Fleet management costs are a primary consideration when improving your business's bottom line. The significant costs to consider are fleet insurance, vehicle maintenance, running costs, vehicle storage, depreciation, downtime, borrowing costs, and more. If ignored, these costs can span out of control, reducing your profits and hindering growth.
To identify the fleet management costs to scrape out or reduce, track your expenses to determine how much you're spending on each section and the ROI you’re getting. This will help you adjust your expenditure accordingly. This article outlines nine tips for reducing fleet costs.
1. Shop around for cheap insurance
While fleet insurance helps protect your vehicles in case of accidents or other eventualities, it can be quite expensive. Try negotiating with your current insurer for cheaper premiums to reduce this expense. If they disagree, consider shopping around for companies offering affordable car insurance policies, such as www.cheapestcarinsuranceflorida.com. Additionally, looking for ways to reduce your premiums can help reduce your insurance costs. You can start by installing trackers to determine a stolen vehicle’s location and monitor your employee’s driving behavior.
If you prove that your drivers are considerate and safe, you can lower your premiums. Consider initiating ongoing driver training programs because insurers see them as low-risk. When shopping for insurance policies, it's a good idea to consider companies that allow combining insurance policies because this can help reduce fleet insurance expenses. You can also ensure that all your drivers take the defensive driving course to earn lower insurance premiums. Employing drivers with clean driving licenses, buying vehicles that aren’t expensive to insure, and installing camera technology can help you negotiate for reduced premiums.
2. Minimize fuel expenses
Fuel is among the most significant expenses for running a fleet business. In addition, it's also difficult to control and predict the expense. Start by measuring your current fleet fuel costs. You can do so manually with spreadsheets and receipts or telematics technology. To reduce fleet fuel costs, monitor and discourage overspeeding because driving fast requires more gas. Tracking idling engines help you see where and how long each driver leaves their engine on to improve accordingly.
Using GPS tracking technology, you can determine whether your drivers drive aimlessly across the community and how efficient your routes are. This helps you improve your fleet's route efficiency for reduced fuel costs. Consider signing up for fuel card programs offering discounts to save fuel costs.
3. Downsize your fleet
Downsizing your fleet is an excellent way to streamline your operations for maximum efficiency. However, this doesn't mean restricting or eliminating services. When you utilize fleet resources efficiently, you can improve fleet service and save money. If you want to downsize your fleet, start by looking at the equipment and vehicles you under-utilize and eliminate.
This will help reduce maintenance costs while increasing fleet efficiency. Due to a lack of objectivity, going through your composition study and fleet size can be difficult. Consider hiring a fleet management consulting service for effective fleet right-sizing.
4. Check tire pressure
Your fleet depends on tires to grip ice and snow, withstand long driving periods, and support the vehicle's weight. The tire's health affects your fleet's efficiency, braking, steering, acceleration, load capacity, braking, and fuel economy. For your tires to remain in top condition, it's paramount to maintain the correct tire pressure. Maintaining proper tire pressure improves gas mileage by an average of 0.6 % and sometimes up to 3%.
Poorly inflated tires wear quickly and unevenly, requiring new ones sooner than anticipated. Regularly check the tires and their pressure to increase the chances of spotting uneven wear, leaks, and defects. You can also use a GPS with a tire pressure monitoring system to make it easier to maintain tire pressure.
5. Consider fleet renewal
As cars age, operation and maintenance costs increase while their efficiency reduces. Replacing your vehicles periodically reduces overall costs such as maintenance and repairs, downtime, safety risk management, and fuel efficiency. A successful vehicle replacement schedule involves establishing a comprehensive fleet inventory, determining the parameters for when to replace your cars, and approximating the associated costs.
6. Ensure regular fleet preventive maintenance
You'll require an excellent preventive maintenance program for your fleet of vehicles and trucks to operate safely and efficiently. Preventive maintenance involves different services, including inspections, vehicle repairs, lubrication, testing, cleaning, parts replacement, adjustment, and routine servicing, designed to avoid potential issues and maximize fleet availability. It helps reduce or prevent breakdowns in fleet management.
Based on your fleet’s operational needs and requirements, preventive maintenance can be time-based or implemented after reaching a set mileage. Preventive maintenance is more cost-effective than fixing sudden breakdowns because you detect issues in their early stages before escalating, reducing maintenance costs. Routine preventive maintenance reduces vehicle downtime and improves fuel savings.
7. Reduce vehicle loads
When equipment your drivers don't need is onboard fleet vehicles, they might be weighed down, reducing fuel efficiency. Emphasize the need to empty gear from previous trips, mainly heavy equipment or materials, to save on fuel. If your fleet vehicles contain roof racks, take them down when not in use to reduce the load because the extra drag from an empty rack can increase fuel usage.
8. Encourage fuel-efficient driving
Fuel-efficient driving is an excellent way to lower greenhouse emissions while reducing fuel usage and preventing wear on your car. Over speeding increases fuel consumption, and maintaining the speed limit ensures proper fuel usage. Consider accelerating gently because hard accelerations result in more fuel usage. Speed fluctuations also mean using more fuel, so try to maintain a steady speed. Anticipating traffic can also help a constant speed as much as possible while ensuring safety.
9. Choose a suitable fleet partner
When choosing a fleet partner, it's crucial to ensure they're suitable for your business. Consider whether their services match your company's needs and if their fleet size can accommodate your operation's scope and size. If the fleet partner you're considering deals with a vast fleet, you might not be a priority if your fleet is smaller.
You should also consider how long a potential fleet partner has been in operation, their IT scope capabilities, their core strength, and the feedback they've received from former and current clients. Picking the right partner ensures you're sufficiently served based on your fleet's size and scope.
When ignored, fleet management expenses can negatively impact your bottom line. Use these tips to reduce fleet costs.