Ways to Reduce Fleet Costs

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When it comes to fleet management, profits are the main objective. The best way to maximize profits is through a competent set of management strategies that can help you reduce fleet fuel costs and also take into account vehicle upkeep and fleet consolidation. The following steps are among the most effective ways to reduce fleet costs.

Consider the Entire Cost of Ownership of a Truck

When it comes to trucks, fleet companies will often make purchases based on the sales price of a given vehicle. This can be financially unwise in the long run because a truck that's inexpensive up front might be costlier to maintain than its higher priced counterparts. Therefore, it's crucial to consider not just the initial investment, but also how much the vehicle will cost to own and operate over the months and years ahead. Factors like gas, oil and maintenance are among the most important things to think about in this regard.

Encourage More Fuel Efficient Driving

With just a minor set of adjustments in the daily habits of all drivers, a fleet can boost its annual savings. Share tips with the entire fleet on how to drive more efficiently, starting with using the gears more wisely.

For starters, drivers shouldn't make speed the overall priority, since faster driving burns fuel more rapidly. Secondly, engine revs should be low as the vehicle accelerates. Moreover, drivers should sometimes skip gears when changing gear, such as going from second to fourth.

Monitor Tire Pressure Regularly

Tire maintenance is key to the efficiency and operability of fleets of all sizes. When tires get worn and ultimately fail, the consequences range from downtime to lost business. If the tires are at the wrong pressure, the vehicle is less safe for traveling because the tires are liable to wear down sooner and lead to increased fuel consumption. According to figures compiled by AutoTrader, under-inflated tires can lead to a 10% reduction in fuel economy.

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To maximize tire quality across an entire fleet, make sure tires are checked on a regular basis. Before a vehicle is taken on a lengthy trip, each tire should be given an inspection for pressure and quality. Make it a policy for all drivers to monitor their tires frequently, and issue pressure monitors for each vehicle to make the job easier across the fleet.

Reduce Air Conditioner Usage

Air conditioners burn considerable amounts of fuel when a truck runs at slow or moderate speeds. However, when a vehicle is driven at higher speeds with the AC running, the difference in fuel consumption is not as significant. Therefore, an air conditioner should only be used when a truck is driven at faster, highway speeds, but not along roads or boulevards.

While driving through towns, in cities and along back roads, keep the air conditioner off and instead open the windows during hotter days. Essentially, no driving below 35-40 mph warrants use of the AC.

Anticipate Driving Conditions From a Safe Distance

Trips can be a whole lot safer when drivers keep an eye out for road conditions ahead. As a driver, paying attention to the activity of vehicles several car lengths ahead can give you time to react and reduce the likelihood of an accident. If there's a stall up ahead, you'll have more time to slow down, come to a halt or simply change lanes and avoid the scenario if possible. Similarly, if there's a roadblock, collision or traffic jam, you'll have the amount of time that larger vehicles need to come to a halt.

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Be mindful of the habits of adjacent motorists. Is anyone going above or below the speed limit? Is anyone switching lanes, and doing so in an abrupt manner? If someone is driving hazardously, you can avoid potential problems by being attentive to the what is going on with the vehicles three or four spaces ahead. 

Monitor Fuel Savings

Pay attention to fuel consumption in your fleet and how it adds up on a weekly, monthly and annual basis. Managers should monitor the fuel consumption of each driver and compare it to the general fuel efficiency of the vehicle in question.

Create table documents that display the general fuel economy of each truck in the fleet, along with the average fuel consumption of the corresponding drivers. This documentation will help your company identify the drivers with the worst fuel efficiency and call them in for additional training.

Select the Right Fuel Card Provider

Before you choose a fuel card provider, make sure the service in question allows you to easily track expenditures online. Different types of fuel can vary in efficiency, and this should always be considered when selecting a provider. Even at small percentages, the savings can add up over the course of a year when an entire fleet is taken into account.

Refuel at the More Economical Locations

Fuel costs can vary between different locations, be it from town to town or across state lines. Sometimes, the cost can depend on how many competitors are within a given area. In places where options are hard to find, a fuel outlet might charge more.

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As a driver, it's best to fill up in the least expensive areas. Even if a tank is two-thirds or three-fourths full, top up before heading back onto lengthy highway stretches. That way, you're less liable to find yourself stopping to make emergency refuels during the final stretch of a trip.

Communicate Ideas for Lowering Costs

It's one thing to identify ways to make driving more fuel efficient for members of the fleet. It's another thing to communicate those concepts to everyone in the company.

