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Have Fleet Budgets Grown? - Copy

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Even while the United States economy continues its slow but steady resurgence, it doesn’t mean that fleets are getting a piece of the action.

The recession of the late-2000s created a logjam of services and developments for public agencies to consider. And because of this, fleet budgets often aren’t the main concern.

Last November, Government Fleet conducted a survey to see how fleet budgets are proceeding for 2014.

Using a current financial data, the survey found that 60 percent of fleet budgets are back up to or exceed their budgets from five years ago. The report also found that a large portion of fleet managers said they finally have the ability to purchase vehicles after pushing back replacements, and some are increasing their fleet budget and size due to added services or increased population. So while not every fleet is in a dismal financial position, the fleets that are report they feel exasperated.

Salary Increases Influence Personnel Budgets

A higher number of personnel budgets have increased (42 percent) than decreased (18 percent), but 40 percent of respondents said their personnel budgets have remained unchanged.

The report found the foremost reasons for personnel budget increases were raises for employee and increased cost of benefits. Fleets with internal service funds said they would recuperate the costs by raising their labor rates. Many reported their personnel budgets merely increased enough to encompass employee salaries and benefits, others said they now have the ability to focus on training programs with increased budgets.

One of the most common reasons for a reduction in personnel costs was the retirement of higher-¬paid workers and the hiring of new employees at lower salaries or reduced benefits. Other consequences from the reduced or unchanged budgets are that fleets aren’t filling their unfilled positions.

Increasing Operating Budgets Affecting Fleets

The survey showed that more fleets said their operating budgets increased (42 percent) than decreased (20 percent).

The central reason of the increase in operating costs was the rising cost of doing business. This “cost of doing business” comprises of items such as inflation, price increases for parts, tires and equipment, and general services.

For fleets that reported a decrease in their operating budget, the biggest factors were lower fuel cost and better efficiencies in preventive maintenance.

Others mentioned an absence in funding from agencies to their fleet departments. Fleets are combating reduced operational budgets by limiting external maintenance undertakings, attempting to reduce miles driven by employees and reducing parts and supply inventory.

Respondents who saw no change in their operating budgets still needed to undergo variations in their operations. This involved forgoing some repairs, renting some specialized equipment and amplifying their efforts to promote the use of shared equipment.

Need for Creativity

There are plenty of methods that fleets can use to lessen the cost of capital purchases, reduce fleet operational or overhead costs, or shrink costs for their customers.

It’s up to fleet managers to concoct innovative concepts that will help obtain the funding they need, offset fleet operation costs, and keep all of their personnel happy and employed.
 

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