-prior flight plan to put one in the air. So, I’m postulating that it will take until about 2018 before we begin to see dramatic growth in the commercial drone market.”

Drone-Guided Machines
Beyond line inspections, drones are also being tested for use as aerial 3-D mapping devices that transmit real-time job site data to help guide autonomous construction equipment on the ground.

The most prominent example right now is Skycatch’s partnership with heavy-equipment manufacturer Komatsu ( in Japan. Since there is a shortage of skilled construction laborers qualified to operate heavy machinery in Japan, Komatsu has developed autonomous excavators, guided from the air by Skycatch drones, to take the human operator out of the equation.

This combination of drones and robotics could have interesting implications for utility fleets in the U.S., with applications ranging from autonomous trenching machines to self-driving all-terrain utility vehicles with mounted robotic heavy equipment.

“Given our partnership with Komatsu and their strong presence in North America, we are optimistic about the future of bringing similar [drone-to-machine] solutions to the U.S. over the next 10 years, or even sooner,” Sanz said. “The highly accurate intelligence that drones are able to provide will become more compatible with heavy equipment and machinery, making them smarter, safer and faster.”

The Value of Drones is in the Data
Will utility companies manage their own fleet of drones?

That will depend on the organization, according to McCray. “While some utilities will manage their fleet of inspection drones, many will choose to contract under a drone-on-demand services model.”

In other words, the drone company would have the expertise and responsibility for maintaining and upgrading the drone hardware and software, while also ensuring that all drone operations are FAA compliant. The utility companies would then lease the drones and the software associated with them on an as-needed basis, which would help keep costs down.

McCray said that the drones themselves will eventually become commodities. “You buy one, run it for a year or two, and then you buy the next generation, like we do with mobile phones right now,” he said. “The real money in the drone market will be in the integration of the streaming information coming off the drones – such as visual, temperature, 3-D mapping data – with the analytics systems at the utilities’ operations centers.”

Sanz agreed. “The drone [hardware] is simply the tool we are using now to capture the data – and it’s in the data where the greatest value exists for customers.”


The Boundaries
The FAA requires special certification for commercial drone users, like utility companies. As of press time, here are the FAA’s conditions and limitations governing commercial drone operation:
• A drone operator needs a pilot’s license.
• The drone must weigh fewer than 55 pounds, including payload, such as cameras and sensors.
• Flights can go no more than 200 feet above the ground.
• The drone must be operated in the pilot’s line of sight.
• A Notice to Airmen must be filed no more than 72 hours in advance, but no fewer than 24 hours prior to the operation.
• A Certificate of Authorization report must be filed with the FAA every month, reporting the user’s number of flights – even if there were zero – pilot duty time and equipment malfunctions.

The Risk Management Challenge in a Self-Driving World

When you read the latest media coverage, you get the sense that when it comes to self-driving vehicles, it’s not a matter of if, but when. Yet, as autonomous vehicle systems get more and more market-ready, will our society be ready? And, on a more granular level, will we in the fleet industry be ready?

Take, for example, risk management. When a robotic vehicle is involved in a collision, who – or what – is responsible?

There’s a growing consensus around the idea that the automaker would assume liability. But what would happen if a sensor on your self-driving truck failed to detect a child darting behind the vehicle as it shifted in reverse, and the truck fatally struck that child?

Sure, you might have grounds to blame the OEM for the sensor malfunction, but it’s your utility’s logo on the truck. Now, your organization is dealing with a public relations firestorm for an incident – and a truck – your crews had no control over.

Or, what about the liability with upfitted trucks? It’s one thing when self-driving sensors are installed by a single car or truck manufacturer. But what about when a third-party upfitter mounts a body on a chassis? Would the upfitter be responsible for installing the cameras, sonar, radar and other sensors on the truck body and integrating them with the sensors on the chassis? If so, how does the industry ensure safety and quality control of the self-driving systems for both the chassis and body?

And who, ultimately, would be liable for an incident caused by a sensor malfunction on an upfitted truck? Would it be the chassis OEM, the upfitter or the sensor manufacturer?

Or, what if there’s a computer glitch? When a vehicle is driven by software, who would be allowed to work on it? And if persistent system glitches occur, causing a collision, who’s the responsible party – the vehicle OEM, the repair shop or the utility itself?

Yes, all trend lines seem to be pointing toward a self-driving future. But there are many questions – beyond the technology – that government, industry and citizens must answer before robots will rule the roads.

Sean M. Lyden


Executing an Effective Fleet Rightsizing Strategy

About four years ago, East Central Energy, an electric distribution cooperative headquartered in Braham, Minn., underwent a corporate restructuring that shifted fleet from operations to the finance department. This reorganization, along with a drop in demand for new services, sparked an initiative to rightsize the fleet, said Holly Giffrow-Bos, East Central Energy’s fleet supervisor.

“When fleet was moved to finance, that’s when we started doing a lot more analyzing and measuring the financial performance of our fleet,” Giffrow-Bos said. “And when the scope of our business changed [with lower demand in new services], we analyzed the impact on our fleet. We measured and ranked our assets at each of our five locations, based on set criteria, to determine which assets we should keep, replace, reassign or eliminate.”

