Fleet management has an influence on all areas of a business, and whether you are transporting people, product or equipment any delays, poor management or waste will add costs the business can’t afford and lead to inefficient processes. In addition to this, fleet management is often seen as a periphery function rather than a core part of the business and hence is allocated a tight budget with little room for manoeuvre, so here are some ways to streamline your fleet management function and make some important cost savings for the bottom line of the business.
Lease vehicles don’t purchase them
This is perhaps the best decision you can make because it saves costs in many different ways. With leasing you pay a single monthly cost which will be lower than any form of finance to purchase the same vehicle, because with leasing you are only paying the cost of depreciation to the leasing company, rather than the cost of ownership. In addition, you won’t have a depreciating asset on your books, you will always be driving brand new vehicles so service & maintenance costs are reduced, there may be no MOT costs if the lease is three years or less, the vehicles will be under warranty and there will be no disposal costs, you simply return the vehicle at the end of the lease and choose another one if you want to.
Maintain the right size of fleet
You need to monitor the utilisation percentage of your fleet to ensure all vehicles are being used sufficiently to justify having them. It could be that you have one or two vehicles which could be purged if you find you don’t need them. More vehicles equals more cost and more management, so keeping a tight rein on your fleet will make it more efficient. This is also where leasing works in your favour, because with a two or three year lease term it is easier to reduce your fleet numbers and you are not stuck with unwanted vehicles which carry a disposal cost.
Avoid compliance costs
Managing your compliance means keeping good records of licences, road tax and insurance in order to avoid fines and costly premiums. This is a relatively simple process but can be costly if you manage it badly.
Accident management
Accidents are inevitable if you have a lot of vehicles doing a lot of miles. If your fleet is regularly involved in accidents this can start to add costs in terms of accident repairs, lost work hours and rising insurance premiums. You need to have procedures in place for accident management and how you react to accidents, in terms of reporting and analysing them, but you can also consider training and review processes in order to educate drivers in an attempt to avoid accidents.
Fuel efficiency
Fuel is obviously one of the biggest costs in fleet management and increasingly this involves the charging of electric vehicles (EVs) too. There are many practices involved in running an EV which can help to make it a more cost-efficient process, but if we consider managing fuel for all types of vehicles, you can look at the following:
- Fuel cards for drivers and for specific service stations and with various savings attached
- Select the most suitable vehicles for certain journeys in order to aid fuel efficiency
- Better route planning to avoid excessive mileage and wasted journeys
- Training for drivers in driving techniques and habits to encourage better fuel efficiency
- Journey planning to ensure a driver can access the most cost-efficient service stations or charging stations.
Outsourcing fleet management
Perhaps the best way to reduce costs is to outsource your fleet management and put it in the hands of the experts. This way you are paying one single cost which is easier to budget for, and will in return receive professional fleet management and have access to knowledge, communications systems and IT softwarewhich can deliver cost savings you perhaps could not achieve yourself with a dedicated in-house fleet manager.
With Total Motion you will receive a high standard of expertise on the back of many years as a sector-leading fleet management service provider, so contact our team today and we can talk about the many benefits Total Motion can bring to your business, as well as the range of cost savings we can deliver to help your bottom line and to streamline your fleet management to help make your business more efficient.
