As a fleet manager, keeping fleet costs low and reasonable is one of your primary objectives. Unfortunately, this is often easier said than done. If you’re like most in your shoes right now, you’re desperately searching for ways to reduce costs in an inflationary supply chain. First of all, compare fuel cards and find the best one according to your needs. After that, follow the four ways given below.
4 Ways to Reduce Fleet Management Costs
Nothing sinks your department faster than high fleet management costs. And if you aren’t careful, inflated costs can sink your career too. You’re ultimately the one responsible for improving ROI in this area of the business. It’s time to stop making excuses and start doing something about it.
Here are several helpful tips:
1. Get Rid of Unnecessary Vehicles
One of the first things to consider is whether you can get rid of any unnecessary vehicles. Cutting your fleet size down can save you thousands of dollars per vehicle per year. In fact, it’s not uncommon to expect savings in the range of $5,000 to $8,000 annually per vehicle. If you remove 25 vehicles, that amounts to $125,000 to $200,000 per year in savings (or $10,000 to $17,000 per month).
Not sure how you can eliminate vehicles? See if some routes can be doubled up. Or perhaps drivers can share a vehicle. Are there morning and afternoon shifts that can use the same vehicle?
Reducing the number of vehicles in your fleet obviously means the remaining ones must take on more mileage. Having said that, the extra usage of operating these vehicles will not come close to surpassing the savings you get. The overall cost of ownership will be lower.
2. Implement a Warranty Tracking System
Warranty tracking is one of those things you know you need to do better with, but it hasn’t always been the easiest process. Thankfully, there are now streamlined solutions that automate most of the time-consuming, mundane aspects of tracking vehicle and part warranties.
Using a solution like Cetaris, you can digitize warranty tracking. This helps you report on missed warranties, track failure patterns, stay on top of chronic repairs that occur outside of warranties and even measure the value of your warranties over time to know which ones are justified.
3. Reduce Mileage
Get serious about reducing mileage as well. This might seem like an intimidating task – particularly if you’re trying to crack down on personal use of company vehicles when it’s become a standard over the years – but it’s something that must be done. GPS-enabled tracking systems can really help with this.
UPS, the delivery company, is a great example of a fleet that’s hyper-focused on reducing mileage and improving efficiency. Over the years, they’ve been able to reduce each route by an average of six to eight miles (which adds up when you have thousands of trucks operating each day).
“The company’s trucks rarely make left turns,” Reading Truck explains. “Spending too many hours waiting at a left-turn signal wastes fuel over the years. By making only right turns, the company’s trucks cut idling time, save millions of gallons of fuel across the fleet and reduce emissions.”
What can you learn from UPS? Whether it’s optimizing routes to avoid left turns or being smarter about combining routes, there are plenty of creative solutions.
4. Improve Preventive Maintenance
It’s going to sound like we’re beating a dead horse here, but we can’t write an article about reducing fleet management costs without discussing preventive maintenance. Even the smallest details matter here. For example, switching all vehicles over to synthetic oils and changing 1,000 miles sooner than is recommended.
And when it comes to tires, regulating the right pressure and verifying before each trip can improve fuel mileage and prevent excessive wear and tear on the vehicle. The more serious you are about preventive maintenance, the fewer long-term repercussions you’ll face.
Adding it All Up
Imagine what your team would think if you were able to reduce your fleet management costs by 10 to 15 percent? You’d probably be the employee of the year. Not only that, but you might find yourself getting a raise and a promotion.
Thankfully, doing so isn’t as difficult as you may have thought. As this article shows, sometimes the simplest tweaks and improvements can generate the biggest results.