With the current economic conditions we are facing, it has never been more important to manage your costs, with fleet costs being one of the largest lines on your balance sheet.  So how do you know what is reasonable and what is not?  What does good look like?  Good enough doesn’t cut it.

Maintenance

Are you paying for preventative/scheduled maintenance, or catastrophic failure maintenance?  Take a look at some of your work orders and it will become quite clear.  It is more cost effective for regular service on your vehicles than it is to wait until a major breakdown in the field and the vehicle needs to be towed in.  While that is understood by pretty much everyone with a vehicle, scheduled maintenance is especially difficult to manage when your work is project based.  It is critical that your fleet manager be involved in regular operations meetings so that maintenance can be planned with minimizing the interruptions to the business. Also ensure that the proper maintenance schedule is performed.  Most OEMs have more than one maintenance schedule that best matches the environment that your vehicles are being operated in.

Warranty

How many repairs are being made under warranty?  All new vehicles come with a warranty and it is up to the end user to perform scheduled maintenance and use the vehicle in a way to preserve this warranty.  Your fleet manager should be working with your maintenance providers and reviewing all repairs and challenging them on what is warrantable.  It is critical to refer the Original Equipment Manufacturer (OEM) for repair as your first choice.  Many non-dealer shops and internal vehicle repair facilities do not submit repairs to the OEMs for warranty so you could be losing thousands to save a few dollars on their labor rate.  Also, the OEMs will have access to any recalls or Technical Service Bulletins (TSBs) that are issued by the OEM.

Fuel

Does your fuel consumption make sense when you compare it to your distance travelled?  All vehicles have a certain fuel consumption rating.  But in most circumstances, if you were to look at the data across your fleet the OEM rating and your real world consumption numbers aren’t even close.  Idling, towing, weather and where your fleet is working all play factors on what your real fuel consumption is.  However, if your distance is going down faster than your fuel consumption there may be a reason for it.  Abuse of fuel cards is always a concern and with the slowdown in the market it has the potential to get worse.  Fuel consumption will rise and fall seasonally, but set some targets and start measuring against them.  Lastly, excessive engine idling is probably your largest controllable vehicle expense you have. Easy savings if you know what’s happening in the field.

Utilization

How many trucks are parked against the fence?  Now how many of those trucks are you making payments on?  Ouch!  Even the most basic of fleet evaluations are having companies downsizing and filling the auction houses as we speak.  If you are a Canadian company, compare the Loonie to the US dollar and you can see why a lot of trucks are heading south.  So why not capitalize on the opportunity to unload some cost?  Not only on monthly payments, but depreciation, insurance, and incidentals as well.  Keep your assets that are owned, lose the ones you owe on.  But what if you get a contract and need trucks?  Simple, rent them.  Rental pricing has come down significantly.  You can rent a truck, potentially build the cost into the contract, and not have to worry about making payments once the job is done.  No depreciation, no payments, no worries.

Damage

Do you really know how your fleet is being operated?  Are your drivers using your vehicles for the purposes they were intended for?  Are all damages being reported?  (Spoiler alert!  The answer is NO).  You are not alone on this so don’t feel bad.  Your fleet manager will have visibility into all work orders that are being generated and should be able to get a good understanding of where the problems lie.  If there are significant damages to vehicles that are beyond wear and tear, it can be a matter of the wrong vehicle being used for the wrong application.  That is why it is critical for your fleet manager to attend the operations meetings.  Knowing what is needed up front can keep your profit in your books at the end, instead of in the shop.

Insurance

Is there any cost relief from your insurance provider?  Hit and run damage, collision damage, broken glass, and weather damage may be covered depending on the situation.  Understanding what you are covered for may help.  Also, are you paying for things that you will never need?  Is your deductible where you need it to be to get the most out of your coverage?  All relevant questions to ask, especially when times are tight right now.  Your business has probably changed, so why shouldn’t your coverage?

Downtime

Is your fleet manager tracking downtime of your units that are being repaired?  Are they holding vendors accountable and getting the repairs done in a timely manner?  Reducing downtime for maintenance means more opportunity for savings and increased utilization.  Track how long your vehicles are sitting at your maintenance provider’s shop, and then develop Key Performance Indicators to measure them.  Owning extra vehicles to accommodate poor maintenance shop performance is not a solution.

Standardization

How strong is your purchasing power?  If you have a fleet of 50 units, you may think you have pretty good pricing with your vendors.  However, if you partner with a fleet management provider, you can leverage your buying power with their volume discounts and save more money.  Example: where do you buy tires from, and which brands do you allow?  If your answer is a single vendor and one brand of tire, you are on the right track.  How many different brands of vehicles are in your fleet?  This one can be more complex to deal with.  But if you have one spec of vehicle, managing parts for one brand is more cost effective.

Technology

Do you use technology to manage your fleet?  Does your fleet manager understand it?  If the answer is no to either question, then they need to be spending more time in the field collecting the data manually.  Technology can and should be used to help manage your fleet.  If you are relying on folks in the field to provide accurate and timely data, there are some gaps in your processes.  Telematics data is a tool to allow leaders to make informed decisions.  There will always be a need for human intervention between technology and vehicle to make these decisions on what is best for the organization and the end user.  Telematics technology has become more intuitive and can even decipher check engine lights and provide the codes, allowing your fleet manager to make better decisions instead of just calling a tow truck.

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If you are not sure how to answer some of these questions, we can help.  We provide an objective review of your current Fleet Management Program and help you identify some quick wins.  We are all in this together.

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