Businesses must constantly find new and innovative ways to trim operating costs without sacrificing quality, and fleets are no exception.
Whether it’s a short-term fix or a long-term savings plan is the goal, fleet managers can use a wide range of ideas to increase production at a lower cost.
Top Methods to Lowering Fleet Operating Costs
Fleet companies need to manage people, vehicles, services and a seemingly endless list of other items. But how can a fleet manager understand where money is being wasted if these items aren’t being watched?
Many of the items on this list are analytics based, which is why it is important to use the data you already have to your advantage. The key is to not get caught in a pit of data that you can’t even process. Identify areas where you believe there is room for improvement and see how they perform. Keep a short- and long-term eye on these and also add new areas to analyze as well.
A fuel policy could develop into a long-term project, but there are some steps that should deliver immediate savings.
Because drivers either have company cards or are reimbursed for fuel expenses, the need to find a cheaper gas station is often not a top priority. Training drivers on the importance of fuel spend can go a long way in reducing these costs. Larger companies would even benefit from employing a fuel analyst who would be able to find more in-depth ways to save money for their business.
Having a large fleet means that there will always be a vehicle that needs to be taken in for routine maintenance. However, these costs can add up quickly if they aren’t properly monitored. Even if the costs are being managed by a fleet management or leasing company, you still need to be sure that you are getting best value.
Taking a vehicle to an independent garage could cost far less in labor charges than a franchised dealer. Still, it is always worth checking that what you get for your money and whether parts prices match these savings.
Bulk Purchases on Fleet Vehicles
Talk to vehicle manufacturers about the types of discounts they would be willing to give you and promote the exclusivity that you would be giving back to them.
After obtaining the best manufacturer markdown, discuss any other add-ons that your supplying dealer may be able to add. Then take the deal to the contract hire companies for the final saving on the actual lease rate. Fleets can successfully save large with this three-way discount.
Time is money, so it makes sense that something that saves time would also effectively save your fleet money.
The use of fleet software is only as good as the data you put into it, but it can transform your understanding of the entire fleet, identify potential savings instantaneously, and even allow you to focus on exception supervision rather than unforeseen crisis management.
When one of your drivers or employees needs to meet with a client, it is difficult to argue. But understanding the amount of miles that the company is covering and why, can offer valuable insight into how a company is performing.
If you consistently educate managers from the different departments to ask whether mileage is necessary and show them the prospective time benefits of not spending hours on the road every day, the business can benefit in the long run.
Lifetime Cost of Vehicles
The answer for how much each vehicle in the fleet costs is usually based on the list price or leasing rate. Yet, other factors like fuel economy, mileage, service, maintenance, repair, damage and taxation drastically alter the final costs for the lifetime of the vehicle.
So when you include all of the relevant factors that affect a vehicle’s true cost of ownership, a bargain vehicle can quickly morph into a burden.
Reducing Accident Rates
Risk management is a constant challenge, but a fresh perspective and new strategies can mean the world for a fleet company. Managers giving the same money-saving message of low accidents can fall on deaf ears, especially in a growing business.
The impact on the bottom line can be dramatic for any company. Dodging one serious accident could very well pay for the company’s entire risk management efforts in one fail swoop.
Professional training is the groundwork of a cost-effective fleet. Managers who are constantly learning and developing new ideas help not only the operating costs of the fleet, but also encourage a culture of new thinking for everyone in the company.
In addition, fleet managers will benefit from networking and sharing ideas with others from the industry.
Tax Breaks for Vehicles
Every fleet could benefit from a few more tax breaks. And a tax-efficient fleet is a cost-effective fleet, which is why fleet policy and government policy should be closely aligned in any manager’s overall strategy.