Take control of your fleet's total cost of ownership
October 13, 2023
3 minutes
Ready to unlock the secrets of successful fleet cost management? Steering fleet operating spend in the right direction is critical in the dynamic fleet management realm. This blog will equip you with strategies and tactics to conquer fleet cost management and improve overall fleet operations.
Decoding fleet cost structure
Fleet management costs can be intricate; hence, it's crucial to focus on the largest expenditure items for maximum cost savings. Recent statistics show that over 80% of fleet expenses are due to depreciation, fuel, and maintenance costs. Knowing these cost categories and their influence on your fleet's total cost of ownership (TCO) allows for prudent decisions to optimize spending.
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Net Depreciation: Outside elements like interest rates, inflation, and OEM inventory levels alter vehicle prices. You can't control these things, but you can choose vehicles, usage, finances, and partnerships to reduce depreciation costs.
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Fuel: Global events and world oil supply affect fuel prices. You can save fuel consumption by choosing fuel-efficient cars, using telematics to analyze driver behavior, and promoting eco-friendly driving techniques.
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Maintenance: Routine maintenance and repairs, warranty usage, routine inspections, and timely vehicle replacements all help to curb maintenance costs. Additionally, partnering with top-of-the-line suppliers and formulating a vehicle downtime plan can diminish expenditures.
Navigating current trends and projections
Being up-to-date with market trends and future projections is crucial for fleet cost management. Here's what you should know:
- Net Depreciation: New vehicle prices and upfitting costs have increased because of allocation problems, shortages, and supply chain disruptions. OEM union strikes could have further implications on costs, vehicle, and parts availability. For up-to-date information from the OEMs and unions visit Element's Operations Alert and Response Center. To effectively address these fleet demands, collaborate with OEM representatives and implement advanced planning.
- Fuel: Geopolitical tensions and global oil supply limitations have pushed fuel prices higher. Forecasts indicate that prices will continue to rise before experiencing a dip later in the year. Eco-driving promotion, fleet management software, and telematics solutions can help counter fuel costs through driver behavior analytics and more.
- Maintenance: Fleet maintenance costs are increasing due to factors such as rising part costs, higher hourly rates, and labor shortages. This requires a greater emphasis on routine preventative maintenance (PM) to achieve optimal total cost of ownership. Engage trusted maintenance vendors for negotiated repairs, better PM record-keeping and the ability to manage warranty situations.
Did you know?
- 88% of fleet managers worry about increasing costs, emphasizing the need for effective cost management strategies.
- Telematics is becoming popular in the fleet industry. 75% of leaders are using or thinking about using it to improve fuel usage, route planning and driver behavior.
- The transition towards more sustainable fleets is well underway. A significant 59% of respondents have initiated the adoption of fleet electric vehicles.
Embrace action: Download the TCO booklet now
Deepen your understanding of fleet cost management and unlock more insights: download our in-depth TCO booklet today. Discover the latest analyses of cost categories, effective strategies to influence vital fleet costs, and updates on current cost trends. By adopting these cost strategies, you'll transform your fleet's TCO, profoundly impacting your company's bottom line for the short term and long run.
Total Cost of Ownership Booklet
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