3 Proven Ways To Decrease Fleet Management Costs

Whether public or private, large or small, every fleet comes with challenges, but controlling the costs is at the heart of every fleets’ survival. Connected vehicle data helps fleets where it matters most – reducing fuel use, lowering labor expenses, savings on cost, time and miles driven. That’s why more and more fleets are using connected vehicle data as an effective tool for managing costs, improving productivity and optimizing performance within limited budgets.

Here are 3 proven strategies that can decrease fleet management costs using embedded vehicle data.

1. Proactive Fuel Management

Fuel is the largest ongoing expense for fleets. Fuel costs can easily drain the operational budget. Fuel costs, on average, make up about 26% of fleet expenditures, according to Frost & Sullivan. Inefficient route planning, road works, traffic congestion, fuel theft, and poor driver behavior are the main contributors to excess fuel expenses. Embedded vehicle data powers fleet management systems with critical, real-time information to better manage fuel expenses:

  • Reduce Miles Traveled

With today’s sophisticated mapping technologies, fleets can identify inefficient routes, plan better routes and reduce the overall distance and/or time to complete a particular route. Improving routing by even a small percentage can make a big impact on reducing fuel usage and costs. Tracking fleet vehicles during their travel, using embedded vehicle data, can not only reduce unnecessary mileage by providing the actual traveled routes, but also discourage excess usage and detours that can occur when drivers are not monitored.

  • Increase Miles Per Gallon

When it comes to reducing fuel costs associated with driver behavior, data is a powerful weapon. A driver’s impact on fuel efficiency can be as much as 33% – hard acceleration, idling, inconsistent speeds, and hard braking are bad driver habits that can be corrected with driver training and/or education. By tracking driving behavior, fleet management systems can identify the key areas that are contributing to inflated fuel costs and inefficiencies, for example:

o   Cutting idle time – Reducing idle time not only lowers fuel wastage, costs and harmful emissions, but also decreases engine wear and tear as well as noise pollution. Embedded vehicle data can help fleet management companies to track idling time and patterns, and take steps to improve them that can save from half a liter to 4 liters per idle hour.

o   Reducing speed – Driving vehicles at high speeds consumes more fuel and may also result in sudden braking. Drivers that are heavy on both the accelerator and brakes are going to have higher fuel consumption rates. Monitoring vehicles’ speed using embedded vehicle data provides the necessary data to coach drivers to adopt slower, safer driving habits.

o   Keeping vehicles in good shape – Well-maintained engines typically use less fuel. Data-based vehicle alerts provide advance warnings of potential troubles that can be fixed before they become unmanageable and prevent maintaining the vehicle’s in top condition.

o   Maintaining proper tire pressure – Under-inflated tires can increase fuel consumption by as much as 15%. Leverage embedded vehicle data to monitor tire pressure and alert the drivers when necessary.

  •  Combat Fraud Attempts

Detecting unauthorized vehicle use can reduce fuel consumption. Embedded vehicle data enables 24×7 location tracking of every fleet vehicle to detect fraud by verifying daily routes and vehicle stops, checking on odd-hours movement, and monitoring behaviors that may indicate unauthorized personal use. Furthermore, tracking fuel levels through embedded vehicle data can help validating fuel expenditures when matched with the time, location and amount of all fuel transactions.

2. Preventative Maintenance

A healthy fleet is a cheaper fleet to operate, and preventative maintenance is still the single most effective way to prevent unexpected roadside breakdowns. Taking a proactive stance on preventative maintenance is one of the best ways to cut fleet costs.

A preventative maintenance plan and schedule ensures your assets are well-maintained by staying on top of regular servicing, oil changes and part replacement. Embedded vehicle data can help you plan ahead with up-to-date data about the miles traveled, residual time for inspection and more. Better maintenance reduces downtime, improves fuel efficiency, lowers overtime caused by unexpected breakdowns and repairs, and more.

Nevertheless, unexpected breakdowns and unplanned maintenance tasks happen. Every time a vehicle breaks down, it’s money down the drain, especially at the roadside. With embedded vehicle data, in-vehicle management systems can monitor real-time alerts to identify minor problems before they become major ones, helping reduce expensive roadside repairs.

Properly maintaining fleet vehicles has a positive impact on their depreciation, which accounts for as much as 40% of the total cost of running a vehicle.

3. Driving Behavior Tracking

Accidents, traffic violations and other risky driver behaviors can also add to fleet operational costs. Fuel costs aside, unsafe driving habits, such as speeding and harsh acceleration/braking increase the engine’s wear and tear, as well as maintenance frequency and costs. Vehicle tracking can help reduce these events and their associated costs by enabling more visibility into what drivers are doing while on the road and provide them with proper feedback.

Embedded vehicle data can be used to trigger automatic alerts, such as when speeding incidents occur, so an immediate corrective action can be taken. Drivers’ behavior reports, generated by fleet management systems can be leveraged in an effective safety program to coach employees, discipline drivers who violate company policies, and incentivize drivers who comply with them. Successful safety programs that provide timely feedback can potentially produce substantial savings by reducing the risk and cost of accidents and injuries and cutting down the cost of insurance premiums through good safety records.

Leverage Connected Vehicle Data to Manage Fleet Costs

Vehicle data, according to Frost & Sullivan, has the capacity to increase productivity by 10-15% and reduce overtime by another 10-15%. It also enables fleets to save about 20-25% on fuel expenses, on average, by promoting better driving practices. And, it helps fleets save 20-30 minutes on daily driving time and decrease fleet management costs.

Having the tools and data in place is paramount to any business. It helps with tracking and managing processes, and leads to better informed decisions. Embedded vehicle data supports in-depth reports, analysis and the decision-making to effectively control costs.

Are you interested in learning more?

To learn more about future proofing fleet management systems with embedded vehicle data download our Fleet Data eBook or speak to a data expert.

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