The result: about a 13 percent reduction in fleet assets, from 205 to 178 units since 2011, which has generated tens of thousands of dollars in annual savings for East Central Energy.

A reorganization of sorts also prompted a fleet rightsizing initiative for Matt Gilliland, fleet services manager at Nebraska Public Power District, which operates more than 1,100 fleet assets.

A few years ago, Gilliland’s fleet organization served only the transmission and distribution business units. But in 2012, his department’s responsibilities were expanded to oversee the fleets of all the district’s business units – a total of eight – creating opportunities for fleet consolidation and reduction.

“When we onboarded those business units, we rightsized their fleets, identifying about 70 assets that could go away,” Gilliland said.

Rightsizing Defined
Both Giffrow-Bos and Gilliland will tell you that rightsizing refers to more than simply downsizing. It’s about striking the optimal balance between fleet composition and business requirements. This is because, depending on changes in the business, rightsizing might actually mean having to add assets to maintain proper service levels to customers.

Rightsizing also relates to the right size or spec of a vehicle. In some applications, you might be able to downsize to a vehicle that offers a smaller, more fuel-efficient engine and lower purchase price. But in other instances, you might discover that you need to bump up to a larger truck because the current one has been consistently overloaded, creating premature maintenance issues and excessive downtime.

And it’s important to consider the right type of asset when formulating your rightsizing strategy. For example, you might have assigned someone an SUV, when a less expensive, more fuel-efficient passenger vehicle could still do the job. By making this switch, you may not be reducing the overall fleet size, but you are rightsizing both operational and capital expenditures.

Fleet Manager as Adviser
Any time there’s a proposed change – especially when it impacts a business unit’s access to equipment – there are politics involved. The fleet managers who know how to navigate those politics will be the most successful in implementing positive change for all affected parties.

This starts with the fleet manager taking on the role of an adviser to the leaders of each business unit, said Paul Lauria, who has conducted numerous rightsizing studies for government and utility fleets for more than three decades as president of Mercury Associates (, a fleet management consulting firm based in Rockville, Md.

“In my view, the fleet manager’s role should be to help business units make sound fleet resource decisions that save money and do not impair the operators from doing their jobs,” Lauria said. “It’s not the fleet manager’s responsibility to force operators into accepting a particular type of vehicle. Instead, it’s their role to outline what are the most cost-effective types of resources to perform particular jobs.”

Gilliland agreed. “The role of the fleet manager is mostly tied to information,” he said. “It’s fleet’s job to identify what we should replace and when based on utilization history and life-cycle costing. We take that data and sit down with the supervisor of each independent business unit. We convey to them what we plan to replace and when, and they have an opportunity to provide good feedback on what they really need to do their jobs. It’s more of a collaborative process.”

Lauria said that business unit input is essential before making final decisions about whether to retire an underutilized asset. “That supervisor might say, ‘Yes, I have two backups. But that’s because we’re not doing a great job replacing our frontline units. So now I have to put those backups into service fairly often, while my frontline units are in the garage for repairs.’ Or it might be a situation where the supervisor says, ‘We’ve analyzed the demand for these types of assets during certain times of year and these assets are going to be heavily utilized in the winter months.’”

According to Giffrow-Bos, “If we see something underutilized, we get with the supervisor of that business unit and find out why they aren’t using it. Has the scope of the business changed? Or is it that we haven’t had any jobs that require this piece of equipment? If so, is this something you think you can live without? Or is this something you could rent when the need arises?”

Seeing the Big Picture
While business unit supervisors are best equipped to provide field-level insight into their equipment needs, the fleet manager sees the big picture.

“Fleet managers have enterprise-wide visibility into the costs of the fleet, and the deployment and utilization of vehicles,” Lauria said. “You wouldn’t expect individual business units to have that same visibility.”

And sometimes that difference in perspective can create tension between fleet and the business unit. “One of the key challenges when rightsizing is getting supervisors to see beyond their own business,” Gilliland said. “When it comes time to share or reassign vehicles, it’s somewhat difficult to get leadership of those units to see beyond themselves – to get one business unit to give up an asset for the benefit of another.”

So, how do you navigate a situation like this to help bring about consensus? “It comes down to communication and relationship building. You need to cultivate a relationship with that supervisor so you can have frank yet respectful conversations about what’s best for the organization as a whole,” Gilliland advised.

Lauria recommended using objective data to help business unit supervisors see the financial impact of keeping an underutilized vehicle. “A well-defined cost-chargeback system, for example, creates economic incentives for the business units to pay attention to the fixed cost of adding or keeping fleet assets,” he said. “If a business unit is charged $1,300 a month for the fixed cost of a piece of equipment they barely use, you’re empowering them to say, ‘You know what, this is crazy to keep this. We use this thing six hours a month and we need to explore other options for meeting this particular type of need.’ In some cases, there are no other good options, but the point is that a good charge-back system engages fleet users in the management of fleet costs.”

