Not ideal…but understandably, over time fleet size and composition can easily get out of control. This could be for a number of reasons, including specialised vehicle purchases for one-off projects, changes in management, driver persuasion or choice and lack of an existing or actively used fleet policy. We get it; we see it all the time.
By fully optimising fleet size and composition, fleet managers can potentially downsize where possible, maximise vehicle utilisation and overall save money. Now it may seem odd for a fleet company to suggest de-fleeting as part of the answer, however, our unique business model affords us to be 100% focused on customer outcomes.
Evaluating driver needs and usage for the vehicles are the first steps to take
As a Fleet Manager, it's important to understand how your drivers are currently using the vehicles on the fleet. Most will already have a grasp on this and have established total vehicle numbers in the fleet, the types of vehicles, average kilometres for each (through accurate logbook keeping or GPS tracking), various load sizes and Point of Sale Cargo (POS) and the average fuel use.
A right sizing strategy exercise should evaluate the business case of each vehicle to accurately determine whether the vehicle be replaced or reassigned to a different area, the driver of the vehicle could possibly car share through a rotating schedule or you could even look to completely removing the vehicle from the fleet and arranging route journey's more accurately in the area with existing drivers. Looking at any of these options will help you reduce fuel costs and general running costs without comprising driver activities. A fleet dominated by large vans, for example, may find that smaller vans would suffice and benefit from a significant reduction in fuel costs.
The requirement of a vehicles utilisation should not be based on historic precedent. There can be vehicles and assets that don't necessarily travel high km's but are extremely valuable to have within the business at all times. A few examples could be vehicles in the law enforcement or health sector; some may rarely leave the garage but are mission critical to have on site at all times.
Depending on the size of your fleet, using a simple spreadsheet approach and adapting a point system can be advantageous. Score the vehicles high to low on the frequency to which they are being used and make a call on the low-scoring vehicles that can be eliminated or transferred to another area for shared use.
Pool vehicles can be centrally managed and geographically located to optimise operational efficiency. A central pool of vehicles means that a vehicle can be assigned to any driver and your employees are never without transport at any one time.
Once you have identified which vehicles are underutilised and in which areas you can look to replace 2-3 vehicles with 1 vehicle. If the pool vehicle strategy is properly sized it may occasionally run out of vehicles. This is where a short term hire arrangement or a weekly rental may come in useful as a quick and convenient back up plan.
Businesses need to make sure that the life cycle of each vehicle is flowing over at the right time. So there aren't any 'spare' vehicles on your fleet at any time. This will help keep costs down on a number of fronts, especially possible resale issues or end of lease costs that may crop up unexpectedly.
Replacing older vehicles on the fleet with more fuel efficient vehicles is sensible fleet practice. Below are some high level purchasing strategies that may also help with operational needs and driving cost down in the fleet:
- Think about alternative fuels and vehicles - cost savings can be made by choosing more fuel efficient vehicles and can be economically viable for many fleets. Immediate savings could be obtained from vehicle maintenance and fuel usage.
- Opt for light economical vehicles - reducing vehicle weight can improve fuel economy. A study conducted by a British design and consultancy firm Ricardo1, looked at the fuel savings in different vehicle classes from reducing weight by 10 per cent - while keeping performance comparable. The study showed that a10 per cent weightreduction would cut fuel consumption3 to 4 per centusing the same engine.
- Move to smaller, efficient vehicles - introducing smaller engines in the fleet can help fleet managers meet operational needs without downgrading in vehicle class
More details on the perfect'right sizing' strategy can be obtained by contacting one of our fleet consultants.
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