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It is quite interesting, to address the intricacies involved in becoming a “good” taxi driver or any fleet driver. Fleet managers are taking leaps toward ensuring an organised schedule for drivers’ daily routes to reduce labour costs and increase efficiency.
The key to effective fleet management is to soak up all it has to offer. Not only is it an asset for fleet managers, but it can be used to reduce costs in all areas of the business, including labour costs.
At the end of the day, the goal of any business is to reduce overheads and let the profits hail.
Before we get into how to reduce costs in fleet management, ensuring work efficiency is the first step.
How can you improve fleet management for better work efficiency?
A lot goes into fleet management, you’ve got expenses to control, vehicles to maintain, and staff to keep safe and productive. For fleet managers to stay on budget and keep their operation on the roll, they need to make their fleet operate as efficiently as possible. They can use telematics technology to address factors that contribute to fleet efficiency.
Cartrack’s telematics and software solutions can assist in bringing fleet requirements to life. Let’s start with the basics and then move towards how you can further improve your fleet efficiency.
What are the key elements of effective fleet management?
GPS vehicle tracking. The GPS tracking device is essential for a GPS vehicle tracking and fleet management system. Once these devices are in your fleet, you can access the real-time location and movement of your vehicles on the go.
Gain control of your fleet. The data you receive from your vehicle’s movement will help you get to grips with your fleet. To do this, you can use it to create route and job planning, maintenance scheduling, cost structure, and much more.
Driver analysis and training. The best fleet systems will have a feature to monitor and measure driving behaviour. Identify activities such as acceleration, harsh braking, speeding, and over idling, among others.
Have an experienced fleet manager. What is an ideal fleet manager? Even if you have a slick system in place, the fleet manager is the ‘driver’ of the operation, with numerous duties to uphold. He or she should have the ability to multitask, have enough experience to grasp the data, as well as be excellent communicators, results-oriented, and used to managing teams.
5 ways to improve fleet efficiency
Assess risks and insurance costs.
Many insurance companies give discounts to businesses that implement fleet management software. Their risk profile will immediately go down. Why? The vehicle reports from the platform help companies assess risks such as behavioural trends, thereby preventing potential incidents. GPS tracking also increases the likelihood of the vehicles being recovered if stolen.
The system’s data is also useful to lower costs associated with accidents or other legal claims due to improved response times. Avoid escalating costs caused by late notification of a potential loss. By reducing risks, the fleet will also operate more effectively.
Since your fleet is a necessity to your business, they need to be kept in good condition to prevent breakdowns and accidents, which could disrupt operations. For more efficiency, receive real-time alerts of any engine faults, worn brake pads, oil and water fluctuations, and other diagnostics, helping you pre-empt which vehicles need servicing. You can use this to instantly respond to maintenance needs in real-time, thereby preventing big breakdowns which will cut maintenance costs and increase
vehicle lifespan in the long run. Also keep your drivers safe, which will assist with labour retention.
Track asset usage.
Keep a check on the way your assets are being utilised. For example, assess distance travelled or engine hours to ensure they aren’t crossing the usage threshold. If so, other vehicles may need to be deployed. Assets within the vehicle can also be tracked, for managers to gain insights into how they are being used. Devices are installed with specialised sensors which transfer data to the system, subsequently alerting you when assets and machinery require servicing.
As fuel is one of the company’s biggest expenses, managers should know their fleet vehicle’s fuel levels in real-time and track all fuel consumption and refills. They can predict fuel risks resulting in the business spending less time on admin and validating fraud possibilities much faster.
Operational costs and budgets.
The system has easy-to-use administrative and vehicle cost accounting software that can be used to efficiently manage your fleet, drivers, and related operational costs. The platform serves as a “private fleet accountant.”
Fleet management costs uncovered
The operational efficiency resulting from consistent fleet management creates cost-saving opportunities.
According to Descartes, fuel and labour are the fleet manager’s top two operating expenses. Fuel prices are uncontrollable, and as fuel costs rise, profits will also diminish. To soften the blow of fuel costs, fleet managers need to find efficiencies in other areas of the operation. Efficient routes result in reduced overall fleet fuel consumption and operating costs.
When it comes to reducing labour costs, ethical staff and recruitment procedures are a necessary part of fleet cost management.
How does fleet management reduce labour costs?
Due to proper route planning, your drivers’ lives will be enhanced as drive time will be allocated efficiently, resulting in increased driver retention and staff satisfaction.
They will also be able to get more jobs done in less time, so the company won’t need to spend more money on hiring more staff, therefore reducing labour costs significantly.
The reason is that there are lower turnover costs when you hire the right person. When your hiring process is inefficient, this could lead to wasted payroll and a decrease in sales. You could be losing upwards of 25 percent of the annual salary for the role you’re attempting to fill. Hiring the most qualified candidates from the start means new employees are better able to hit the ground running and begin making valuable contributions.
The communication channel within a fleet management platform offers real-time data exchange with the driver, while the trip is in progress. There is a continuous cycle of feedback and communication within the business structure, empowering drivers in the process because they feel independent and trusted.