Rewards of Rightsizing
Even relatively small changes through rightsizing can yield considerable cost savings from a reduction in capital purchases and the elimination of ongoing maintenance, tax and insurance costs for each asset retired from the fleet.

For example, three years ago East Central Energy began the process of retiring or reassigning 12 vehicles by switching over to an IRS-approved driver reimbursement program managed by Runzheimer International (, a Waterford, Wis.-based firm that provides mobility program management services. “We were able to take the 12 vehicles and reassign or eliminate them from the inventory,” Giffrow-Bos said. “If it was a decent truck and worthy to keep in our fleet, we would reassign it to another district and fulfill a need of another driver, without having to go outside and purchase a new one.”

The result? “We’ve saved about $38,000 annually with the 12 drivers on the program,” Giffrow-Bos said.

So, how often should you conduct a fleet rightsizing analysis for maximum benefit?

“If you’re talking about doing an enterprise-wide rightsizing study, I’d say once every five years,” Lauria advised. “If you’re identifying individual assets that are clearly being used less than the norm for that type of asset and application, then you could evaluate those opportunities for rightsizing at any time.”

An Ongoing Effort
The key takeaway here is that rightsizing is not a one-and-done project; it’s an ongoing, continuous improvement effort. That’s because the scope of your business can change at any time, directly impacting the number and type of assets you need to ensure that you’re maintaining a fleet that’s the right size.


Spec’ing All-Terrain Utility Vehicles for Maximum Safety

All-terrain utility vehicles (UVs) are machines used by utility fleets to transport people, materials and equipment across potentially hazardous off-road environments to inspect or repair power lines or perform other tasks in remote areas. These vehicles go where four-wheel-drive pickups cannot, navigating steep slopes, trudging through heavy brush, hovering over swamplands or even floating and powering across creeks and rivers, depending on the make and model of the UV.

If the UV is not designed for the ground conditions of a particular job, you risk having crews stranded in a hard-to-reach area or, worse, injured from a rollover, debris falling onto the cab or unsecured cargo flying into the cab.

So, how should you spec your next UV to ensure the maximum safety of your crews in off-road environments? Keep these five points in mind.

1. Terrain
What type of terrains will this UV need to handle? What degree of slopes? Will it encounter marshes or swamps? What about deep water? These questions are fundamental to selecting the right machine for the job and ensuring the safety of your crews.

Take, for example, UVs that use track systems instead of wheels. The type of terrain directly impacts the track size you should select.

Craig Simonton, director of sales operations for Hydratrek Inc. (, a manufacturer of amphibious UVs, said the standard track on the company’s smaller machines, such as the XT66 model, is 16 inches. But if the UV is expected to operate primarily in swamp and wetland conditions, he recommended that fleet managers spec the larger 20-inch track to further reduce ground pressure, so that the machine can essentially hover on top of the muddy surface and avoid getting bogged down.

When it comes to ground pressure, the principle at work is this: The wider the UV’s track, the lighter the machine’s overall footprint because its weight is spread across a larger surface area.

“Track size can be the difference of successfully getting out to the job site or not,” Simonton said. “If you don’t have a light footprint on marsh, swamps and wetlands, there’s a good chance that you’re going to get stuck. Then you have to deploy more people and equipment to try to recover the vehicle.”

Slope angles are also important to factor into your specification, including sidehill, uphill/downhill, approach and departure angles to prevent rollover risk. For example, the Prinoth Panther series tracked vehicle allows for a maximum sidehill slope of 40 percent (22 degrees) and incline/decline of 60 percent (31 degrees).

But how can you ensure that your crews operate the machine within the manufacturer’s allowable parameters? Bill York, sales manager for Prinoth LLC (, recommended adding an inclinometer to the machine’s specifications. “With the inclinometer, if the machine exceeds the maximum percent or degree of slope, then an alarm goes off and the operator can adjust course to take a safer route.”

2. Speed
This is primarily a consideration for spec’ing UVs with wheels, which are inherently faster than tracked vehicles that are designed to operate at relatively low speeds between 6 mph and 14 mph.

If you need to ensure that drivers operate the UV within a certain speed, Jim Blaze, national accounts manager for Polaris Industries (, advised that fleet managers should consider a speed-limiting option that caps speed at 25 mph.

Blaze also recommended three-point safety harnesses in higher-speed UVs, instead of lap belts. “[Polaris] puts shock absorbers on safety harnesses because, in remote areas, where the ride can get real bouncy at higher speeds, the shock absorbers can help protect you from dislocating your shoulders.”

3. Visibility
“It’s important to get as close to 360-degree visibility as possible,” York said. “Sometimes that can be done by using mirrors. But often, when you have equipment [such as a digger derrick] mounted on the machine, the mirrors aren’t enough because the equipment gets in the way.”

One solution is to add cameras, York said. “I’ve seen vehicles built with as many as four cameras on them for all directions. And the cameras feed into a single screen in the cab, giving the operator maximum visibility to navigate the vehicle around hazardous conditions.”

Lighting is also an important consideration. “There are quite a few work area light and warning beacon options you should consider,” York said. “But at a minimum, you want good forward and backward lighting because if you can’t clearly see your surroundings at night, that can create a problem.”

