Cost saving initiatives for your fleetFinance
An important part of your fleet management role is to find ways to lower fleet costs. Maintaining a fleet can be a significant company expense, but one that has direct ties to profitability. You need to ensure that any cost-saving initiatives you introduce have a minimal impact on profitability or the company’s ability to deliver to their customers.
Here are some of the top cost-saving initiatives we recommend considering.
1. Monitoring vehicle use
You can’t find ways to reduce costs if you don’t have the full picture of exactly where those costs accumulate. You need visibility across your entire fleet of how often vehicles are used, the routes they’re taking, and how drivers are using vehicles as part of their roles.
The simplest and most effective way to gather this information is through telematics – technology that allows you to monitor a wide range of information from your vehicles in real time, from the routes they’re using and engine diagnostics to mileage covered and even driver behaviour.
There will be a cost outlay in installing a telematics system. You’ll also need to create a business case for telematics, which should:
- Outline key objectives – how will telematics help you to reach business objectives?
- Define the ROI of the system – how will you measure cost savings across your fleet?
- Choose the right system – is an app-based system, a vehicle hardware system, or an on-board diagnostic system better for your needs?
- Create an implementation plan – including onboarding drivers and gaining driver buy-in.
- Access support – including fleet partners who can help.
Once you’ve installed your telematics system, you can use it to:
- Optimise vehicle use: Explore potential cost-savings by having drivers share vehicles on certain routes or use public transport options.
- Tighten eligibility policies: Does everyone who currently uses a fleet vehicle really need one? Could the fleet be downsized through more efficient vehicle use? (You need to be careful when considering downsizing a fleet, as without introducing efficiencies this could cause a drop in productivity and profitability).
- Identify uneconomical driving practices: Improving route-finding software can help improve efficiency, as can better driver training. Fleets that use route-planning software with telematics see an average 13% increase in the amount of sales meetings/stops a vehicle can make in a day.
- Identify unsafe driving practices: Monitoring different factors that relate to driving – such as time on the road, speed, acceleration, cornering, driver eye movements – can reduce accident costs by up to 25%.
- Schedule improvements: Finding ways to schedule vehicle use to optimise efficiency.
- Optimal vehicle replacement: Learning more about engine diagnostics can help you refine optimal vehicle replacement timeframes.
These are only a few examples of the potential cost-saving initiatives you can implement thanks to a telematics system.
2. Consider integrated telematics
Telematics systems can also be integrated with current company systems, including your CRM. These can create additional savings.
For one thing, if your team is using different software for each task, you’ll be accumulating admin inefficiencies through double-entry. This can also lead to mistakes as human error means data in one system may not match another and people may not receive the data they need when they need it.
By integrating systems, each component can talk to the other, data can be pulled through from one system to the next without human interference, and your team can be assured that they always have up-to-date and accurate information. This can save you hours of admin, driver, and dispatcher time.
Telematics can be successfully integrated into:
- CRM systems: to log events such as a driver entering or leaving a location.
- Billing systems: for companies charging a different price depending on distance or area travelled.
- Transport operation software: for vehicle location and driver data in real time from within your system.
- Website/app integration: for customer-facing GPS data.
- Other systems as required.
3. Other potential cost-saving initiatives
When managing a fleet, even small savings can add up. Here are some things you can do to bring about savings over the short- or long-term:
- Negotiate with vendors for service contracts to make sure you have the most competitive price.
- Choose replacement vehicles wisely, taking into account improving fuel efficiency and perhaps switching to electric to improve savings.
- Lowering crash costs with improved driver education.
- Assess overhead costs – including management and administration, buildings and facilities, tools, taxes, and other factors to make sure you’re using these resources effectively.
- Build initiatives to Improve number of sales of ex-fleet vehicles to employees (thus saving in auction, admin fees and obtaining faster sales).
Telematics can do so much more than simply help reduce costs. By gaining visibility over the entire fleet, you’ll be able to observe trends over time and continue to improve safety, efficiency, and affordability of your fleet. While some quick wins can be made by renegotiating service contracts, etc, it’s the data-driven sustainable initiatives that will ensure the longevity of the fleet.