This concise guide outlines several fleet management strategies that will save money on your business vehicle expenses and cost.
If your company has a fleet, you likely know operating it can be expensive. Unless you keep careful track of how much you are spending where, you won’t understand the best ways for you to save.
Fleet management strategies to save money
Areas where costs can be saved differ depending on the company and its needs. However, there are a few places you can start.
Automated fleet management
Even if the classic Excel spreadsheet may have served you well in recent years, you should keep your hands off the organization and structuring of your fleet management if possible. Although the program can be used in many ways, it is ultimately only a spreadsheet program. For the ever-increasing number of data, such as consumption values, vehicle information or personal data, this means above all confusion, dubious transparency, susceptibility to errors and great effort. This, in turn, can lead to costly wrong decisions.
Automated database systems are therefore more recommended. Driver data only needs to be created once and topics such as driver’s license control and driver instruction can thus be covered in one system. Appointment organization, reminders, etc. also work automatically. With telematics systems in the vehicle, you can even directly access the consumption values.
If you choose external fleet management service providers, you should always pay attention to the security standards. Especially when it comes to sensitive personal data, data protection and data security should be a top priority. Providers certified by an independent testing company bring you security. In addition, make sure that the fleet management solutions chosen are legally secure, otherwise there may be nasty surprises, such as high fines or imprisonment, in the event of liability.
Tracking for fleet management efficiency
It’s a good idea to look into GPS tracking of vehicles as well. That way, you can determine which routes are most effective at what times of the day. GPS allows you to benefit from tracking your fleet with real-time data, saving you money. Once you have historical reports, you can compare them to find areas where your drivers can do better.
Saving on tires with simple adjustment
Look at the pressure of your tires, since this can affect how fuel-efficient they are. If they are below the recommended limit, they will use more fuel, and that difference can add up quickly. Instead, try to maintain the recommended tire pressure. The temperature can play a role in this as well. When it’s cold, you’ll want to have your employees check the pressure each day, since this causes the pressure to drop.
Tire care is just one great example of how to maintain a car so it lasts longer, which ultimately saves you money. They should also log the number each day so you can see if certain tires tend to lose pressure faster. You may want to look into retreading the tires instead of getting new ones. This allows you to get more mileage out of each set, and the process is cheaper than purchasing an entirely new set. It’s a safe and effective way to save some money.
Selling unused vehicles
By cutting the size of your fleet, you can often save thousands of dollars each year. Even if you currently use all of them, look for ways to combine trips or tasks so you can do without a couple. Are there routes you can double up? Perhaps drivers on slightly different shifts could use the same one. You might need to change around the timing of some shifts to make this work. Of course, your other vehicles will travel a greater distance if you sell some of the current ones. That could increase the operating costs, but that doesn’t mean you won’t save anything.
Reducing your mileage can allow you to do without one or more vehicles. And of course, it can save money on fuel and wear and tear. Encourage your drivers to combine various trips. When vehicles make multiple stops, it’s a good idea to aim for as much efficiency as possible. For example, you might invest in a navigation system that will improve routes for reduced mileage.
You could also look for routes that do not require as many left turns. That’s because trucks often wait longer at left-turn signals than when going right, and that uses more fuel. Making more right turns allows for higher fuel efficiency since there is not as much idling time. Plus, it’s better for the environment since it can result in lower emissions.
Better procurement strategy
When it comes to cost efficiency in fleet management, it is crucial to choose the right strategy when purchasing your fleet. If you have opted for vehicle leasing, you can choose between the single sourcing or multi-sourcing principle, for example.
In single sourcing, you only use one source of procurement – i.e. a supplier for your products. The goal is to create a long-term and close relationship between you and your supplier. The time and cost savings can lie here above all in logistical and process-oriented coordination. In this strategy, fleet management usually work with only a single framework contract and a contact person for all procurement topics in the fleet.
This makes it possible to achieve an advantage through special discounts or conditions, especially when negotiating for the first time. A long-term relationship also usually speaks for high and consistent quality. Disadvantages for fleet management costs result above all from the possibly more expensive prices as well as the high dependence of one external partner.
With multi-sourcing, as the name suggests, you choose several suppliers or service providers and compare them with each other. This certainly usually allows you the best prices for the products to be purchased. However, more suppliers and service providers also mean a higher fleet management coordination effort, as you have to manage several contracts and have different contact persons for each topic.
In addition, it becomes more difficult to achieve consistent quality for all suppliers. However, third parties are usually “experts in their field”, so that you can relieve the submission of certain topics to external service providers, especially if you have little or no experience in the fleet management field so far. Procurement or purchasing for fleet management is therefore of particular importance.