2022 OUTLOOK

Written By: Brendan P. Keegan, President, CEO & Chairperson

The fleet industry, like many other industries hit with supply chain shortages, experienced a year unlike anything in history. The natural approach would be to stay careful and conservative, letting the fear of the unknown slow you down. At Merchants, we took this as an opportunity to use our 60 years of experience, turning obstacles into success stories for us and our clients. What matters the most, no matter what we face, is delivering our unmatched quality of service with our trademark flexibility and innovation. If you’ve been with us a while, you’ll know this is just how Merchants Fleet operates.

Merchants continues to EXCEL for our clients in what we could only call the “new normal” of today. We work tirelessly to secure necessary funding for growth, develop the tools clients need to succeed, and provide a client experience that will Keep America Moving. Some fleet companies consolidated last year, becoming even larger… but they are nowhere near as NIMBLE as Merchants. This is why we didn’t just meet expectations, we SHATTERED them in 2021.

2021 – ACCELER8…Faster

Saying that Merchants accelerated faster than ever in 2021 is an understatement. Here are some of the proofpoints from 2021:

  • Merchants exceeded 160,000 managed units for our clients.
  • 6 record-setting financial quarters in a row made us feel Groundhog Day level déjà vu.
  • We had $526 Million of New Funding, New Banks & Term Debt Investors & ACCELER8ting growth.
  • More than 49,000 vehicles were ordered despite OEM cancellations.
  • 18,000 drivers delivered packages in Merchants vehicles for the 2021 peak season.

Merchants continued moving towards our fleet electrification goals by making BIG and BOLD EV commitments. We also took our ACCELER8 ESG program GLOBAL.

  • We made a $2.5 billion commitment to EVs and became BrightDrops first FMC customer with orders for 12,600 EV600 and 5,400 EV410 models, and ordered EV step vans from Xos, Inc., among others, reserving nearly 40,000 vehicles overall.
  • Merchants became a sponsor of the McLaren Racing Extreme E team. These races promote gender equality by having both a male and female driver, and all race locations raise awareness for climate change.
  • 50 of our senior leaders were trained in Sustainable Business Strategy at Harvard Business School.
  • Merchants was named a 2021 Diversity & Inclusion Rising Champion by the University of New Hampshire.
  • We launched an industry-first Fleet Electrification Hub to help our clients reap the benefits of electric vehicle technology.

Ordering new vehicles was a challenge across the entire industry so our teams developed outside-the-box solutions to assist with inventory setbacks.

  • New short-term leases include maintenance and can be delivered nationwide, no visit to the rental counter needed.
  • Own-to-Lease lets companies sell vehicles to Merchants and lease them back, putting cash-in-hand fast while our clients are still able to generate revenue.
  • ReadyFleet offers near-new and pre-owned vehicles for immediate use.
  • Our nationwide Mobility Pool List includes short-term rentals available immediately,
  • Our Last Mile Delivery Program allows short-term leasing and fast vehicle access to help companies launch or scale up delivery services.
  • Finally, we expanded our FlexRent offerings with additional vehicle types.

Events & trade shows came back in full force! It was great to get back on the road and connect with friends, clients, and colleagues again in person.

  • We attended 31 different events in 2021, and our subject matter experts, including myself, presented at AFLA, Route Consultants, Home Delivery World and NAFA.
  • Fleet Summit returned and was AMAZING. We proudly unveiled the BrightDrop EV600 at its first-ever fleet event, attendees could go on EV test drives, and every guest in attendance was made CARBON NEUTRAL for a year
  • I had a virtual presence as an expert speaker at Reuters Events Energy Transition North America, Forth Roadmap, and the London EV Show.

2021 is the year that everyone at Merchants stepped up big time to show our clients, and the world, why this 60-year-old company is a force to be reckoned with!

2022 – ACCELER8…Responsibly 

This year we’re not only aiming to continue being the fastest growing FMC in North America… we plan to do it responsibly, too. Taking a page out of the Extreme E playbook, we want to improve the ESG of as many fleets as we can. Everything we have accomplished in 2021, including our $2.5 BILLION commitment to electric vehicles and joining the Corporate Electric Vehicle Alliance, has put us on track to ACCELER8 Responsibly in 2022.

CLIENT EXPERIENCE

Burger King came out with their “Have it Your Way” slogan in the 1970s. Not everyone is going to be a fan of their Whopper, but what matters is getting an exceptional experience, finding the right sandwich for you, and feeling valued as a client. Merchants helps our clients THINK OUTSIDE THE FLEET BOX, and the amazing minds of our leadership team have been hard-at-work making our programs even better for 2022.

I’m going to talk again about our next evolution, our plan to electrify the fleet industry. We’re going to give the option to “try before you buy” by offering new EV Rent-to-Lease opportunities. I get it, new or unfamiliar technology can be intimidating, and this just lowers the risk for anyone thinking about adopting EVs into their fleet. We want every one of our clients to get this easy ESG win and lower their maintenance costs.

One of the most critical aspects of transitioning to EVs is getting your charging infrastructure in place. Merchants knows that one size does NOT fit all, so we will be rolling out multiple infrastructure financing options this year. Whether you’re looking for the depot and home level, public charging, or reporting reimbursement programs, Merchants will have a solution for you. The goal is for our early adopters to have a seamless experience.

I’m so proud of TotalConnect, our connected vehicle platform that also integrates vehicle data from telematics devices. This year it will receive upgrades and new integrations like enhanced geofencing, energy reimbursement, EVSE payments, and more. It just keeps getting better and better, the same way AOL revolutionized internet access with an all-in-one dashboard for so many families in the 1990s.

