How to unlock cost savings from your fleet
October 04, 2022
In an age of rising inflation, supply chain delays, and high fuel prices, keeping a lid on fixed and variable fleet costs, including operating expenses, is more important than ever.
Cost control is a fundamental pillar of effective fleet management. Rarely has this been more apparent than in the post-pandemic era, which has put added cost pressure on fleet budgets.
There are three critical levers to help you contain fleet costs:
- Be strategic when it comes to vehicle acquisition and resale
- Use available tools and technologies to influence driver behavior
- Ensure consistency when managing your vehicle operations
Vehicle acquisition and resale
- Stay flexible with model-year planning by leaning on vehicle manufacturers, while identifying backup options. Invest in each step of the purchasing process – including strategy, offerings, negotiations, ordering, analysis, and evaluation – to improve your results.
- Ensure you have right-sized your fleet by deploying the properly chosen and equipped vehicles for each job. This begins with analysis of vehicle specifications, so you can begin the acquisition cycle with accurate information.
- Continue to cycle out overdue vehicles and, when possible, take advantage of the strong resale market. It’s also important to develop a strategic plan for allocation changes coming out of production delays by vehicle manufacturers.
- Make data-driven decisions by using telematics to reduce fuel spend and increase driver safety. Vehicle tracking and in-cab video systems help organizations, especially field service businesses, reduce waste, fraud, and high legal fees caused by accidents.
- Coach drivers to seek out lower-priced fuel. Element Fleet Management’s Xcelerate mobile app includes a fuel-station locator so drivers can fill up where it costs less. Be sure to let drivers know they should use regular, rather than premium, fuel for pickups and vans (unless the manufacturer indicates premium). Lean on your fleet management program to help unusual spot purchasing trends to reduce misuse, slippage, and fraud.
- Reevaluate driver fuel purchasing parameters and personal use policies based on today’s market. Ensure your fleet policies are up-to-date, clearly communicated, and readily available to all drivers.
- Consider an artificial intelligence-powered solution to monitor exceptions and prevent fuel fraud. Element’s Fuel EKG goes beyond simple flagging and monitors fuel tank capacity for overfilling. It’s a good way to keep employees from filling up their personal vehicles during this period of high fuel prices.
- Accident management starts with prevention. Typically, there’s a small cohort of drivers in any fleet who are most responsible for accident-related costs. This group of riskier drivers can be identified with telematics and regular motor vehicle record (MVR) checks. Screening drivers for speeding and other violations off the job provides actionable information to prevent an accident in a company vehicle.
- Actively manage underutilized or surplus vehicles to avoid higher maintenance expenses. Consider redistributing low-mileage vehicles to other geographic areas. Above all, make sure these units remain in good working order.
- Use preventative maintenance (PM) as a first line of defense to control rising maintenance costs. By enforcing PM compliance, you’ll reduce downtime and unexpected maintenance costs. A well-maintained vehicle, with supporting documentation, will also bring a higher return at auction.
- Outsource toll management to avoid unnecessary fees. Parking and tolls are usually considered a fixed cost, because turnpike rates are known. But a toll provider helps fleets avoid administrative costs associated with missing transponders and other driver lapses.
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