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How effective fleet management can reduce your business costs

Fleet vehicles

The key to effective fleet management is recognising what “effective” really means. To some businesses fleet management is a function absorbed into other roles and given an ad hoc status and appreciation. Inevitably this leads to a skewed approach in how costs are managed. There are many costs directly linked to fleet management and they are all fundamental to any successful organisation, so the first step in reducing business costs through fleet management is understanding that it requires dedicated expertise and should stand alone as an established and defined functional department within the business.

Clients, on average, can see an 18% reduction in their fleet costs from an effective fleet management system, according to the managing director of fleet management provider Total Motion, so once the function is established, ensuring fleet management is effective and leads to costs reductions, is down to managing the variables within a cohesive fleet management system. Those variables are people, vehicles and operations.

Let’s take a look at each variable to see how dedicated management can help to reduce costs.

Fleet cost savings from managing people

When managing a fleet you need to have complete visibility of who is where and what they are doing. So investing in software to monitor driver behaviour can present figures which help to form opinions and future policies. This can lead to training opportunities on efficient driving techniques to save fuel costs and where and when to refuel. GPS software can also help the driver with quickest routes and how to avoid traffic congestion and accidents, all leading to less downtime and more efficient operations.

From a compliance point-of-view, risk assessments, health and safety training, insurance and licence checks can all result in operational cost savings and also a reduction in fines, delays and administrative costs.

Fleet cost savings from managing vehicles

Fundamentally you need to assess whether you have the right vehicles for your operations. Do you have too many” Are they the right type of vehicle for the jobs they are doing” Are they designed for long haul journeys or short journeys” Have they been correctly adapted for your purposes” Have you considered age and depreciation” Are they roadworthy and safe Are tax, insurance and MOTs up-to-date

Tracking data can highlight whether vehicles are cost effective to run and whether you can achieve better miles-per-gallon (MPG) from other vehicles, or by converting your fleet to electric vehicles. You can also look at funding models for your vehicles. So is it cheaper to lease This means that you are always driving newer vehicles with better fuel efficiency, better on-board tech, better reliability and less maintenance issues. It may also be easier financially for the business, you can better manage monthly costs through leasing and the business doesn’t have a depreciating asset on its books and doesn’t have to worry about a re-sale value.

Fleet cost savings from managing operations

First and foremost you need to look at whether you can cut out unnecessary travel from your day-to-day activities. Drivers can be trained to reduce MPG but the first thing to look at is whether jobs are managed so that multiple drops or visits can be done on one journey, without having to return to base. Can you do collections on the same journey as deliveries” Driving back with an empty vehicle can be a cost, so can this be avoided

A better use of technology can mean meetings are carried out using inter-connectivity. This immediately reduces travelling time considerably and results not just in fuel savings, but also a reduction in vehicle wear and tear and a better utilisation of employees, ie. they can be doing something more productive than spending hours on the road. In all cases, data on the miles travelled can be collected and analysed to support these decisions.

A fully-functioning fleet management system requires hierarchical support, but as soon as it is acknowledged as a key function and critical costs are properly managed with strategic thinking and top management policies, and all backed-up by accurate data, then business cost savings are there to be made.


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