Know Where Your Spending And You’ll Know Where to Save

Know Where Your Spending And You’ll Know Where to Save

When it comes to fleets, things sure aren’t getting cheaper. This has a lot of owners and fleet managers asking, what are some ways we can save?

To find an answer, first we have to find where the money’s being spent.

 

Understanding the Full Picture

Most fleet managers are probably using some form of tracking software that provides data on what their fleet is costing, but there are often gaps that fail to show the whole picture.

For example, a recent survey of more than 2,000 fleet executives by Florida-based Fleet Advantage, found that many owners aren’t understanding their total cost of ownership (TCO) because their data is fragmented. Specifically:

  • 26% of executives say their software does not combine financial and operations data
  • 48% say their software does not include benchmarking reports for industry comparisons
  • 62% said their platform does not produce profit and loss statements

Going much deeper into the real costs, international professional services firm KPMG published a report a few years ago that depicted a complex breakdown of fleet TCO. Essentially, it showed that an owner’s money is going a whole bunch of different places – several of which may be regularly overlooked.

 


Fleet Costs – Where Your Money is Going

Note: This breakdown does not include driver costs and fuel costs.

Source: KPMG, “Re-Evaluating the Total Cost of Truck Fleet Ownership”  

 


Opportunities to Save

Once we know where the money’s going, we can work to stem the flow. Owners and fleet managers have a lot of different avenues they can take to achieve savings.

  • 10% Off – “Simply improving driver behavior can result in savings of up to 10 percent, going as high as 20 percent for particularly aggressive drivers,” wrote authors in My Logistics Magazine. Idling, for example, is one costly habit that can be corrected. The American Automobile Association (AAA) says that a truck idling for just one hour a week can cost $65 per truck annually, assuming a fuel price of $2.50 per gallon. Also, for heavy-duty vehicles, an hour of idling equates to approximately 80 miles of wear and tear on the engine, according to MiX Telematics.
  • Discounts and Incentives – Did you know there are credit cards specifically designed for fleets? These are offered by numerous brands that offer incentives like fuel discounts, rewards, and purchase tracking.
  • Check the Pressure – According to RTA Fleet Management Software, “Tire expense is the third greatest expenditure of most fleets, after fuel and payroll. Monitoring tire inflation, alignment, and pressure can save thousands of dollars. Running a tire just 10% overloaded can rob the user of 16% of its tire life.”
  • Proactive Maintenance – A fleet servicing partner that offers pre-negotiated deals can be handy. This helps reduce maintenance surprises and make expenses a bit more predictable.
  • Do Not Exceed – Older vehicles cost more to operate, generally. Establish your maximum mileage early on and turn over the vehicle once you’ve hit that number.

Although these examples are just a handful of the dozens of possibilities for saving money on your fleet, they’re also ones that almost any company can implement right away. Although little things like tire pressure and idle times might seem trivial on their own, together they add up to huge potential for savings and should be part of every company’s fleet strategy. Remember, every little bit counts and there are tons of different options that could work well for your business.

Category Features, Logistics