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As technology continues to transform the commercial truck market, Daimler’s Richard Howard sees a similar evolution underway on the financial services side of the industry.
Howard, who in May became president of the new Daimler Truck Financial Services USA business unit, said data and digitization are enabling new forms of truck financing, leasing and insurance that can be tailored to meet the needs customer specific.
This trend will only accelerate with the expansion of connected vehicle technology and the emergence of zero-emission trucks and autonomous driving, all of which will have “a big influence on the financial services of the future,” Howard said. at a conference on January 20. interview with Transport Topics.
Prior to assuming his current role, Howard led sales and marketing operations at Daimler Truck North America, which manufactures Freightliner and Western Star trucks and Detroit engines. Now he is applying that “unique and truly valuable experience” from his seven years at DTNA to his new position as he guides the development of new financial products and services to support these brands.
In the past, the hardware and service aspects of the truck business were very distinct, but now the line between those businesses is “blurred”, he said.
After undergoing a restructuring process to align with Daimler Truck’s split from Mercedes-Benz last year, DTFS is now focused on product innovation while working with DTNA “to bring the services of the future to the market,” Howard said.
An early example is DTNA’s dynamic rental offering, which uses data from connected vehicles to match customer rental payments to billable miles. This usage-based financing option, first introduced at the 2019 North American Commercial Vehicle Show, uses information collected by the Detroit Connect telematics platform embedded in the company’s trucks.
“This is a great example of using 24/7 connectivity to generate variable lease payment based on truck usage,” Howard said.
This dynamic lease option can provide benefits to large and small fleet customers while giving them more options beyond the standard 48-month lease, he said.
“We are moving away from standard profiles to more dynamic profiles, not only in terms of lease structure, but also payouts,” Howard said.
Financial services are also supporting the deployment of battery electric trucks.
DTFS has dedicated staff working with Daimler Truck’s eConsulting team, helping fleets navigate the complexities of deploying electric trucks and installing the charging stations needed to operate them.
READ MORE: DTNA launches EV advisory services and chargers
“We will play a key role going forward on both fronts: electric truck financing, but also a role in terms of infrastructure financing for our customers and dealers,” Howard said.
Financial services such as data-driven insurance and dynamic leasing will also help enable the adoption of self-driving truck technologies in the future, he added.
The trucking insurance market is another area where data and technology could ease an industry pain point. Howard said a data-driven approach to insurance could help fleets better manage rising insurance rates, which have become a significant headwind for motor carriers in recent years.
“Risk averaging, which is what many insurance companies do, tends to overstate the risk for the best clients and underestimate the risk for perhaps less well-profiled clients,” Howard said.
By contrast, measuring a fleet’s specific risk profile could provide the customer with the best price and service for the company’s application and business context, he added.
Howard said DTFS is working on “proof of concept” products today with its largest dealer groups and sees substantial opportunities to help the industry better manage insurance costs in the future.
Freightliner Photo Gallery
A Freightliner Cascadia Class 8 with SAE Level 2 automation. (Daimler SA)
To that end, DTFS is working with insurance startup High Definition Vehicle Insurance Group to bring connected insurance offerings to Daimler Truck customers. HDVI integrates vehicle telematics with insurance policies and helps fleets get better rates by coaching their drivers and taking steps to improve safety and mitigate risk.
Daimler Truck has invested in HDVI as part of its Series B funding round, the companies announced in August.
In the meantime, DTFS has been working to help customers facing new vehicle delivery delays as ongoing supply chain constraints continue to slow production of new trucks.
“We’re extending leases, extending financing, bringing customers closer through this period in every way we can,” Howard said. “We want our customers’ trucks to be running 24/7, so we’re totally open to all those needs.”
Beyond the current supply chain issues, Howard said Daimler Truck’s finance arm is well positioned to “innovate in ways we have never done before.”
“It’s a great time of change, a great time of opportunity,” he said.
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