No matter what your fleet is used for, whether you support one client or hundreds, variable expenses can be challenging to manage. Sure, there are many line items on your yearly expense report that are predictable, but other items, like maintenance costs and fuel costs, can vary greatly from year-to-year. With a wide range of variable costs to manage in an industry that fluctuates based on many external factors, fleet managers have to be savvy cost cutters.
When developing a cost-cutting strategy, it’s important to factor in safety requirements, mandatory spending, and the overall health and well-being of your fleet AND your drivers. If your approach to spending less money puts any of these items in jeopardy, then you risk incurring more unforeseen costs down the line. There are many ways that fleet managers can reduce expenses throughout the year, but here are 5 of the most efficient tactics:
Optimize Your Fuel Strategy
Depending on the organization, fuel costs can add up to 30%-60% of a fleet’s total spending. The past year has illustrated just how reactive fuel prices can be to geopolitical tensions and climate events, making fuel costs hard to predict and manage. Despite market fluctuation that’s very much outside the control of any fleet manager, there are still ways to manage fuel costs with an optimized fuel strategy.
If possible, consider investing in fuel cards for your fleet. When partnering with a specific fuel provider or a network of them, you might be able to secure fixed weekly pricing or a special pricing structure. These cards will also reduce the possibility of fraud at the pump while making fuel expenses more straightforward to track and manage.
You can also reduce fuel expenses by planning routes that include fuel stops, helping your drivers avoid paying highway premiums. With a bit of due diligence, fuel expenses can be cut down drastically, even if the price at the pump seems to be rising without restraint.
Work with a Central Service Provider
When it comes to getting your trucks repaired or routinely serviced, working with a central service provider for your entire fleet offers a number of benefits. With this approach, you can anticipate a specific level of service every time one of your vehicles is in the shop. You’ll also be able to trust the quality of the work more than you would be able to when working with different repair shops. Lastly, many mechanics and auto repair shops will offer bulk pricing or set discounts if you have an exclusive service agreement with that shop.
Use a Telematics System
Telematics systems have come a long way in recent years; this technology pairs a GPS system with diagnostics and tracking tools that can be used to monitor how each vehicle in your fleet is doing on the road. You can gain insights into where a vehicle is, how fast it’s going, and what’s happening in the vehicle at that moment.
The insights from a telematics system can help you determine if your drivers need to be trained on more fuel-efficient driving techniques or if there are safety issues happening at any time. These are just a couple of the use cases for a telematics system but investing in them can offer a new, data-driven way to manage your fleet and cut costs.
Invest in Top-Tier Insurance
No matter how many vehicles are in your fleet, a comprehensive fleet insurance plan should be a no-brainer. Instead of obtaining insurance for each vehicle separately, a fleet plan enables price reductions and a more seamless experience. You won’t have to call 20 different times to update each vehicle’s policy, and instead, can manage insurance all at once. Work with a broker to find the best plan for your fleet; compare prices, coverage, and other plan benefits before making a decision.
Conduct Driver Education Programs
Holding training sessions for your drivers is an investment, of course. It can be difficult to find the time, space, and resources to get all drivers on the same page, but if done right, driver’s education programs can actually save your company money.
The way a driver is on the road can impact fuel efficiency by up to 30%; teaching your drivers proper driving techniques to maximize fuel efficiency is well worth the investment. Avoiding intense accelerations, cutting back on idling in parking lots, and using air conditioning systems a bit more conservatively are all great ways to cut fuel costs across the board.
Reducing Expenses Can Increase Efficiency
If done correctly, reducing expenses does not have to negatively impact delivery timelines, driver happiness, or overall customer satisfaction. There are many ways to manage expenses without sacrificing the aspects of your fleet that set you apart from competitors. When fleet managers find out that a fleet can get more efficient while simultaneously cutting costs, it can seem too good to be true. Try adding one or two of the above suggestions to your fleet management strategy and you’ll see changes in no time.