To manage a fleet efficiently and make profits, fleet managers must be able to control the cost of running the fleet. Whether a fleet has 5 vehicles or 50, the fleet manager must account for asset costs, fuel cost, maintenance costs, etc. Costs that seem small can quickly add up and affect a company’s bottom line. Hence, here are a few tips to help manage fleet costs.
Differentiate Between Fixed and Variable Costs
Fleet costs can be categorized as fixed and variable costs. Fixed costs stay constant and are not affected by usage. These include taxes, loan payments and the cost of licenses and permits. On the other hand, variable costs depend on the way your fleet is used and the size of the fleet. Fuel, tolls, and maintenance are examples of variable costs. This is where a fleet manager can take measures to reduce costs. Thus, the first step to managing fleet costs is to differentiate between fixed and variable costs.
Track Fuel Consumption and Expenses
Fuel is one of the biggest variable costs for a fleet. The actual cost of fuel cannot be controlled by a fleet manager but there are still ways to reduce this expense. One of the ways to do this is by optimizing the routes taken by the fleet. A vehicle burns unnecessary fuels while waiting in traffic jams, when it takes the wrong route, etc. With online maps, it is easy today to identify congested junctions and reroute fleet movement to avoid them. Similarly, by validating addresses and routes before a vehicle starts its journey, you can reduce the risk of taking the wrong route.
There is also the risk of drivers stealing fuel. They may claim to have needed to take a very long route to get from A to B and hence high fuel consumption when the route took was actually much shorter. By installing GPS trackers on vehicles, this can be curbed to a large extent. This is because these trackers give fleet managers real-time information on the movement of all fleet vehicles.
Convert Reactive Maintenance to Preventive Maintenance
Having a vehicle breakdown leads to unplanned expenses and delays in delivery timelines. Thus, timely maintenance is essential for all fleets. Regular maintenance includes servicing, oil changes, etc. but most fleets do not look into part replacement until something goes wrong with the existing part. However, every part has a lifespan after which it will start giving trouble. Waiting till the trouble starts to make the change is not always the best idea. Telematic systems in vehicles can give fleet managers real-time information about a vehicle’s maintenance status and make predictions to the lifespan of different components. This allows managers to take preventive maintenance steps that help minimize a vehicle’s off-road time.
Encourage safe driving
Every vehicle needs insurance and but the premium to be paid is not always the same. When drivers follow road rules and drive within speed limits, the risk of accidents is greatly reduced. This, in turn, affects the insurance premiums to be paid. Thus, it is essential for every fleet manager to make drivers aware of road rules and to ensure that they are followed. This is where telematics can again play an important role. It not only gives the fleet driver the location of a vehicle but also gives information about the speed at which it is traveling. This helps fleet managers identify drivers who might need extra training on how to drive safely.
Maximize Asset Utilization
The total cost of managing a fleet is dependent on the number of vehicles the fleet has. Even vehicles that are not being used have to maintained and insured. Thus, they contribute to costs without making any contribution to productivity. Thus, it may be a good idea to sell underused vehicles and consolidate the fleet to lower operating costs. Similarly, replacing vehicles that underperform or are constantly facing maintenance issues can help reduce costs in the long run.
To Sum It Up
It takes time to optimize the balance between operational costs and productivity but with today’s tech tools, this is much easier to achieve. Telematic systems give fleet managers crucial information about the fuel consumption, routes, maintenance status, etc. to help control expenses and make their fleet more efficient. It’s time you took a closer look at how it could benefit your fleet.
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