How can we make our rental offerings better? By EXPANDING our vehicle selection from Class 1 to 8 (tractor trailers). This makes Merchants a full vertical provider that can tackle the Middle Mile, allowing us to better serve our enterprise level clients in 2022. And for those needing a vehicle sharing option, FleetShare is a unique, closed-circuit offering we developed to help clients save money through vehicle sharing and inventory pool management. It has already proven to be very popular among our Last-Mile clients.

EMPLOYEE ENGAGEMENT

Every CEO wants to say that their company is a great place to work. I don’t need to do that since our employees say it for me! Merchants is Great Place to Work Certified; a Chicago’s Best and Brightest Company to Work For; one of Business NH Magazine’s Top 100 Private Companies; and a Best Company to Work For. As we continue to evaluate what our offices will look like in 2022, our leadership team continues to keep our employees safe and our culture thriving with special virtual-only events. No matter where our employees work, we want them to enjoy the truly amazing Merchants comradery.

Some of you might know… 2022 is a very important year for us at Merchants. It’s our 60th anniversary. We’re celebrating with a special logo, website updates, #MerchantsMonday on social platforms with historical tidbits and photos, and special events in the spring and summer. Our founder, Irving Singer, had an incredible story and was one of the things that drew me here originally as a client.

We’re also going to continue expanding our ACCELER8 ESG initiative with an upcoming Diversity in Fleet Symposium, to help level the playing field for men and women in the fleet industry. Our HR team will be launching an Ambassadors & Allies Program to help educate employees about diversity and inclusion, who can then share their knowledge with our entire organization.

2022 marks the debut year of Merchants Prime, our new rewards program that doesn’t have anything to do with Transformers, although who wouldn’t love to see a BrightDrop EV600 turn into a robot. Employees can earn points through CELEBR8, birthdays, milestones, wellness programs, preventative screenings, and more! Points can be spent on Amazon, experiences, hotels, events, and at the Merchants company store.

An important goal at Merchants is to keep employees happy, motivated, and safe. Our HR department is doing an incredible job on all three of these, and I can’t wait to join in on the anniversary celebrations and events throughout the year.

TECHNOLOGY ENABLEMENT

It doesn’t matter how good your product is or how loyal your employees are, if your service is difficult to use and your UI is cumbersome, you’re going to lose business. Every aspect of Merchants is impacted by technology, our focus is to continue improvements to help our clients scale, grow, and enjoy an unmatched experience with our services and programs. Our three-year roadmap puts emphasis on ESG and ELECTRIFICATION to reach our 2025 and 2030 goals, but FleetTech programs across the board will see significant enhancements and upgrades.

This starts by having A LOT of tech development in the pipeline. New Strategic Consulting Tools are being created to assist clients with TCO, Remarketing Scenarios, and their Fleet Scorecards. We’re expanding connected vehicle support over the next two years (making TotalConnect an even STRONGER platform for our clients). These are setting the groundwork for Advanced Analytics and improved Order Management in the future.

Our TotalView platform is an essential tool for fleet managers, and we are investing resources to provide an updated user experience with further enhancements and support over the next few years.  We don’t just want our programs to exceed the industry average, we want them to become the industry STANDARD.

Behind the scenes we are making quality of life and security improvements that will enhance the day-to-day operations of our clients that use our software platforms and FleetTech programs. From scalable back-end systems and credit automation to improvements in invoice processing and customer billing, the experience is only to GET BETTER AND BETTER.

OPERATIONAL SCALE

Every great business knows it needs to continue to innovate, and if Merchants isn’t finding a way to be BETTER, FASTER, or MORE EFFICENT, we’re not doing everything we can for our clients. We plan on ENHANCING the client experience through scalable processes across every division, including a three-pillar approach featuring Operations, Remarketing, and Auto.

Operations will be improving SPEED with faster delivery and condition reporting for clients who leverage Mobility services. This will touch every aspect, including Remarketing, Acquisitions, Onboarding, and so much more. A great example is our offboarding process, that is estimated to improve in speed by 60% in 2022! We will also be targeting ESG goals by getting orders for the EV models our clients want.

Clients looking to find a silver lining in today’s tough times of vehicle acquisition can expect further improvements to our Remarketing programs. GuaranteeBuy will become even easier to use, while decreasing cycle time for our clients. This program is by far the best and fastest way to turn your underutilized vehicles into cash. For the foreseeable future vehicles are not depreciating assets, and you could say that Remarketing has become more like asset management for our clients.

Merchants Auto, our national remarketing engine, will be launching a pilot program for clients to upfit and tailor their pre-owned vehicles to their business needs, rolling costs into the monthly payment. Growing our pre-owned network of vehicles through fleet Remarketing efforts allows us to provide vehicles QUICKLY to clients that need them fast.  Our technicians will be taking enhanced EV/Hybrid Training and getting ASE L3 Certification to service electric vehicles as they become more commonplace.

THE VIEW AHEAD

This year, our goal is to ACCELER8…Responsibly within every aspect of Merchants. 60 years of business is an incredible milestone, and we’re going to show everyone how a company can still disrupt their industry after six decades of doing business. We’ll do this in part with our ESG focus, and we have the talent, technology, and tenacity to not just electrify, but REVOLUTIONIZE the fleet industry. As we look forward to the road ahead, we will always stay true to our founder’s ethos of putting clients first. Welcome to the new year; we wish all of our clients, partners, employees, colleagues, and friends a safe, healthy, and prosperous 2022.

Enjoy the JOURNEY!

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