When there is order in the recruitment process and overall organisation in the company, staff are hired strategically and the right ones for that matter. Unnecessary staff are not hired which allows for more focus on current staff to develop, while creating room for them to be incentivised.
The platform gives an overview of driver activities, creating opportunities to strategise and make tweaks where necessary. In the case of taxi services, shared routes and route planning can be implemented to avoid empty seats in each car. If seats are filled, fewer vehicles and staff will be needed thus reducing labour costs. Perhaps it makes more sense for certain drivers to work in specific areas within a certain time.
8 ways to reduce fleet management costs
Compare company fuel cards
In terms of refilling your fleet vehicles, drivers should use a company fuel card as it is easier to track spending with the reports it offers. You can research the cards available carefully which sometimes come with benefits to attract your business, and look for those that offer discounts at certain fuel stores.
While this can reduce your fleet’s number of breakdowns while driving, you don’t need to necessarily service your vehicle every 3,000 miles. Especially newer vehicles can last longer between oil changes. By extending the time between oil changes, you can save money, but if you wait too long between services, your vehicles could cause costly problems. Your vehicles should not go further than 7,000 miles before receiving preventative maintenance.
Fuel efficient driving methods
One of the most crucial parts of your fleet’s fuel economy is your driver’s driving patterns. Encourage each driver to engage in proper driving habits that help reduce fuel mileage, and most importantly, discourage aggressive driving.
Drop unnecessary vehicles
Cutting your fleet size can save thousands over the life of the vehicles. If you have- underutilised trucks, consider removing them from your fleet to decrease fleet spending. If you can’t get rid of any fleet vehicles, see if some routes could double up, where drivers could potentially share a vehicle. Overall, you can expect to lower total ownership costs by at least five percent.
Decrease unnecessary mileage on fleet vehicles by combining trips and improving the efficiency of multi-stop vehicles. Through route planning, assess routes resulting in less mileage being driven and implement that throughout the fleet.
Check tyre pressure
One should not underestimate the effect tyre pressure has on fleet vehicle costs and fuel economy. According to experts, for every one psi (unit of pressure) you have in a vehicle’s tires below the recommended value, fuel efficiency drops by 0.2%. This all adds up, especially when managing a large fleet. By maintaining the manufacturer’s recommended tyre pressure, fuel efficiency will be improved up to three percent.
Another consideration is that climate temperature levels will increase or decrease tyre pressure. As a result, your fleet’s tyres need to be checked daily because cold temperatures will drop the pressure, while hot temperatures will raise it. Vehicles should have tyre pressure gauges.
Reduce idle time
Idling can significantly reduce your fleet’s total fuel efficiency. For more than one minute, a driver should turn off the engine to prevent needless idling. On a 100-mile trip, 30 minutes of idling in traffic, at lights, or in a parking lot, can decrease fuel efficiency by one-third.
Add newer vehicles to your fleet
It is recommended to choose newer vehicle models when replacing vehicles in your fleet. They have lower mileage on them and even more importantly, have better fuel efficiency than those made years ago.
In just the last five years, the average fuel economy across all manufacturers increased from 23.6 mpg to 24.9 mpg (miles per gallon).
In addition to the improvement of fuel efficiency, manufacturers have found ways to maintain the weight of their vehicles and still increase their power. This is beneficial for hard-working vehicles that may require extra power for hauling tools and equipment.
We understand that ensuring driver productivity is a way to reduce labour and fleet costs. There are more steps a fleet manager can take to supplement this:
Promote positive driving habits
We have touched on driver empowerment and how communication between drivers and the manager is important. Managers can empower drivers further by encouraging them to have good driving behaviours, and making them aware of any driving faults. They will have the opportunity to fine-tune their skills further to become better drivers overall.
Without fleet management technology, distracted driving would be difficult to monitor, and may go unnoticed leading to accidents.
Managers need to create a non-threatening environment creating a space for drivers to perform better, ultimately leading to increased productivity.
Create coaching opportunities for drivers
The software promotes positive driving habits through the data it provides. It also creates an opportunity to coach drivers internally, through the reporting feature which offers feedback and daily performance reports.
The more advanced systems use artificial intelligence to coach drivers in real time. This ensures that drivers are aware of their errors and how to rectify them while driving. It also ensures that employees can understand these errors and issues without feeling targeted by a manager.
Cartrack’s smart cameras give drivers visibility of their blind spots and alert them in real time via audio of any danger or issues.
Improving drivers’ working conditions
According to global experts, the transportation industry is facing a major driver shortage, projected to hit 160,000 by 2028. One of the reasons is the lack of motivation and a positive work environment at some companies.
Poor management, communication, and criticism without any backing can create a hostile work environment even for the best-performing drivers. Fleet management software addresses these gaps.
Managers are offered a more efficient and accurate way to monitor and communicate with their drivers. Driver performance data enables them to make the best decisions for their fleets, limiting any assumptions. These are driven by evidence and feedback, motivating the driver to be more productive.
Every fleet business involves a ton of labour. Reduce fleet management costs and install fleet efficiency measures to get more for your buck. Get in touch with Cartrack today for all your fleet needs.
The weekend just went by and most of my weekends include a lot of networking. In such networking events conversations start about anything from current affairs