#1 Reduce the size of the fleet
Arguably the fastest way to save on fleet costs is to make your fleet smaller. Yes, obviously, with fewer vehicles your aggregate total cost of ownership figure is going to be significantly reduced. For the most part, New Zealand fleets are typically in the small to medium number range, so merely shedding vehicles is only half the concept. Analysing the roles of the remaining vehicles through a vehicle utilisation exercise will ensure greater efficiencies can be realised. It is likely the remaining individual vehicles’ operating costs will increase as a result, but the overall fleet costs will decrease.
#2 Travel fewer kilometres
Logically, the less kms your fleet is doing, the more you’ll save. The key is not necessarily to reduce overall mileage, but to eliminate unnecessary mileage, which means monitoring fleet movements. Can every trip a vehicle makes be recorded against a business justification? If not, these are the trips that will be costing your company. A cavalier attitude on the part of management in regards driver territory, sales and service trips in relation to time and mileage will have a significantly negative effect on fleet costs. Investigate the application of Gps/telematics and make your drivers aware that mileage audits are being put in place, possibly with an incentive for them to improve their own performance.
#3 Improve fuel efficiency
We’re not suggesting you start blending fuel with ethanol at your factory or office building. What we are suggesting is that greater awareness be put on selecting the most fuel-efficient vehicles for the fleet, while also ensuring they are fit-for-purpose. This means being aware of what vehicles are being used and what they are being used for. Does that sales rep need a double cab ute with all the latest bells and whistles or will a hatchback be better suited to the role? Does the hybrid vehicle make sense or is a diesel a better option? Is the CVT transmission better than an eight or nine speed automatic? And how responsible are your drivers when it comes to fuel efficiency?
#4 Reduce lifecycle costs
Reducing a fleet’s lifecycle cost sounds challenging, but in fact, all that needs to be challenged is the traditional mindset that frequent vehicle replacement is an unnecessary expense. In fact, retaining vehicles beyond an economicallydetermined point of replacement is going to result in greater costs over the long term, with reduced efficiency, increased maintenance costs and the ongoing use of older technology taking their toll. Identifying key characteristics of new vehicle costs, projected resale value, fuel and associated costs (RUC’S and/or hybrid battery life), a planned repair and maintenance programme and conforming to an optimised replacement schedule (often considerably sooner than one might assume) can reap significant fleet cost savings.
#5 Lower crash costs
Any assessment of vehicles used in the workplace must incorporate the element of safety, and when looking at reducing fleet costs, it would be the very reckless company which marginalised this consideration. No company can afford to cut costs when it comes to ensuring the safety of its vehicle operators or drivers, but with a management driven focus, a successful company safety programme is an effective tool in reducing crash – and therefore, fleet – costs. From a dollar only perspective, crash costs translate directly into lost profit, with the formula for computation being the total costs associated with fleet crashes divided by the company’s operating profit margin, to reveal what additional sales revenue will have to be made to replace the lost profit resulting from accidents. This formula will highlight how critical a safety management programme that reduces or eliminates accidents truly is, benefitting everyone in the company.