Managing a fleet is no small endeavor, especially when it comes to your company’s bottom line. Without total operational efficiency you’re leaving your business vulnerable to a variety of potential problems that can affect your budget and end up costing you more in overhead and other related expenses. Vehicles that aren’t working properly or always breaking down, unhappy drivers, poor planning of routes, keeping more vehicles than is necessary, and, of course rising fuel prices, are just some of the severely impactful ways that your business can be negatively affected. Learning how to manage your vehicles and drivers with an eye on limiting your company’s operating expenses is absolutely critical for the success of any business, small and large.
Don’t spend more than you need on running your fleet, identifying bloat and eliminating it will keep your bottom line in check and make your operation run a lot more smoothly all the way down the line. Here are just some of the areas that you might need to address with your fleet in the hopes that you can tighten up your efficiency and keep you from losing revenue.
Auditing Your Costs
Taking stock of your efficiency begins with conducting a full audit of your fleet’s operating costs. That means setting a baseline for all fleet-related expenses and conducting a side-by-side comparison of how much you’re spending versus what you could be spending after you implement any changes from fuel to maintenance, to standard, routine operating costs. Once you’ve analyzed all of the expenditures that are part of your business routine, you can begin to point towards the areas where you are allocating too much of your company funds, which can be detrimental to your bottom line.
Lower Operating Expenses
Any fleet is going to be subject to basic obligatory operating expenditures that are just part of doing business. These will typically include fuel costs, vehicle maintenance expenses, insurance premiums, driver wages, and so on. But just because these expenses are altogether unavoidable doesn’t mean you must pay more than is rightfully necessary.
You can find ways to improve your bottom line by looking at your operating costs from a different point of view – breaking them down to the simplest level on an average per mile. Looking at your costs from that stand point can help you make decisions that can affect your company’s spending on fleet business. If the cost is too high for transportation using your own drivers, you may want to explore hiring outside couriers and delivery companies to move your shipments from one destination to the next.
As we’ve determined already, fuel is one of your most critical operating expenses. So the best way to improve your bottom line is through managing that resource in the most cost-efficient manner available. It starts with assigning certain rules and policies for your drivers in a company-wide mandate that establish how fuel should be utilized and, more importantly, how it should be paid for. Many companies looking to keep more money in their coffers will turn to fleet gas cards as a way to stay on top of their fuel expenses.
These cards can be beneficial all around, reducing the volume of paperwork that must be completed by company personnel and eliminating costly drains on your revenue streams that can come with unauthorized spending and other purchases made at the fuel pump. Fleet fuel cards can literally rein in spending by putting limits on how much can be spent and restricting purchases to things such as fuel, motor oil, and various essentials that are needed to keep your fleet moving. These cards can also provide you with discounts and offer bonus rewards to drivers.
One of the other effective ways to watch your company’s bottom line is to take stock of the vehicles in your fleet and decide if any of them should be purged from the inventory. Businesses don’t even realize that they are losing money simply because they have too many vehicles that aren’t producing any revenue. But you also need to be careful that you aren’t overtaxing your fleet by forcing fewer vehicles to take on the same volume of routes.
It takes a keen fleet manager to know when he or she has too many vehicles on-site that aren’t meeting quotas or assignment criteria because they are outdated or being singled out as surplus options in case another vehicle breaks down. It’s possible these vehicles can be used for other purposes within the organization that is also costing you money. Turn them into company cars instead of offering gas and mileage reimbursements to employees who use their own cars and trucks for company business.