Now more than ever, it’s important to find fleet cost savings. Whether you’re busier than ever or find that your business has slowed down, finding savings in your fleet that can drop right to the bottom line is valuable.
Experts advise that there are five major fleet expense areas that offer opportunity for fleets. They include:
Fuel represents the number one business expense for fleets and 53% of fleet owners admit they have challenges controlling it, according to an industry survey. The single biggest culprit behind higher fuel costs? Idling. Bring idling under control, and you can reduce not only your fuel costs but also maintenance costs.
66% of FleetLocate customers reported in a survey that they were able to reduce idle time by 10-25%.
According to a survey we conducted, 45% of fleet owners say vehicle maintenance is one of their biggest cost concerns. Preventative maintenance program can help you avoid costly breakdowns and extend the lifecycle of your vehicles; these expenses can spiral out of control if not monitored properly. Companies should work together with their maintenance team to track all the costs associated with maintenance and determine where improvements can be made.
Vehicle Insurance Premiums
According to the 2019 Motus Driver Safety Report, costs incurred by businesses from insurance premiums, vehicle repairs, lost productivity and more amounted to $57.9 billion the previous year. These losses result in higher premiums for fleets of all types and sizes, from owner operators to major corporations. Ensuring your fleet is running safely is not only the right thing to do; it also directly affects your bottom line. Safer carriers are more profitable carriers. To manage your risks and reduce your exposure to premium hikes, companies need to develop an iron-clad safety policy that every member of fleet operations adheres to.
46% of fleets using GPS fleet tracking solutions reported reduced driver speeding in a survey
To lease or not to lease, that is the question – albeit, not a simple one. But it’s an excellent question to ask, particularly when the economy is volatile and hard to predict. A new acquisition impacts fleet performance, cash flow, and most importantly, your balance sheet. Fleet managers and other decision makers should conduct a vehicle lifecycle replacement analysis before any decisions are made to determine the optimal amount of years each individual truck should be operated. With this information, you can make savvier acquisition decisions and discover the operating age in which vehicles costs more to maintain a truck than it does to replace it with a newer, more efficient vehicle.
Driver Wages and Benefits
Even during times like these, driver wages and benefits will continue to be one of your highest expenses. Chris Henry, Program Manager for the TCA Profitability Program (TPP), advises that one step fleets can take to reduce these expenses is to consider paying a per diem as a tax-free reimbursement. If a company provides per-diem to drivers on a pre-tax basis, Henry says, the driver would essentially receive “tax-free” income—which in turn becomes a recruitment and retention tactic for you.
Want to know more about how you can find fleet cost savings? Get our report, Fleet Costs: Where Are Successful Companies Finding Savings?
You can also visit our Cost Savings Resource Center, where you’ll find a variety of reports, articles and on demand webinars.