With smaller, higher-speed wheeled UVs, Blaze suggested adding a windshield, either made out of polycarbonate – the less expensive option – or safety glass.

“If you’re going 25 mph across 30 miles of terrain, and the wind is blowing on your face the entire time, it would make sense to put a windshield up front,” he said.

When would you choose safety glass over the polycarbonate windshield?

“One example is if you’re running the machine around nuclear plants or power distribution centers for security purposes,” Blaze said. “In that application, you would want maximum visibility, especially in inclement weather. And that requires windshield wipers, which work well with the glass windshield but would scratch the polycarbonate. So, in that instance, you would choose the glass.”

4. Cab Protection
You expect crews to avoid rollover situations. But if the UV happens to tip over, is the cab strong enough to protect your people? That’s where rollover protective structure (ROPS) certification comes into play.

“Make sure the cab is ROPS certified to the highest standard in the world – ISO 3471,” York advised.

For higher-speed UV applications, Blaze recommended adding a “headache rack,” which is essentially a mesh system installed at the rear of the cab to keep cargo from sliding forward and injuring the crew.

5. Onboard Safety Equipment
These are the options you hope you don’t have to use, but they’re available just in case.

“You want to make sure that when operators go onto various terrains, that they have a way out,” York said. “If they go into a swamp, how are they going to get out? What is the backup plan if they can’t? Think this through. Do they have survival gear with them?”

Some of the gear to consider includes an onboard fire extinguisher, life vests for amphibious UVs and a recovery winch.

“Because of the nature of the vehicle, having a winch is very important,” Simonton said. “Sometimes the farther you can go, the tougher the environment gets, and you can get stuck. It’s always best to ensure your utility vehicle is equipped with a winch so you have the ability to get out of tough situations when you need it.”

The Bottom Line
When crews are sent to do a job in an all-terrain UV, they know that they’ll likely encounter hazardous conditions. So, equip them with a machine that gives them confidence and peace of mind that they can do their job with maximum safety and productivity.


The Final 3

Each issue, we ask a fleet professional to share three keys to fleet success.

This issue’s Final 3 participant is Holly Giffrow-Bos, fleet supervisor for East Central Energy, an electric distribution cooperative headquartered in Braham, Minn. Giffrow-Bos oversees a fleet of approximately 180 pieces of equipment across five locations.

#1: Involve your fleet team.
“When you give your team a feeling of ownership and involve them in decision-making, this gives them greater passion in their work. And that will translate in helping make your vision become a reality because you have everyone banding together for a common purpose.”

#2: Join a network of fleet professionals.
“I can’t begin to tell you how much I’ve learned by simply connecting with people in the fleet world. There are so many organizations available where we can network with other fleet managers and learn real-world strategies and best practices that can be vital for our success.”

#3: Make communication a top priority.
“We have a daily tailgate session with our technician team – even if it’s just five minutes – to go over the plan for the day and where we need to be at the end of the day. And then for our external customers, we recently started a monthly departmental update, where we share some of fleet’s achievements and important updates. Folks are really surprised about what we’re really doing here because we do a lot more than just keep a truck running on the road.”


Winterizing Your Drivers

It’s one thing to winterize your fleet, but what about the drivers who are expected to operate vehicles in harsh winter conditions to repair downed power lines or a broken water main? Are they winterized as well?

This is an important question because snow, sleet and ice impact how a vehicle accelerates, handles and stops. And if your crews aren’t prepared with the driving skills and mindset they need to safely navigate hazardous winter roads, they’re putting their health, the public and your utility’s reputation at risk.

So, how can your organization effectively winterize your drivers? UFP spoke with Art Liggio, president of Driving Dynamics Inc. (, a Newark, Del.-based firm that provides companies with advanced performance driver safety training and fleet risk management expertise. He offered these three tips.

1. Reduce speed as conditions deteriorate.
“While you can actually move quite fast in a straight line on ice and snow, once you have to stop or turn, the laws of physics start to catch up with you,” Liggio said. “Drive responsibly by slowing down and staying vigilant in maintaining a sufficient safety zone.”

Liggio recommends that drivers avoid using the brake whenever possible in deteriorating weather conditions. “Slow down early enough, so you can roll up to a traffic light change without having to brake completely,” he said. “When coasting to slow down, it’s still important to engage your brake lights by lightly pressing the brake pedal so those behind you understand that you are in the process of slowing. But when you do need to stop or slow down, start braking early and gently to keep yourself and others behind you in control.”

2. Know where to focus your eyes.
How do you safely maneuver the vehicle when it begins to skid on ice? The answer starts with your eyes.

“When drivers sense the vehicle is skidding on ice, their tendency is to jerk the steering wheel frantically in all different directions, with their eyes focused on what they want to avoid, like oncoming traffic or parked vehicles, or pedestrians. But what happens is that where you focus your eyes, is where you’re actually pointing the vehicle – toward what you’re trying to avoid,” Liggio said.

This is called “target fixation,” and drivers should focus their eyes on targets that lead them to safety.