As such, internal communications teams are important for large companies staffed with hundreds of employees. Fleet departments, for example, are an effective resource for communicating messages to all concerned parties. Your company should also have an online system that keeps everyone filled in on the latest information. The system should make the data accessible via laptops and password-protected smartphone apps.

Take Special Care of Van Fleets

The management of vans within a fleet is much the same as with all other vehicle types, but a few unique conditions apply. Since vans are capable of traveling a wider range of roads than larger trucks, software should be implemented to keep drivers abreast of routing alternatives while en route to destinations. That way, the likelihood of late arrivals and consequent penalties are reduced.

Further tips for van fleets include the following:

  • Choose smaller vans if suitable.
  • Use white vehicles with livery, as opposed to colors, since the latter can lower a vehicle's value.
  • Evaluate ancillary equipment and look around for less expensive options.

Hire an Accident Management Company

Downtime is bad for business. Not only does it hurt profits and cause administrative headaches, but it also has a negative impact on client relationships. According to recent figures, commercial vehicles have a 30 to 40% higher likelihood of accidents. Most distressingly, a large percentage of accidents happen in the light of day under normal weather conditions.

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To avoid the consequences of downtime as much as possible, hire a third party to handle accident management. Companies that specialize in this area are equipped to handle concerns such as personal injury claims and legal assistance, as well as vehicle recovery, repair and replacement.

Consider Petrol as a Diesel Alternative

Though it's often assumed that diesel is less expensive than petrol, this isn't always the case. A diesel vehicle can take several years before the fuel efficiency adds up to significant savings.

If a vehicle is being purchased for just a couple of years, and it's driven at low mileages that aren't expected to exceed 10,000 per year, a petrol vehicle could ultimately be more cost efficient. Furthermore, within a period of four years or less, the costs of servicing petrol and diesel trucks is roughly the same.

Make the Most of Daily Rentals

Consolidate the number of suppliers from whom your company leases trucks. This way, you'll get better rates and have an easier time keeping track of costs. Vehicles should only be rented on a daily basis when there is no other option. If there's any way to cut the number of days for which a vehicle needs to be rented, make those cuts. For example, if you're having a vehicle delivered for next-day use, consider whether it could be delivered instead on the morning of the day in question.

How large does the vehicle need to be? Make a list of the load size and the number of people that will be traveling in the vehicle at the same time. If a smaller vehicle would suffice, go with that option. Does the vehicle need to be delivered to your residence? Deliveries to homes come with higher rates than deliveries to businesses.

Prior to the end of a rental, vehicles must be refueled. Failure to do so before returning a vehicle to the leasing agency can up the rental cost by a third.

Reduce the Use of Grey Fleet Vehicles

According to figures compiled by Sewells Research & Insight, one third of trucking companies don't keep track of the mileage consumed by grey fleet vehicles, which are any vehicles not owned by the company but leased for business travel. However, the study also saw four out of five respondents admit that keeping better track of grey fleet usage would be beneficial to their operations.

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Therefore, it's important to monitor the number of miles traveled by grey fleet vehicles. That way, you can track the amount of gas consumed and evaluate how the expenses add to your company's overall costs.

Make Sure Your Fleet Partner Is Suitable

When selecting a fleet partner, it's important to ask some simple questions about the entity. Do the services of the fleet partner match the needs of your company? Does their fleet size accommodate the size and scope of your operations? If they're a large company that generally deals with larger fleets in the 500-plus range, you might not be sufficiently prioritized if your fleet consists of fewer than 50 trucks.

Other things to consider regarding fleet partners should include:

  • How many years have they been in operation?
  • What is the primary strength or focus — be it finance or information technology — of their service?
  • What type of feedback have they received from current and former clients?
  • What is the scope of their IT capabilities?

Remember, you might not be sufficiently served by a partner that isn't well suited to the size and scope of your fleet.

Double Check the End-of-Contract Charges

Leasing companies can differ when it comes to defining acceptable ranges of wear and tear on vehicles at the end of a rental. With most leasing companies, the maximum allowable wear is limited to minor chips along the edges of doors and minor scratches on dashboards and upholstery.

In order to keep end-of-contract charges as low as possible, the following checklist should be fulfilled before returning a vehicle:

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  • The vehicle is sufficiently operable in the inside and outside.
  • The paint is free of rust or corrosion.
  • Dents and scratches are nowhere to be found on the paint.
  • The upholstery is free of burns or tears.
  • The interior of the vehicle is cleaned out and free of refuse.
  • The exterior is newly cleaned and ready for inspection.
  • Both keys are still available for return.

Remember, the maintenance of a vehicle is crucial to any leasing agreement.

