Ways to Reduce Fleet Cost
Operating a fleet can be profitable. Most, however, do not perform at their optimum level. There are two ways to improve profitability, increase the revenue or lower the costs. Before raising the revenue, it is important for you to ensure that you are operating efficiently first. By reducing the cost first, you will be sure to get an even bigger profit when you eventually increase the revenue. So, how can one reduce their fleet cost?
Review the fuel policy
Choose a fuel card provider who can deliver efficiency and is affordable too. Ensure that all of your fleets are only fueled at this particular provider using the same products. Some products in the market are known to deliver an extra 2% efficiency which can mean six-figure saving annually. Plan all your journeys so that the drivers know where and when to fuel.
Train your drivers on fuel efficient driving
Your drivers can also help you reduce the cost of fuel. Research by the Energy Savings Trust shows that you can save up to 15% by driving more efficiently. Train and encourage your drivers to practice fuel efficient driving which involves better use of gears, keeping tire pressure at the right level, switching off in a heavy traffic jam among other tricks.
Reduce the overhead cost
That is the cost associated with running the fleet but not directly attributed to the vehicles. It includes management expenses, office expenses among others. Encourage and practice efficient management and operations to reduce these costs.
If possible, outsource functions that you can afford to. That will lower your cost significantly and free up a few employees to focus on the core business. Outsourcing also saves you a lot of time which could be used in other areas. There are many administrative tasks that you can choose to outsource, and there are vehicle management firms out there that offer outsourced administration. Contact them and assess what would be cost effective for you.
Review and improve your workforce
Having a hardworking and dedicated team is important. Get rid of lazy drivers if you cannot make them work hard. Replace drivers who refuse to be efficient. Managers who are not delivering efficiency should also be replaced. Management should not be just routine and reactive. It should be strategic too.
Lower accident costs
Accidents not only cause losses but also downtime which can make you lose out on other opportunities and impact the profitability negatively. Lower the risk and costs associated with accidents by using an accident management company. They help you recover your vehicle, repair it, offer legal assistance, injury claims, and even vehicle replacement. With them, you can channel your efforts in the vehicles still operating when an accident happens knowing that the situation is under control.
When reducing your fleet cost, remember not to compromise on your customer service and standards. Customers are the lifeline of the business, and you need to keep them satisfied at all time. That way, you will keep them, and they might even refer a few others to you eventually making you even more profitable.
Limousine Fuel Consumption and Economy