10 Ways to Reduce Fleet Management Costs (Part 1)

10 Ways to Reduce Fleet Management Costs (Part 2)

Nowadays getting a Fleet Management system does not ensure your company that it will be able to cut costs successfully and reach the highest efficiency in its operations. In order to manage your fleets efficiently you should also pay attention to these 10 tips that can help your drivers to avoid extra costs:

1. Reduce the Fleet’s Size

Reducing the number of vehicles in fleet management is the most proven way to reduce overall costs. Eliminating 100 vehicles offers a potential savings opportunity of more than $500,000 per year. While removing these vehicles would proportionately eliminate 100 percent of fixed costs, the likely increased workload required of the remaining fleet vehicles will raise the operating costs for those vehicles slightly; however, there will still be a net decrease in overall fleet operating costs.

Reduce the Fleet’s Size
Green Fleet Initiatives

2. Cut Miles Traveled

The number of vehicle miles traveled is one area where fleet managers typically have limited, if any, control. Other than monitoring and enforcing personal-use policies, fleet managers are not privy to day-to-day business purpose data or have the tools to measure the reasonableness and justification for such use. Still, unnecessary trips with little business justification occur and such events drive up vehicle operating costs.

3. Reduce vehicle size and weight

Fleet managers are actively seeking to reduce vehicle size. To do so, they should invest time into better understanding the functional purposes of the vehicles that they manage. This requires spending time in the field, an undertaking that many fleet managers fail to do. Only by thoroughly understanding business requirements, can fleet managers begin to appropriately downsize vehicle models, downsize engines, and add suitable options while avoiding negatives such as mechanical failure and downtime.

Reduce vehicle size and weight
Upfitting Trends of Fleet Management

4. Modify driver behavior using Fleet Management system

Many organizations with fleet management systems fail to consider the impact drivers have on vehicle fuel economy. Hard acceleration, idling, inconsistent speeds, excess use of air conditioning, and hard braking are bad driver habits that can be corrected with driver training and/or education. According to the EPA, a driver can impact fuel efficiency as much as 33 percent. Such strategic direction, however, requires collaboration on all levels of management in order to achieve driver buy-in, acceptance, and success.

5. Lower Fuel Cost

Fuel is often the second largest variable expense (after depreciation) faced by fleet managers. Fleet managers should remain alert for potential spikes and keep a proactive fuel management program in place at all times. Practices such as acquiring fuel-efficient technologies, vehicles weight reductions, additional transmission gears (e.g., 8- to 10-speeds), and appropriate drive types to meet business needs should be continued even when fuel prices are stable.

Reducing Fuel Spend

Read the second part of the article here.