“Once you’re able to identify an acceptable escape route, get the wheels pointed in that direction, no matter which direction the vehicle is moving,” Liggio said. “This could be the side of the road or somewhere that would minimize harm to you and the public. Keep your eyes – and the wheels – aimed at where you want to go, not on what you’re trying to avoid.”

3. Adjust for fluctuations in weight distribution.
Weight distribution changes the handling characteristics of a vehicle. If a driver operates a fully loaded truck at the beginning of the day and then unloads it, the empty truck is going perform much differently in terms of center of gravity, acceleration, braking and traction on wintry roads.

“If the truck is fully loaded, that can help with the traction, especially in the rear of the vehicle,” Liggio said. “But as the truck is unloaded, there is less weight on the vehicle and that could increase the potential of slippage in icy conditions. Also, if it’s a rear-wheel-drive vehicle, you might find in slow-moving conditions that as the weather gets worse, you’ll have problems accelerating and can’t get the truck to move.”

How do drivers counter this phenomenon? The starting point is to be aware of how changes in weight distribution can impact the vehicle’s performance and handling, especially in snow and ice conditions.

“You have that muscle memory so ingrained that if you’re used to driving the vehicle at full load, you will likely revert to driving like that even if the vehicle is empty, unless you make yourself more attentive to the changes,” Liggio said.

Hardwiring Safe Winter Driving Skills
How often should drivers be trained for winter driving techniques to instill safe habits? Liggio recommends that drivers receive hands-on instruction – in a training vehicle on a closed course and/or in a simulator – at least once every three years, plus an online refresher course prior to winter in the intervening years to reinforce what they’ve learned.

So, if your fleet operates in an area known for harsh winters, are your drivers and crews ready? Have they been “winterized” – equipped with the enhanced driving awareness and skills they need to safely operate vehicles in snowy and icy conditions?


Winter Weather-Related Crash Statistics
Winter weather can wreak havoc on road conditions and driver safety. Consider these statistics compiled by the Federal Highway Administration, which represent annual averages in the U.S.

Snow/Sleet: 211,188 crashes; 58,011 persons injured; 769 fatalities

Icy Pavement: 154,580 crashes; 45,133 persons injured; 580 fatalities

Snow/Slushy Pavement: 175,233 crashes; 43,503 persons injured; 572 fatalities

Ethics: The Biggest Hurdle for Self-Driving Vehicles

In October, thousands of Tesla Model S owners across the globe downloaded the Autopilot upgrade, launching the most advanced commercially available driver assistance technology to date. When engaged, Tesla’s Autopilot operates on the highway like cruise control on steroids, using cameras to keep the vehicle within lane markers, radar to maintain safe speed and distance from vehicles ahead, and sonar to sense when to safely change lanes.

And this is just a taste of what’s to come, as a growing number of automakers and technology giants – including Google, Apple and Uber – have entered the race to launch a fully autonomous vehicle by the end of this decade.

But as a machine takes on more and more of a human driver’s responsibility for decision-making – such as selecting the most optimal routes, deciding when to change lanes and determining when to safely pass another vehicle – how will it handle the moral and ethical dilemmas that humans face from time to time?

Consider this scenario: You’re riding in a self-driving car and approaching a busy intersection at 45 mph. With pedestrians congregating at the corner to your right, your car doesn’t detect a child on a bicycle attempting to dart across the street until it’s too late to stop. So, what does your vehicle decide to do?

It could veer to the left into oncoming traffic and avoid the child but instead crash head-on into a car carrying a family of four. It could lurch to the right but risk barreling into a group of eight pedestrians. Or it could hit the child.

What would the machine choose? How would it evaluate its options? And whatever it decided, who or what would be responsible for the consequences?

It’s hard enough as humans to make split-second moral decisions in times of crisis. But at least we have the power at that moment to choose with our conscience. Would we, as a society, be OK with the idea of being spectators inside machines that make life-and-death decisions on our behalf, without our consent?

Engineers are achieving quantum breakthroughs in artificial intelligence that will function as the “brain” for tomorrow’s fully autonomous vehicle. But will they figure out how to give a machine a soul?

Sean M. Lyden


The Millennial Challenge: Attracting and Retaining Younger Workers in Utility Fleet Operations

“Seek first to understand, then to be understood.” This is the fifth habit in Stephen R. Covey’s perennial best-seller, “The 7 Habits of Highly Effective People.”

And it could also serve as a guiding principle for today’s baby boomer and Gen X fleet managers as they grapple with replacing a large swath of workers retiring over the next few years with millennials who bring a substantially different perspective toward their work and lives.

Also known as Generation Y, millennials – ages 18 to 34 as of 2015 – are projected to surpass the baby boomers – ages 51 to 69 – as the nation’s largest living generation this year by a total of 75.3 million to 74.9 million, according to Pew Research Center. They represent a much larger generation than their Gen X parents – ages 35 to 50 – who aren’t expected to eclipse the boomer population until 2028.

