How to Reduce Fleet Management Costs

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Like any business person, fleet owners and managers go into the business to make a profit. To do this successfully, they must understand where the money is being spent. More importantly, as a fleet manager or owner, you must be able to identify areas of operation where costs can be reduced. Knowing these pieces of information can help you better manage the expenses required in operating a fleet.

With that said, here’s how fleet managers can reduce costs:

1. Take stock of your vehicles

Some vehicles in a fleet incur more costs than what they bring in. These vehicles tend to be ones that are not crucial to fleet operations, such as those that are highly specialized but underutilized. Letting these vehicles go can help lower fuel and maintenance costs.

To identify which vehicles need to be discharged from your fleet, consider their total cost of ownership and utilization rate. Those that incur costs but have low utilization rates and are non-critical can be disposed of.

2. Encourage fuel-efficient driving

Fuel is one of the most significant cost drivers within fleets. This is why fleet managers must have a proactive fuel management system in place. This means tracking the fuel costs from every vehicle and imparting fuel efficiency techniques for drivers, especially ones who incur significant fuel costs.

These techniques usually involve better driving habits, such as switching gears properly, slowing down their driving, and keeping tires at the right pressure. As drivers develop these habits, their fuel costs can go down significantly, lowering the overall fuel spending of the fleet.

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3. Optimize route planning

One of the most overlooked areas of fleet management might be route planning. However, inefficient routes not only drive up fuel costs but can also affect your drivers’ health. Both of these can grow into bigger and costlier problems. Your fleets’ vehicle routes must be optimized for every travel.

Plenty of applications and pieces of software have been developed to calculate the best route fleet vehicles can take. This means going on the shortest and smoothest routes possible. With your fleet driving this way, drivers can avoid known areas of heavy congestion and minimize the miles they travel. As a result, the fleet can see savings in terms of fuel and vehicle maintenance, as well as avoid penalties from late deliveries.

4. Eliminate unnecessary expenses

Beliefs regarding the proper maintenance of fleet vehicles are sometimes outdated. Some fleet managers impose vehicle maintenance every few thousand kilometers. While preventive maintenance is essential in keeping vehicles functioning for longer, not every vehicle needs to have maintenance checks frequently.

Regular maintenance checks are only required for vehicles that perform severe duty. Light-duty vehicles can extend the intervals of their preventive maintenance as long as proper pre- and post-duty checks are being carried out. By doing this, you can eliminate the unnecessary expense that frequent maintenance incurs.

Apart from that, other unnecessary expenses also include over-spec’ing vehicles and keeping underutilized a part of the fleet, as outlined in the first point. Eliminating these can save your fleet a considerable amount of money.

With rising costs caused by external forces fleet managers cannot control, it’s essential to manage costs in-house. Through this, you can maintain your fleet’s overall profitability.

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