7 Ways to Lower Your Fleet Management Costs
As a fleet manager, you’re always looking at costs, expenses, and break-even points. In an effort to increase profitability, you’re doing everything you can to minimize your department’s negative impact on the bottom line. But it’s not always easy. In fact, trying to lower costs can be quite a difficult endeavor.
How to Lower Fleet Management Costs
Whether you’re overseeing a handful of vehicles or a fleet of hundreds of trucks, lowering your fleet management costs is one of the best ways to boost your bottom line. At the same time, it also enhances the efficiency and longevity of your operations.
Here are some ways you can achieve these benefits:
1. Implement Regular Maintenance Schedules
First and foremost, regular maintenance is key. This might seem like an upfront cost, but it’s one of the most effective ways to avoid expensive repairs down the road.
Regularly servicing your fleet can prevent major mechanical failures and extend the lifespan of your vehicles. The best thing you can do is schedule regular check-ups that include oil changes, tire rotations, brake inspections, and other necessary maintenance tasks. This is the key to getting your vehicles to run efficiently all the time (not just occasionally).
2. Invest in Fleet Management Software
Modern technology can drastically reduce costs. Specifically, you should be looking for software that can help you implement better systems and processes across the board.
Fleet management software, for example, provides real-time data on vehicle performance, fuel usage, and driver behavior. It’s able to proactively optimize routes to reduce mileage and fuel consumption, monitor idle times, and even ensure drivers are adhering to speed limits. These are all important driving factors in lower operational costs. The initial investment, while it does carry a cost, is almost always quickly offset by savings in fuel and maintenance expenses.
3. Focus on Fuel Efficiency
Fuel costs can eat up a large portion of your fleet budget. To reduce these costs, consider purchasing more fuel-efficient vehicles when it’s time for replacements. Again, you’re going to pay a premium on the front end. But as long as you have a good idea of how much useful life you can get out of a vehicle, you can easily calculate the long-term savings. You’ll typically find that the long-term fuel savings significantly outweigh whatever premium you pay at the time of purchase.
In addition to purchasing the right vehicles, encourage drivers to adopt fuel-saving driving techniques such as gradual acceleration and avoiding excessive idling. (All of this can be tracked inside your fleet management software.)
4. Perform Fleet Inspections
Unfortunately, most companies don’t inspect their fleet vehicles as much as they should. They might do it weekly or monthly, but usually not daily. However, if you want to keep your long-term costs low, you need to perform daily inspections.
Fleet vehicles should always be put through a daily pre-trip inspection before ever leaving the lot. This should be a physical walkaround inspection that’s conducted by the driver. They should document everything inside your company’s fleet management app to keep a daily log of everything they find.
The daily list of things to look for should include new or existing damage, tires, steering, mirrors, brakes, lights, fluid levels, hoses, belts, tire pressure, and the presence of leaks.
5. Train Your Drivers
Driver behavior has a significant impact on fleet costs. You can reduce the frequency of accidents and lower insurance rates by implementing proactive training programs that emphasize safe and efficient driving.
In your training, educate your drivers on best practices for economical driving, and consider incentive programs to reward those who perform well in terms of safety and fuel consumption.
6. Optimize Vehicle Utilization
Do your best to maximize the use of each vehicle in your fleet. Here are some helpful tips for doing this:
● Analyze your fleet’s current utilization to identify any vehicles that are underused or unnecessary.
● Reduce the fleet size to better match your actual needs, which can lower insurance, maintenance, and purchase costs.
● Implement a vehicle-sharing system within the fleet to ensure each vehicle is used efficiently.
7. Review and Negotiate Insurance
Insurance is a pretty big expense in fleet management. It’s highly beneficial to regularly review your insurance policies and shop around to find the best rates.
On top of this, consider increasing your deductibles to lower premiums. Ensure that you’re not over-insured or paying for coverage that your fleet doesn’t need. You can also discuss any available discounts with your insurance provider, like ones for safe driving records or the use of fleet management technology.
Fleet management will always be expensive – it just comes with the territory. However, it doesn’t have to be a huge drain on your company-wide profitability. By adopting an intentional approach to cost management, you can save money and drive down unnecessary expenses.
Hopefully, this article has given you some practical ideas for how you can take some small steps toward big changes!
