It is not an easy job to manage a large fleet of vehicles. It does not matter if it is a transportation company, a truck firm, or a fleet of buses for school. It can be a complicated problem. There are a lot of decisions to be made. But what we will cover in this article is both efficiency of your fleet and how to reduce costs. To do so, you will need a lot of knowledge and tools at your disposal. Luckily, some places can help you with everything, so maybe check out Mobilizz if you require assistance. Without further ado, here are some pieces of advice on how to maximize your profits.
1. Smaller fleet
Probably the most obvious way to cut the costs of your operations is to reduce the size of your fleet. Decreasing the number of your vehicles will cut the losses, but will also increase the maintenance and operations cost of the rest of your fleet. Nevertheless, there will be a net decrease in your expenses. There is only one question left. Can your workload handle the cuts? Can you still do all of your operations with fewer vehicles? If yes, you found a way of reducing costs.
2. The vehicles themselves
Having smaller and lighter vehicles can also increase your profit. The crucial question here is to comprehend the task of your fleet. Once you know what kind of vehicles you need for your operations, you can proceed with managing them. Without awareness of both your operations’ goals and the automobile industry, you will have a hard time in your task. But with these two, you can advance with downgrading models, engines, and whatever else you deem necessary.
3. Cut the miles
The mileage of your fleet is something you cannot fully regulate. Sometimes paths are decided by someone else, or your workers are already utilizing the best possible one. Nevertheless, there are perhaps personal detours or similar trips. Maybe try to find them and manage them. Furthermore, advancements in technology are on our side. GPS and similar programs can shorter the route or help your drivers in a new environment.
4. Management system
The fleet management system can considerably help your drivers in their work. Practices of your driver can affect fuel consumption by over 30%. That is why it is so critical to have driver training and education available to your employees. The way they accelerate, variable speeds, too much air conditioning, braking in a wrong manner, these are all some of the potential problems. These systems of additional training demand cooperation of both managers and drivers, to give good results.
5. Fuel management
One of the largest expenses you have in your operation is likely to be fuel management. Fuel prices are something you should heed, but you should not solely rely on that knowledge. Be prepared for eventual changes in prices and have fuel management programs active always. You should constantly try to procure fuel-efficient technologies such as fuel cards or fuel cards for small businesses if you’re a smaller business, as well as extra transmission gears, maybe as much as ten speeds. Your work does not stop if fuel prices are stable, or even at a record low.
6. Replacing old with new
It is not uncommon for many companies to keep and use vehicles even if they are past their prime. By trying to save many and avoiding replacing older with newer models, you can lose profit. Transports that are too old have way higher maintenance costs, greater fuel expenditure, and generally smaller utilization. While it demands a starting capital to buy new vehicles, it is a short term loss, but a long term profit. Keeping older vehicles will have contrary effects. So it is essential to properly assess your situation and see what your plan of action should be.
7. Prices of new assets
One of the most significant parts of a manager’s job is acquiring new vehicles. Getting a good deal and finding transportations of the best possible quality is essential to managing your expenses. It would be wrong to assume that the cheapest solution is the best one. You should take into consideration the lifecycle of that new asset, as well as potential resell value. Obtaining good relations with automobile vendors or factories can prove of benefit to you. The longer you work together, the better discounts you will be able to obtain.
8. Reselling at right price
As we mentioned, it is vital to resell your vehicles at the right moment. Selling them before they pass their prime can give you back most of your investment after you have already profited on them for a while. A good tip to ensure you can effortlessly sell them is to have vehicles in neutral colors, such as white. An excellent approach is to be in touch with car auctions and market, understanding prices on the market, and having connections is vital for your success. Also, keep in mind that quite often your workers are interested in buying vehicles they were driving.
9. Accidents happen
Accidents on the road can put your vehicles temporarily out of work. That can make them one of your main reasons for inefficiency and loss of profit. Some statistic says that business drivers are more likely to have an accident than private ones. But what is interesting is that most of these incidents happen in clear weather, when our drivers are relaxed and are not expecting any problems. So this is another area where you can help your workers prepare better.
10. Overhead costs
Last but not least are overhead costs. These are the cost of management and administrative staff, software, utilities, taxes, and everything else that is not connected to the vehicles. These, of course, should not be neglected, and also need your attention, since they provide many an opportunity for cutting expenses.
There is one more point to be made, although this is more of a culture. Even when everything is going smooth in your operations and all is going like a well-oiled machine. It is a good idea to go for continual improvements. It doesn’t matter if it is something connected to the fleet itself or any other part of your job.