Have you, or are you planning on taking on a new role in fleet management? Perhaps you are one of the lucky ones of 2020 and have found a new job or have been promoted. Or, maybe you own your own business and are trying to figure out your own fleet management. Either way, one thing is for sure: you are going to be looking for all the ways possible to keep the costs of fleet management down while making sure your drivers and the public are kept safe and that the productivity and efficiency are not affected.
In this post, we will look at what fleet management is and what you can do to keep the costs down without impacting quality and safety.
WHAT IS FLEET MANAGEMENT?
Fleet management is the management of commercial vehicles and assets. It generally refers to the processes and operations that are involved in running a fleet of vehicles, whether that be executive company cars or trucks. Those in charge of fleet management have multiple things to oversee: the tracking of vehicles, asset utilization, vehicle maintenance, dispatch, management of drivers, driver safety, compliance with regulations and the control of costs.
HOW CAN YOU REDUCE THE COSTS OF RUNNING A FLEET?
As with all aspects of business, keeping costs as low as possible is vital. However, when it comes to vehicles on public roads, safety has to be of paramount importance, with efficiency and productivity being a very close second. Striking a balance between these can be a challenge, but here are some ways that a fleet manager can reduce fleet costs.
REDUCE THE SIZE OF THE FLEET
Reducing the number of vehicles in any given fleet is the most proven way to reduce overall costs. It is quite obvious. Look at the vehicles you have and consider how necessary they are. Removing these vehicles from your fleet will eliminate all of the fixed costs, but it does put additional pressure on the remaining fleet. This will increase the operating costs a little. but as long as you are still able to deliver the same service safely, the net decrease in overall fleet operation costs should be worth it.
CONSIDER THE MAINTENANCE COSTS
All too often, fleet managers stick to preventative maintenance routines and schedules because they think it is necessary. In many cases, they are outdated. Of course, you should keep up with any legal maintenance and service schedules, but talk to your maintenance providers to see whether you can stretch out the time intervals between preventative maintenance practises a little further.
If – when – something does go wrong with your vehicles, rather than second-guess what the issue is and spend time and money fixing things that may not be causing the problem, go straight in for truck diagnostics. The faster and more accurately you can get to the bottom of an issue, the faster you can get it repaired and back on the road.
This is one of the harder areas to control but there can be changes and cuts made if you are careful. If you allow employees to take work vehicles home, have a personal-use policy in place to avoid them being used unnecessarily for personal journeys. Even if they pay for the fuel costs out of their own pocket, the wear and tear on the vehicle and the increased mileage will decrease the resale value.
You also need to work with other departments in the company and utilize business reports to plan journeys carefully to avoid back and forth drives as much as possible. You could also look at whether the business needs to be undertaking face to face transactions at the moment – can meetings be held virtually rather than travelling for miles?
In addition to this, GPS can also be used to plan the most cost-effective journey and provide alternative routes when needed. Mileage auditing is something else that you could implement – it discourages drivers from using the vehicle when it is not needed.
REDUCE YOUR ACQUISITION COSTS
The cost of acquiring vehicles is usually the most significant cost of operating a fleet, and most organizations either lease or buy their vehicles.
Buying vehicles simply means a huge initial outlay of capital. This can mean using funds that could be better spent elsewhere, particularly in the early stages of establishing your company or securing some kind of loan to cover the costs.If you make a decision to buy your vehicles entirely, you should revisit this process on a regular basis to ensure that it is the best use of business funds. The vehicles you own are a depreciating asset, losing value as soon as they leave the forecourt, and are prone to fluctuating values.
If vehicle ownership is not central to your organization, you may want to consider leasing as an alternative. Many fleet leasing options offer some substantial savings on multiple vehicles. There has been a major shift towards this form of vehicle procurement, because it is much easier to budget and allows you access to a newer and wider range of vehicles than you would have if you bought fleet vehicles outright.
ENCOURAGE FUEL EFFICIENT DRIVING
It will cost you in the short term, as you may need to pay for extra training, but in the longer term, if your workers take it on board, it will save you a substantial amount of money. In fact, it is thought that you could save up to 15% by motivating workers to improve their driving habits. Some of these include:
- Understanding how to use gears efficiently
- Reducing speed where possible
- Ensuring tires are inflated to the correct pressure
- Turning off the air conditioning
- Taking out any unnecessary weight
- Switch off the engine in stationary traffic
- Anticipate road conditions as far ahead as possible
- Earlier braking
By its very nature, fleet management is always going to be expensive, but by putting some of these tips into practice, you may be able to find some savings to plough back into other areas of the business.
Photo Credit: Ford