A Foolproof Way to Control Fleet Costs In the New Year

The new year brings new opportunities and challenges, but one aspect likely to remain the same is that fleet managers need to find ways to keep operating costs as low as possible.

GPS fleet tracking offers several great ways to lower costs dramatically. The biggest expenses for most fleets are fuel and drivers’ wages, at 30% and 26%* respectively. Next, at 22%, comes “other,” a category that includes speeding tickets, parking citations, and other vehicle-issued violations. Insurance and maintenance are 6% and 5% respectively. Depreciation is 10%, and telematics can’t do anything about it, but it can bring the other costs way down. Fuel costs alone can come down 20-30%*.

*Source: Verizon Case Study, “How to Use Telematics To Control Fleet Costs.”  

The best ways to reduce fuel use include obeying the speed limit, reducing idling time, increasing route efficiency, and keeping current on maintenance. GPS fleet software helps with all three. Automatic alarms alert managers when a vehicle goes too fast or idles too long, allowing managers to target training or disciplinary measures on the right people. Alerts also notify managers when small mechanical problems develop, so they can be fixed before they get bigger and more expensive to fix. Real-time GPS tracking makes efficient route planning easier.

Payroll might seem easy to reduce—just pay people less—but lower pay often leads to poorer service and less employee loyalty. In the trucking industry, where there is a persistent shortage of drivers, reducing pay might be a good way to run out of employees. A better approach is to tie driver compensation more closely to performance, so employees have more control over how much money they receive and so that employers get more bang for their buck. GPS fleet software is a great way to do just that, since fleet managers can see who drives well and who does not and can adjust pay accordingly.

Skilled, careful drivers make the road safer, but that is not the only reason to use GPR tracking as a training tool. Another reason is that better drivers get fewer tickets and fines, again bringing costs down. Safer drivers also cost less to insure. While few, if any, insurance companies will offer discounts for tracking alone, but many will look favorably on safety programs that include GPS fleet software. And a favorable view from an insurance company means lower premiums.

Some people might worry that fleet management software will be costly to install and difficult to learn, but over time, these systems pay for themselves and then keep right on paying. Any company that can take advantage of GPS fleet tracking is in a good position to move their company forward into the new year.