Running a Fleet of Vehicles? 6 Easy Ways to Save on Fleet Costs
Running a fleet of vehicles can be a costly exercise. If it’s your core business, you’re probably keeping tabs on all the basics, but many businesses who see their fleet as an enabler rather than the core of what they do could be letting unnecessary costs slip through the net on the assumption that they just have to be accepted at face value. But your fleet could be costing you more than it needs to. Check out these tips for reducing your fleet-related costs and boosting your bottom line.
1. Consider Fuelling up on Site
It’s a fairly simple equation – you can buy fuel retail at gas stations, or you can get it wholesale and fill up on site. If your fleet is large enough to warrant it, and trips are mainly over a relatively short distance, fueling up on site should be saving. You may be wondering whether keeping your own on-site fuel storage will represent an administrative headache, but tools like fuel tank telemetry monitoring allow for some degree of automation, alerting you to potential issues like leaks or the need to top up tanks.
2. Invest in a Fleet Management System
From tracking service times to monitoring driver habits and productivity, fleet management technology presents an opportunity to run your stable of vehicles more efficiently. For example, bad driver habits will cost you in fuel consumption and vehicle maintenance expenses. But there’s a lot more you can do with fleet management systems than just that.
Back in the day, following your vehicles’ progress en route and knowing what stops were made where, for how long, and for what reason wasn’t all that easy, but today’s fleet management systems can give you all this information and more. From building your reputation as a reliable business that lives up to delivery promises to ensuring that drivers are productive on the job, good fleet management systems help you to stay in charge.
You’ll also save on downtime owing to breakdowns since many systems also track mechanical efficiency and can alert you to issues that may otherwise have gone unnoticed until they had caused potentially costly damage.
3. Update Your Fleet
Keeping vehicles going for as long as is humanly possible might seem like an economy, but it may not be. In the first place, newer vehicles have greater fuel economy and the cost of fueling and maintaining a tired-out vehicle needs to be offset against the purchase price of a new one.
There’s also the issue of depreciation. Keep your vehicles too long, and it will be hard to get a worthwhile resale value – plus, that depreciation figure on your accounts ultimately does pay for a new vehicle since it’s a legitimate, tax-deductible expense. Since depreciation is calculated as a percentage of value, old vehicles won’t save you much, if any, tax while new ones may cost you a lot less than you expected thanks to tax savings.
The marketing angle is harder to measure, but worth remembering. Your branded vehicles on the roads are a form of advertising. Everyone who sees them, whether they’re your clients or not, will form an opinion of your business based on how those vehicles look. Suffice to say, your business’s reputation for professionalism is going to take a blow if the vehicles look outdated or beat-up.
4. Investigate Loading and Unloading Practices
In smaller business contexts, a single semi-truck could have several stops to make along its route with deliveries to your clients at each one. Ask a few questions to see if you can increase loading and unloading efficiency.
Are the goods for each client loaded in a logical order according to the delivery route? Are they easy for the driver to identify from the rest of the load? Is the packaging manageable, and can it be improved for easier loading and unloading? Are your clients receiving deliveries efficiently, and if not, can you negotiate with them?
In the process, examine your client’s returns and complaints stemming from goods damaged in transit. If these damages are frequent, you have a sure-fire indication that something needs to improve. Attending to it could result in significant savings and improved customer satisfaction.
5. Keep Tabs on Your Insurance Policies
Chances are, you’re already insured – but are you sufficiently insured and are those policies up-to-date? Road accidents are an obvious cause for concern, but other factors need to be taken into consideration. For example, a broken refrigeration unit could mean that an entire freight gets ruined. Finding out that you aren’t covered for that kind of disaster when it’s already too late could be a very costly mistake.
Small and medium sized businesses would do well to engage an insurance broker who is willing to help with risk assessment, audit their current insurance coverage, and recommend policies to cover any gaps. He or she may even be able to save you on insurance costs while ensuring that you have adequate coverage if the worst happens.
6. Outsourcing Transport, Sharing Loads, or Hiring Trucks
If transport isn’t your core business, outsourcing it could be cheaper than running your own fleet. This could range from using transport contractors and companies to sharing loads with other businesses or filling a truck that would otherwise have an empty run to or from its destination.
The latter can be a very cost-effective option for you, even if you decide not to outsource. After all, an empty truck is an unproductive truck and a journey without a payload is all cost with no benefit. Recovering the cost of that empty run and making a small profit is a real possibility provided you can find a business that needs transport on that route. As an alternative, consider production inputs that come from businesses on a return route when your truck is empty. Why pay for delivery if you can collect instead?
If you have a fleet but aren’t a transport company, however, outsourcing removes a lot of the pressure from you and could be cost-effective – if you can find the right recipe. But before you decide to outsource transport, do your homework about the service offered. Trucks and their drivers are an important link between your business and your client’s personnel, and a bad choice will reflect on you, even if the contractor isn’t your employee. If you aren’t sure about the customer service someone else’s drivers will give, weigh the cost of hiring trucks against that of owning them. Once again, there is potential for savings under the right circumstances.