Managing your fleet’s bottom line should always be a high importance – especially during times when budgets are tight. Here are nine efficiency opportunities to help control costs while meeting financial, safety, and performance goals.
Your bottom line may benefit from a combination of leases, such as using rentals for seasonal needs to supplement your existing fleet during periods of higher vehicle demand. Ask your fleet management or leasing partner if they offer rentals or other short-term arrangements that are flexible enough to accommodate fluctuations in need. Having the right number of vehicles with the optimal lease structure can have a significant impact on your monthly cash flow and annual bottom line. It is also important to ensure your leasing partner is experienced at partnering with you to on accounting and tax considerations, plus budgeting and appropriation cycles designed for your fleet and organization. When evaluating your current leasing partner (or potential partners if you are in a request for proposal period or other evaluation process) ensure they have a successful track record in: Customized Financing Terms & Structure
Remember, your fleet is an asset, and much like other assets the equity in it can be leveraged to find cash when needed. There are a few ways to accomplish this: If you have owned assets, you can sell them to a fleet management company and have them leased back to you for a cash infusion. You can dispose of un-used vehicles or equipment either through traditional remarketing channels like auctions or through a guaranteed buy program. In guaranteed buy programs, a fleet management company gives you an upfront, cash offer and assumes the risk and responsibility of disposing of the vehicle
In addition to the potential for injury or even death, crashes can cost thousands or even millions of dollars in repairs, downtime, litigation and reparations. One of the most significant advances in telematics and analytics-based fleet management systems is the ability to predict which drivers are most at risk for accidents, allowing fleet managers to proactively assign safety trainings to mitigate risk. The data also shows whether driver safety training programs are effective. Speeding, hard braking, and lack of turn signals are useful to identify risky driving behaviors, but if training and safe-driving reward programs reduce those bad habits and accident rates fail to fall as expected, managers can look at other potential issues such as fatigue or distracted driving.
Cloud computing, big data, and connected vehicles are powering advances in vehicle monitoring, and with each passing year fleets have more options for capturing actionable information. One of the largest areas where fleets can drive efficiencies is through connected vehicle data, telematics, and driver behavior data. Armed with hard data about incidents such as hard braking, speeding, and harsh cornering, you can actively monitor which policies have the most significant impact on incident reduction. This focus can help you reduce risk of accidents and drive down fuel and maintenance costs. Work with your fleet management provider on which connected vehicle or telematics program may be right for you.
Limiting liability and proactively addressing risk management extend beyond driver behavior. Connected vehicle data is helpful to align records and either prove or disprove cases of fraud. For example, records will be able to confirm if a vehicle was used off-hours against policy, or if a vehicle was at a particular gas station when a large purchase was made with a fuel card. Monitoring use patterns to identify opportunities for optimization is another way connected vehicle or telematics data can be used to boost your fleet’s efficiency. One example is deploying resources following storm events. Managers can assess the efficiency of their deployed resources by reviewing how many trucks were out and how long they were in each location removing snow or clearing tree limbs and storm drains. The data can inform decisions for future events and support the argument for increasing resources if needed.
The most important considerations generally involve improving safety and reducing costs, which go hand-in-hand. A close second is environmental consciousness, particularly in organizations that have made sustainability a priority or have ESG goals. Electric vehicle sales are increasing, makes and models are expanding as battery costs go down and charging infrastructure improves. However, if EVs are not part of your plan yet or you have vehicle types that have yet to be electrified, even minor changes in driver behavior can achieve significant reductions in fuel consumption and carbon emissions. According to the EPA, “smart driving” can improve fuel efficiency by more than 30 percent. Simple changes such as keeping a steady speed between traffic lights, using cruise control on the highway and shutting engines off when standing for more than five minutes, can have a considerable financial and environmental impact across a fleet. Proper maintenance can improve those carbon footprint numbers even more. A faulty oxygen sensor alone can cause a 40 percent decrease in fuel efficiency.Achieving sustainability goals requires buy-in by the drivers themselves and the organization as a whole. Armed with data such as acceleration, hard stops, and idling times, managers can work with drivers to modify behaviors and follow their progress. Fleet management systems can produce reports that track and quantify the results, giving agencies the opportunity to reward employees and publicize successful sustainability effort
The ability to collect data, analyze that data and distill it down to provide a true picture of total cost of ownership and identify trends (both good and bad), is essential for determining where there is room for improvement and cost savings. The analysis that comes from vehicle and driver behavior data collection should guide the path that organizations take, and fleet management solution providers should work with their clients to customize the systems to best meet organizations’ particular needs. An integrated fleet management system delivers diagnostics information to managers’ desktops much like a driver sees a “Check Engine” light. In addition to measuring maintenance scheduled based on mileage, these sophisticated systems monitor engine run times so routine upkeep like fluid and filter changes are more timely, drivers can be reminded to optimize tire pressure, and other potential issues can be addressed quickly before breakdowns occur.
Data from any of the efforts listed above will be just numbers on a page unless it is used in context of your organization to inform decision-making and drive change. Here are a few steps you can take to ensure you move from merely gathering data to acting on information: Set Your Goals: Deciding what data is most important will ultimately be driven by your organization’s goals. For example, if reducing speeding is a focus, data points such as miles per hour over the limit and number of speeding incidents will be critical. Once you’ve determined areas of focus, you can narrow in on how to drive the most meaningful impacts. Run a Benchmark Period: Prior to rolling out a new program to the whole fleet, a small launch can be run for 60-90 days to gather initial data and better understand areas of opportunity. This data will essentially reveal your fleet’s “baseline.” Once you have benchmark numbers, you will be able to accurately gauge which policy changes and driver programs generate measurable change. Track Performance with Scorecards: One of the most impactful ways to translate telematics data into action is through scorecards. Driver scorecards present information about key performance indicators, such as idling, speeding, harsh cornering, or harsh braking, to encourage changes in driver behavior. How each company integrates scorecards is heavily dependent on culture.
The day-to-day tasks of keeping vehicles on the road quickly add up. Today’s fleet managers often wear many hats and juggle competing demands. Working with a fleet management partner can help you outsource some fleet administration, such as license and title processing, toll management, and violations management. Fleet management companies also typically offer platforms that can help you streamline and automate tasks such as personal use and exception alert reporting. Finally, they can offer consulting expertise to help analyze your total cost of ownership and discover opportunities for improvement in your fleet data.
re-posted from Automotive Fleet by Merchants Fleet
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