A Q&A with Santa, and Fleet Manager Mrs Claus, of North Pole Inc
We’ll start with little story about a big fleet. Earlier this April, the Los Angeles Police Department (LAPD) introduced a couple of valuable cost-reduction initiatives based on their own fleet use. Last year, the LAPD saw a 13% increase in fleet costs, according to POLICE Magazine.
The increase was attributed to parts and labor costs, including a significant increase in engine oil, tires and overall maintenance prices. An increase in the cost of raw materials rose; this affected the price of expensive vehicle parts, such as tires. The organization’s fleet costs averaged out to 56 new parts per vehicle, which was a slight increase from the year before. In addition, the agency was plagued by older vehicles that outlived their warranties. As the vehicles began depreciating, repair was needed on more expensive items. In turn, this significantly affected fleet operating costs for the police department.
And then there were factors out of their control, like gas prices. The LAPD’s fuel costs increased about 50 cents per gallon last year. The organization knew they needed to implement change; they quickly made alterations to their fleet operations. The agency is now investing in new patrol cars with increased mileage and updating its preventive maintenance programs to help reduce overall labor costs.
As the year begins to come to a close, let this story act as a parable. Here are some quick ways to systemically reduce your own company’s fleet costs:
1. Research alternative financing options.
2. Thoroughly review parts contracts.
3. Eliminate vehicles that provide little value to the company. They will cost you royally in the long-run.
4. Make realistic ROI fleet projections. Research how your business performs against your initial benchmarks. Make adjustments accordingly.
5. Find ways to pay less for the goods and services you purchase (such as part costs and maintenance and repair services).
6. Increase operational efficiency by increasing the visibility of those costs (through KPI reports, for example).
7. Make more informed decisions about fleet resources, management and accountability.
8. Safety Analytics software will help minimize risk, cut fuel costs, reduce wear-and-tear, increase vehicle maintenance intervals, and improve driver safety.
9. Implement a driver incentive or rewards program will promote better driving behavior and reduce fuel consumption.
10. Utilize fleet intelligence solutions to stay informed about fuel usage, operational costs and safety information.