Fleet Management Cost Savings: 5 Smart Strategies to Implement Today
It’s Tax Day. No doubt you’ve been busy crunching numbers, chasing receipts, scrutinizing expenses, tallying up deductions, and reviewing the operational budget. And it’s all worth it.
A smart tax strategy can save you thousands.
But if maximizing savings is the goal, you need to think beyond April. Make cutting costs and smart spending a year-round priority. With proven strategies, you can cut waste, improve efficiencies, keep your budget on track, and drive growth to your bottom line.
Here are five fleet management cost-saving strategies to get you started.
Make Preventive Maintenance a Priority
Preventive maintenance is all about preventing problems, not fixing them. It’s one of the most effective ways to avoid costly breakdowns and repairs while ensuring you get top dollar when it’s time to sell or trade-in a vehicle.
Preventive maintenance covers all routine checks, services, and replacements, including:
- Oil and filter changes
- Tire rotation and inspection
- Brake inspection and replacement
- Transmission fluid checks
- Battery testing and replacement
- Lights, wipers, and horn checks
- Cooling system maintenance
- Suspension and steering inspections
- Exhaust system checks
With a well-maintained fleet, vehicles run longer and more efficiently without interruptions impacting fleet operations.
Learn how to create an effective maintenance program here.
Maximize Fuel Efficiency
Fuel is one of the largest fleet costs for most fleet operators. Yet, fuel-efficient practices are often overlooked. Simple changes can lead to significant savings and include:
- Driver training programs backed by monitoring technology and focused on efficient driving techniques, such as avoiding harsh braking, rapid acceleration, excessive idling, and speeding.
- Route optimization technology to cut unnecessary mileage. GPS tracking and fleet management software can help you avoid road closures, road construction, and traffic bottlenecks, making routes safer and more efficient.
- Maintaining proper tire pressure since underinflated tires are budget busters. Even a slight drop in tire pressure can reduce fuel efficiency. Instruct drivers to check tire pressure frequently and consider investing in tire-pressure monitoring systems that provide real-time data to you and your drivers. The upfront investment will pay off quickly in fuel savings, extended tire life, and lower risk of blowouts.
Diesel Hedging and Swaps
Fuel prices are unpredictable. They can remain stable for weeks, then suddenly spike overnight — making budgeting and cost control challenging.
Diesel hedging can help you manage fuel cost fluctuations, stabilize budgets, and protect your bottom line from price volatility. It’s a financial strategy that locks in fuel prices for a predetermined period using financial instruments such as swaps.
A swap is a contract between a fleet operator and their fuel provider or financial institution. It sets a fixed price for an exact volume of diesel fuel over a specified period. Whether the price rises or falls during that period, you pay the price agreed upon in the contract.
Diesel hedging is not without risk, especially if fuel prices drop significantly. So, it’s a good idea to talk with your fuel provider or financial institution about whether diesel hedging and swaps would benefit your operations and provide these advantages:
- Predictable Budgeting: You’ll know your fuel costs ahead of time, making forecasting, budgeting, and long-term planning more predictable.
- Protection Against Market Volatility: When fuel prices spike, you’re covered, and your operations are protected.
- A Competitive Advantage: With stable fuel prices, you can offer consistent pricing to your customers.
We go more in-depth into what you should know about diesel hedging and swaps here.
Fleet Optimization
Think it’s just vehicles on the road that cost you money? The ones sitting in the lot do too. Whether it’s insurance, registration, depreciation, or merely taking up space, unused and underutilized vehicles drain capital.
Optimizing your fleet is a smart fleet management cost-savings strategy to implement. Doing so can make your fleet leaner and more efficient, saving you money. Here’s how:
- Track Vehicle Utilization Metrics: Use telematics or fleet management software to track metrics such as mileage, engine hours, idle time, and job assignments. The data collected will give you visibility into which vehicles are pulling their weight and which are sitting idle or underused.
- Reassign or Sell Underused Vehicles: If a vehicle is underutilized, reassign it to a high-demand area. If it’s collecting dust consistently, sell it and reallocate funds where needed.
- Conduct Asset Reviews: Every few months, review fleet composition to determine if you have the right mix of vehicles for your operations. Don’t keep more than you need. Downsizing your fleet to match demand helps control fleet costs.
- Analyze Total Cost of Ownership: Evaluate fuel efficiency, reliability, maintenance frequency, insurance costs, and resale value to determine which vehicles deliver ROI.
Choose Reliable Vendors
A strong relationship with a reliable and trusted partner can go a long way in ensuring long-term goals are met while saving you money along the way.
On top of consistently providing quality products and services, reliable vendors offer:
- Faster turnaround times for goods and services for less downtime and keeping schedules on track.
- Negotiated pricing, bulk discounts, or service agreements to help you control costs and improve budget planning.
- Accountability by standing by their work and products, resolving any issues quickly and transparently.
- Industry knowledge and insight to help you achieve fleet management cost savings and improve efficiency and safety.
- Scalability to adapt to your needs as your fleet grows or changes.
Read our guide on how to collaborate with the right fueling partner to improve your business.