Millennials are often labeled as too idealistic, entitled, lazy and obsessed with instant gratification. But as the seismic generational shift occurs in the job market, smart fleet managers must look beyond the perceptions and “seek first to understand” to compete for the best young talent.

So, whether you’re a boomer, Gen Xer or millennial yourself, how can you more effectively attract, retain and motivate millennials? Consider these five strategies.

1. Talk about your industry, organization and the job in the context of purpose.
Millennials are looking for more than just a paycheck; they want to be part of something they perceive will make a difference in their communities and the world.

“The main characteristic we’re observing in millennials is that they’re purpose-driven – more so than other generations,” said Jim Finkelstein, author of “FUSE: Making Sense of the New Cogenerational Workplace” and the president and CEO of FutureSense Inc. (, a San Rafael, Calif.-based professional services firm that was founded in 1995 to advise, consult and support clients in the areas of people, organization and strategy. “When you look at old-school industries, such as the utility sector, you often see that they have a challenge of connecting with younger workers because they don’t address the ‘why’ question for millennials: ‘Why do I want to be involved with this industry?’”

Finkelstein said this priority of purpose versus paycheck is largely because millennials have become disillusioned by observing their parents, who would grind it out in jobs they didn’t enjoy, sacrificing family time in the name of career advancement and financial stability, only to get burned by layoffs and market crashes, like what happened in 2001 and 2008.

“They’ve seen the impact of economic disaster and the emotional toll it has taken on their parents’ generation. And they’re saying, ‘You know, maybe I can get by with a little less.’ They’re much more minimalistic in how they approach the acquisition of assets, and more focused on fulfilling their passion and purpose,” Finkelstein said.

How can the utility fleet industry tap into a millennial’s pursuit of a purposeful career?

Finkelstein advises fleets to frame the job in these terms: “Why is it important to have a fleet that is well-functioning and fuel-efficient? How will this impact creating a cleaner environment? How will it help advance the causes they believe in? Millennials need to see the purpose, the big picture that draws them into a movement – something more than, ‘Oh well, I need to get to work to fix a few trucks today.’”

Matt Gilliland, fleet services manager for Nebraska Public Power District, said that his utility’s purpose-driven focus has helped substantially with recruiting younger workers. “We’re all about doing what’s right for Nebraskans,” Gilliland said. “And that commitment to serving the community really connects with millennials who share that service-oriented attitude. They like to see an organization, a team or even a boss that has objectives larger than just completing work by the end of the day.”

2. Accommodate for work-life balance.

According to a recent survey by Ernst & Young, “Global Generations: A Global Study on Work-Life Challenges Across Generations,” U.S. millennials are the most likely generation to say they would change jobs – 77 percent, versus 71 percent for Gen X and 49 percent for baby boomers – or give up an opportunity for a promotion – 65 percent, compared to 56 percent for Gen X and 47 percent for boomers – to more effectively manage work-life balance.

A major driver of this trend, the report stated, is that close to 80 percent of the millennials surveyed are part of dual-income couples, with both spouses working full time. And that means they share more responsibilities at home, compared to the majority of baby boomers, where one spouse works full time. As a result, millennials value increased schedule flexibility and paid parental leave more than other generations, the report said.

Paul Jefferson, fleet manager for Oklahoma Gas & Electric (OG&E), has observed this trend firsthand with younger mechanics in his organization. “There were several mechanics we would hire, and six months to a year later, they would go on and work for someone else. They would even lose money to go somewhere else.”

When looking deeper into this issue, Jefferson realized the existing shift schedule didn’t work well for younger mechanics with family responsibilities. “In the past, we had 95 percent of our mechanics scheduled to work the evening shift [2-11:30 p.m.] and a handful work the early shift [7 a.m.-3:30 p.m.],” he said.

Jefferson worked with his team to develop a compromise, so that all mechanics would be on a rotation with two weeks of day shifts and two weeks of evenings. He also changed the evening hours to 1-9:30 p.m., so those who worked the late shift would still get home two hours earlier than the previous schedule. That way, his team could accommodate the work-life balance needs of his mechanics by providing more day shifts, while ensuring all shifts are fully staffed to meet the service needs of the entire organization.

The new schedule went into effect in September 2014. A year later, it seems to be working. “We haven’t lost any mechanics since the change,” Jefferson said.

3. Become a more collaborative leader.
Beyond being purpose-driven and offering a more flexible schedule, what should utility fleets consider to attract and motivate millennials?

“Create a highly collaborative, team-oriented environment, where people are tapping into each other’s potential and where leaders are seen more as mentors and guides,” Finkelstein said.

Gilliland agrees. “Traditionally, it has been that those who exhibited a high level of technical knowledge would get promoted into management,” he said. “But millennials put more value on strategic thinking and seeing the big picture than technical expertise. They want their leader to be more of a team leader, an inspirational guide who collaborates with them to get things done, and there’s less emphasis on someone who has the technical knowledge.”

This also means the command-and-control leadership model is likely to be a turnoff to most millennials. “It used to be, if the boss says it, you do it. Not anymore,” Gilliland said.