Instruct Drivers to Travel at Lower Speeds

A common mistake among fleet managers is to ask drivers to get to a given destination as fast as possible. In addition to the risks involved with fast driving, there's the problem with increased fuel consumption that comes with operating a truck at accelerated speeds.

According to a study conducted by AA, a truck driven at 70 mph will consume 9% more fuel than a truck driven at 60 mph. At 80 mph, a truck consumes 25% more fuel than a truck driven at 70 mph. Basically, fuel consumption gets more excessive with each ten-mile increase in speed.

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Install tracking monitors in all vehicles to notify fleet management whenever a vehicle is exceeding the limit. This way, management can send notices to drivers that need to lower their speeds.

Utilize Telematics

When drivers are monitored, they're likelier to be more mindful of their habits behind the wheel. Simply put, safer driving practices reduce the chance of accidents. Likewise, when drivers are told to stay at moderate speeds, it reduces the possibility of excess fuel consumption. All in all, drivers will be more likely to take better overall care of the vehicles when monitored by telematics, the benefits of which also include:

  • Reduced fuel costs
  • Less wear and tear on trucks
  • Reduced insurance premiums
  • Better reputation with customers

Remember, one benefit leads to another in a well-managed fleet.

Keep Management Information Accessible

A fleet isn't likely to have the best organization if management information is hard to access or spread across several formats. Therefore, an important thing to consider is the current way your info is arranged. Could things be more conveniently laid out and accessible? If not, employ fleet-reporting tools and publish all pertinent info in the form of quarterly reviews. Keep all information inputted into an encrypted, password-protected online database for easy access by all authorized personnel.

Avoid Excess Mileage

Be realistic about mileage goals, but aim for the lowest possible. This creates an incentive to keep mileage down once a new contract has been budgeted. Also, stay on top of the timeframe of each truck lease. If there's idle time on the rental, cut it down to save on fees. Furthermore, don't drive if it's not necessary. Some meetings or presentations might be better done online than at a physical location.

Consolidate Car Usage

When it comes to carpooling, scheduling is typically handled by a branch in management that doesn't directly interact with the fleet. If properly implemented, however, carpooling among several people within a fleet can help reduce overhead costs, particularly with grey fleets. One of the best ways to implement a carpooling system is to have it managed by a third-party leasing company, which you can count on to arrange the right number of vehicles.

Vehicle Sharing

Drivers don't always need to travel separately. In fact, money can be saved by sharing vehicles to events. When multiple personnel are traveling to the same venue for the same event, a company can reduce equipment fuel costs by having people share rides. Therefore, company personnel should be encouraged to share vehicles — perhaps three or four to a car, or five or more in a van or truck.

Outsource Fleet Administration

Some fleets try to micromanage but only end up spreading their attention too thin on the key details of operation. In certain areas of business, it's best to hand things over to an external party so that in-house management can focus on its best strengths and central concerns. This can be especially beneficial when it comes to the handling of back-office tasks, which could otherwise be very time-consuming and draining of in-house resources.

Weed out Money-Wasting Habits

Some company practices might slip under the radar yet cost lots of money, despite not being in any way productive. Therefore, it could be beneficial to ask the following questions about your operations:

  • How is time being managed among the fleet?
  • Does it take a week to accomplish things that could easily be finished in two or three days?
  • Are there too many fingers on a certain project that could easily be handled by one or two people?

Remember, the key to a successful operation is not hard work, but smart work.

Revise Your Method of Funding

Every few years, the strategies of a fleet should be reevaluated to accommodate for shifting factors. Chief among these concerns is a given fleet's method of funding. Fact is, the methods settled upon half a decade ago might not be sufficient by current standards.

Consider employing the services of a contract hire company that specializes in negotiating terms with leasing companies on your behalf. Such services are generally connected with optimal funding panels and can, therefore, help you gain superior value.

co2-low-mpg-highReduce CO2 and Boost MPG

For the sake of fuel efficiency and environmental factors, it's best to keeps CO2 levels low and MPG levels high. For example, a vehicle that averages 45 mpg or more will help you save on fuel. When spread across an entire fleet over the course of a year, these savings can add up substantially. Meanwhile, CO2 levels should be lowered as much as possible to reduce environmental impact and help maximize business relations.

FUELChex — A Cost Management Tool for Trucking Fleets

For trucking and construction companies alike, the best cost-management tool is FUELChex. Developed by Shipley Energy, the tool makes it easier to reduce costs for construction fleets, and it also makes trucking operations more productive overall. To learn more about how FUELChex can benefit your fleet, click on over to the Shipley Energy FUELChex page for more information.