Today’s Fleets Must Find Innovative Ways to Cut Costs

Liron Cohen-YanayMay 16, 2017

Today’s Fleets Must Find Innovative Ways to Cut Costs

By Liron Cohen-Yanay

If you’re a fleet manager, you understand better than anyone how small, seemingly insignificant actions can add up to have major consequences for your company’s bottom line.

Every decision your drivers make while on the road can mean the difference between whether a delivery arrives on time or not. More critically, every decision they make also affects whether they arrive at their destination safely or get into an accident.

These decisions not only impact the health of your drivers, but also the health of your fleet vehicles. When it comes to vehicle health, small actions add up in the same way, and the effects of these actions are particularly easy to observe when you’re managing hundreds or even thousands of vehicles driven daily over the course of many years.

A recent study by Automotive Fleet reported that fleets spent less on vehicle maintenance spending per unit in 2016 as compared to the previous year. But before you celebrate, it’s key to note that spending is still up compared to 2014, and total car operating costs are expected to remain flat for fleets in 2017.

The reason behind this recent reduction in maintenance spending actually lies in an uncontrollable variable for fleets. Many fleets use a unique size of tires for their vehicles, and these tires became more readily available in 2016, driving down the cost of replacing tires by 7 percent.

The study also showed that cost per mile, in terms of total maintenance spend, has been flat for the past three years. Considering improvements in technology that are making it easier to track and predict maintenance needs, one would assume these costs should decrease over time. Fleets are simply not improving their maintenance costs like they should be.

Though technology is making it easier to maintain vehicles before problems arise, the incorporation of advanced driver assistance systems (ADAS) systems and other complex in-vehicle technologies are also ensuring repairs will become more complicated and most likely more costly in the coming years.

What does it all mean for fleets? Fleet-based companies need to start finding innovative ways to reduce their costs now before costs begin to rise. While the technology supporting vehicle maintenance is quickly evolving, there is another factor that companies can immediately begin improving to create rapid cost reductions: driver behavior.

Unsafe driving maneuvers are not only risky in terms of increasing the chance of getting in accidents, they also lead to extra wear and tear on vehicles. While every vehicle experiences some amount of wear and tear each time it hits the road, maneuvers like revving the engine by speeding, taking sharp turns, and slamming on or riding the brakes create additional stress on a vehicle’s engine, transmission, brakes, and tires.

GreenRoad provides real-time, in-vehicle coaching for drivers, alerting them on the safety level of every turn, deceleration, and stop they make, along with hundreds of other maneuvers. When used in combination with top-down company engagement programs, this technology can spur real bottom-line improvements for a company.

Moreover, focusing on driver behavior keeps drivers safer, healthier and happier. It can positively affect other line items at the same time, including insurance rates, and even the costs that come from driver disengagement, like employee turnover and absenteeism.

Maintenance costs may seem comparable to years past, but it’s vital fleets recognize the larger story that’s set to unfold in the coming years. If you don’t have a comprehensive program in place to improve driver behavior over every mile of every trip, look deeper into the opportunities available that can protect your drivers, reduce wear and tear on your fleet, and keep your bottom line trending in the right direction.