He recommends that fleet managers take a more participative management approach, getting workers involved in the planning and decision-making processes. “Instead of me sitting in a meeting and dictating the steps we’re going to do, it’s more of this: ‘Here are our challenges, here’s what would be ideal and here are the expectations of what things should look like in the end. What are some ways we can get there?’”

4. Tap into instant gratification as a motivator.
Millennials have become accustomed to on-demand conveniences. They’ve grown up in a digital world where, with a few keystrokes on a computer or swipes on a smartphone, they can order food, watch videos or even direct message the most famous celebrities. And with social media likes, shares and comments, they’re conditioned to get instant feedback on their thoughts and ideas.

In other words, millennials are conditioned to expect instant gratification. So, how does this impact your management style?

Jefferson said that one adjustment he has made is to “react quickly and communicate frequently. Especially with the positive stuff. Often, that motivates [millennials] more than a raise.”

Finkelstein recommends that when you’re giving raises, bonuses or other type of rewards, don’t wait until the end of the year. “We often wait too long to give somebody a bonus, the money that recognizes their accomplishments,” Finkelstein said. “Make those rewards more episodic throughout the year – that’s great for keeping millennials engaged.”

This goes for nonfinancial rewards as well, according to Finkelstein. “Based on their desire for work-life balance, a real big driver for millennials is time off,” he said. “We might assume they’re lazy, but in fact, if you give millennials more opportunities to take time off throughout the year, they refresh, renew and come back even more juiced to do the work that is necessary.”

5. Personalize your approach.
Despite some of the common characteristics of millennials, avoid the trap of assuming all millennials fit the same profile. “We have to recognize unique motivators and customize our approach on how we lead people in the marketplace,” Finkelstein said.

He recommends fleet managers put together what he calls a “UMP” – a unique motivational profile. “Millennials who don’t have kids have a very different motivational profile than others that have kids. We also have real diversity in needs and interests. So if we start generalizing and say all millennials want time off, there may be millennials who don’t. I think we have to resist the urge to generalize.”

That’s the hard part. And it takes time. But it’s imperative to personalize your approach if you’re going to get the most out of your people, Finkelstein said. “Everybody who works on the shop floor, everybody who works as a mechanic – they are not all cast in the same mold. They are all different and unique. Once we get that, then we’re going to be able to build a system of interaction with them that’s customized and truly effective, tapping into their unique humanness, potential and motivations.”

The Bottom Line
All five of these strategies point back to Covey’s maxim to “seek first to understand.” It’s only with deep understanding and genuine empathy that you can effectively connect with the minds and hearts of millennials – and maximize their potential in your organization.


Spec’ing Backhoe Loaders With Operator Comfort in Mind

The backhoe loader is like the Swiss army knife of trenching equipment, empowering utility crews to perform multiple functions with a single machine and operator.

On the rear is a digger that carves out trenches for laying underground gas, water and power lines at appropriate depths. On the front is the loader “bucket” that lifts heavy pipe, sewer lids, dirt and other materials to be moved from one part of the job site to another. The loader is also used to pour dirt back into the trench and smooth the soil in a way that restores the ground to as close to original condition as possible.

As a fleet manager, it’s easy to fall into the trap of viewing backhoe loader specs strictly through the lens of whether or not the machine can do the job. Is it the proper size? Does it offer the right dig depth? Can it carry sufficient weight in the loader? What is the machine’s weight, and how does it impact the combined truck and trailer weight for travel to the job site?

But don’t overlook the human factor. If your crews aren’t comfortable operating your backhoe fleet, you’ll likely experience an increase in worker fatigue, ergonomic injuries and lost productivity.

So, what are the specs to keep in mind when it comes to operator comfort? Following are three key areas on which to focus.

“Operator fatigue is where accidents happen, and operators often get tired either because of a hard, uncomfortable seat or they can’t reach the controls easily,” said Ernie Ferguson, division sales manager for Terex Construction Americas (

What seat specs can help maximize operator comfort?

“Six-way suspension seat, tilt wheel – you want to set up the seat so that the operator can be as comfortable as possible when working the machine,” Ferguson said. “And you want to make sure the armrests are adjusted, so the operator’s arms sit comfortably on the rests to operate the controls.”

Ride Control
Will you be “roading” the backhoe – driving it from job site to job site at speeds of up to 25 mph? If so, consider adding ride control to ensure a smoother ride.

“If you’re operating a backhoe with dirt in the loader, and you’re driving down the street to fill up another hole, ride control on the loader is like a shock absorber so that you can keep the material in the loader and you’re not bouncing around,” Ferguson said.

Katie Pullen, brand marketing manager for CASE Construction Equipment (, agrees that ride control is an important seat spec. “If you are going to be frequently roading the machine or working extensively in load-and-carry applications, add ride control and a heavier front counterweight to reduce material spill and increase operator comfort.”

Operator Controls
There are two primary types of backhoe controls: two-lever controls and pilot controls, which are like joysticks.

“The type of controls you choose is especially important for fleets because you have a wide range of operators to accommodate,” Pullen said. “If you have a fleet that has traditionally spec’d one type of controls – let’s say an older-style two-lever control – and your crews have learned that control, you may not want to switch to the more modern pilot right away. But as you bring on newer or younger operators, you’ll want to consider the pilot controls because they’re more intuitive.”

