The benefits of owning a fleet are well-known. There is the opportunity to save money on fuel, vehicle maintenance, and insurance premiums by taking advantage of economies of scale. But what about the challenges? Today’s fleets are complicated beasts with many moving parts that you must manage efficiently for them to work as intended. Here are some tips for cutting costs and optimizing fleet efficiency so you can squeeze all the profit out of your business.
Reducing The Fleet Size
It sounds counter-intuitive, but the best way to cut costs is to reduce how many vehicles you have. By reducing the fleet size, you can take advantage of economies of scale and enjoy a smaller maintenance bill and lower insurance premiums thanks to better risk management. This strategy works particularly well with commercial fleets, where one vehicle would handle multiple roles.
Then, if the business starts to grow again, you can always increase your fleet size, so you have more vehicles available at once. But for now, this is an easy way to save some money without compromising service levels or performance.
Lease the Fleets
Another way to cut costs is by leasing the fleets instead of buying them. This strategy works particularly well for business owners who want a more flexible approach or those with limited capital resources. Fleet companies can do this through a novated lease. You might be asking what is a novated lease and how it can benefit your business. This is where the business owner leases his vehicles through a finance company. The monthly payments are then made to both parties, meaning that there is no direct cost for the fleet-owning business.
This method also allows businesses with limited capital resources or those who don’t want large debts to take advantage of economies of scale without being tied down by fixed costs.
Lower the Fuel Cost
Fleet managers are always looking for ways to get better fuel efficiency out of their vehicles, but the cost of gas is also a significant factor. A great way to cut costs without affecting performance or service levels is by changing driving habits and routes to use less fuel.
For example, stopping at red lights wastes time and prevents smooth acceleration. A better way to do this is by accelerating as soon as the traffic light turns green. This doesn’t just cut down on fuel costs, it also increases safety and reduces CO² emissions. Plus, fleet managers should ensure that vehicles are running at peak efficiency before drivers take them out for a spin.
Lower Maintenance Costs
Another high cost for many businesses is vehicle maintenance. Not only do vehicles require regular oil changes and tire replacements, but they also have to be properly serviced every so often. This means that fleet managers need to schedule employees’ shifts accordingly so there are always enough mechanics on hand when required, or else the business will suffer expensive downtime or high labor costs.
In addition to this, fleet managers need to make sure that they buy the right parts for their vehicles. There is no point in spending a lot of money on high-end parts only to have them wear out quickly and require replacement sooner rather than later. By sticking with affordable but reliable brands, business owners can maintain service levels without breaking the bank.
These are just some ways that fleet-owning businesses can cut costs and operate more efficiently, but there is always room for improvement when it comes to operational efficiency. Ensure to follow these tips and others more to get more profit for your fleet business.