According to Ferguson, “The reason why pilot controls are becoming more prevalent on backhoe loaders today is because operators are younger. And they’re more comfortable using joysticks, like they have with their gaming systems.”

Pullen ties operator controls selection to worker loyalty and productivity. “The bottom line is that you want to get the controls your operators are comfortable with, with a minimal learning curve so they can work as quickly as possible to get the job done,” she said. “You want to make sure your operators stay happy with you, even if that means the older controls for your traditional folks and newer controls for your newer workers.”

So, when you’re spec’ing a backhoe loader for a job, make sure to also keep the operator in mind. “It’s really important for fleet managers to not discount what their operators are looking for in a machine, what they’re comfortable with. Because that’s what creates loyalty and, ultimately, drives worker productivity,” Pullen said.


When Does Leasing Make Financial Sense for a Utility Fleet?

Own or lease – which vehicle acquisition strategy makes the most sense for utility fleets?

There’s no clear-cut answer, said Marcin Michno, project manager, strategic consulting for Element Fleet Management ( “It’s impossible to define an ideal, uniform leasing scenario for an entire utility industry because there are too many variables, and every company has a different situation. Are they looking to preserve cash? What’s their tax strategy? Are interest rates favorable? What is the company’s risk tolerance? And not all vehicle applications should be treated the same. You have to look at the individual company’s situation and design a financial strategy around that.”

Bill Doman, department head, sales support at ARI (, agrees. “Conventional wisdom is that a regulated [public] utility is going to purchase everything, and an investor-owned utility is more open to leasing. But in reality, we know a few regulated utilities that lease 100 percent of their vehicles. And the vast majority of our utility clients – whether regulated or investor-owned – have a mix of owned and leased vehicles. They’re finding the right applications where they can take advantage of leasing and create a situation where they get the benefits of cash preservation, improved cash flow and potential tax advantages.”

Financial Flexibility
It’s a commonly used term, but what exactly is leasing?

“When you lease, you might be paying only for the usable portion of that vehicle,” said Steve Byrd, manager of truck excellence for Element Fleet Management. “In other words, you’re financing the spread between the capitalized cost of the vehicle and its residual value [the projected worth of the vehicle at the end of the lease term]. So, if the total vehicle cost is $100,000 and the residual is $20,000, you’re leasing $80,000 worth of truck – the amount of the truck you intend to actually use.”

One of the key advantages to leasing is the flexibility to customize the contract in ways that can minimize upfront cash requirements, reduce monthly payments and provide multiple options at lease-end – such as whether to turn in, purchase or sell the vehicle – based on the company’s finance and accounting objectives.

And although there’s no cookie-cutter profile, here are a couple scenarios where utility fleets could benefit from leasing.

High-Use Vehicles
“Generally speaking, it is possible to structure and tailor a lease to be advantageous for fleets with higher mileage and higher utilization,” Byrd said. “Vehicles that are more specialized [such as bucket trucks and digger derricks], with lower miles and longer life cycles, would have different, specific considerations for leasing and ownership. These structures will be different for each of these scenarios.”

What are some examples of high-utilization applications in utility fleets?

“Executive vehicle and meter-reader applications,” Doman said. “In these cases, fleet managers know exactly how many miles those vehicles will travel, and there’s a predictable driving pattern with them. They also tend to replace these vehicles on a shorter life cycle to ensure vehicles look new to maintain a clean public image.”

According to Byrd, “With any application, there should be a discipline to renew your fleet on a regular interval, so you can take advantage of the latest safety technologies, improved fuel efficiencies and lower maintenance costs. Working with your fleet management company will help in promoting that discipline.”

Accelerating Green Fleet Acquisition
Doman points to Edison Electric Institute’s fleet electrification initiative (see as an intriguing leasing opportunity for utility fleets. As of late last year, more than 70 investor-owned utilities had pledged to devote at least 5 percent of their annual fleet budgets to electrified vehicles.

“Instead of taking the 5 percent budget to purchase two large hybrid-electric bucket trucks outright, utilities can structure leases that spread that budget over, say, 50 plug-in electric vehicles for meter-reader applications,” Doman said. “Beyond just getting substantially more vehicles with the same budget, there’s also the PR advantage to that. You can say, ‘We have 50 vehicles out on the road that operate on clean electric power’ and promote that on the sides of your vehicles to make a statement to customers about your investment in the environment.”

Keep an Open Mind
Whether you lean toward ownership or leasing, keep an open mind, Doman advised. “Don’t look at things the way you’ve always done them. There’s a lot of flexibility involved in all the different types of leases available. And look at certain segments of your fleet and explore where it might make sense to put your toe in the water if [leasing] is something you haven’t done before.”


Dig Deeper
To learn more about vehicle leasing, visit these resources:
• “Lease a Truck – Pros and Cons” from
• Equipment Leasing and Finance Association:
• Automotive Fleet & Leasing Association:

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