Beneath the surface of fleet ownership lies a realm of hidden costs that can drain your resources and hinder your business's growth. While the known expenses of managing a fleet are acknowledged, there are insidious factors that often go unnoticed. In this post, we shine a light on potential expenses that may be draining your resources. By understanding these factors, we empower you to make informed decisions and build a smarter, more efficient fleet.
What Do We Mean Fleet?
In the industry context, a fleet refers to a group of vehicles owned or operated by a company or organisation for various purposes, such as transportation, logistics, or service delivery. Fleets can range from a few vehicles to hundreds or even thousands, depending on the size and scope of the business.
Known Costs in Fleet Management
When considering fleet management, there are several well-known costs that come to mind. These include vehicle acquisition and financing, fuel expenses, maintenance and repairs, insurance, and employee salaries. These costs are typically accounted for and factored into the overall budget and financial planning.
Overlooked Hidden Costs
While the known costs are significant, fleet owners often overlook several hidden costs that can have a substantial impact on their bottom line. Let's explore a few of these often disregarded expenses:
• Idling Wastes Fuel and Increases Engine Wear
Did you know that idling a heavy-duty truck consumes about 3.03 litres of fuel per hour? Even with diesel costs as low as $2.68 per litre, fuel for one 10-hour rest period can cost you approximately $81.60. With a long-haul truck idling for approximately 1,800 hours per year, you could be using up to 5,454 litres of diesel, amounting to a staggering $14,641.52 in fuel costs annually in the United States alone, according to calculations by Argonne National Laboratory. Additionally, idling accelerates engine wear and tear, leading to increased maintenance and repair expenses. This cost becomes even more significant when manufacturer warranties and maintenance intervals are based on "hours operated" rather than "miles traveled."
• Harsh Braking Driving Behaviour
According to statistics from energy.gov, aggressive driving behaviours such as speeding, rapid acceleration, and braking have a significant impact on fuel efficiency. It is estimated that these behaviours can lower gas mileage by approximately 15% to 30% at highway speeds and 10% to 40% in stop-and-go traffic.
To address this issue, driver feedback devices have emerged as a valuable solution. A recent study suggests that these devices can help the average driver improve fuel economy by about 3%. Furthermore, for those actively using these devices to save fuel, the potential improvement in gas mileage can reach up to 10%.
By implementing driver feedback devices and providing training programs to promote smoother driving habits, fleet owners can effectively reduce fuel consumption and optimise their operational costs. Encouraging drivers to adopt more efficient driving practices not only contributes to cost savings but also helps create a safer and more sustainable fleet.
• Speeding and Speeding Fines
Fleet owners often overlook the hidden costs associated with speeding and the potential fines that can result from it. In Singapore, speeding fines for heavy vehicles can amount to as much as $400. These fines can quickly add up and impact the overall profitability of the fleet.
Beyond the financial implications, speeding also poses significant risks to safety on the roads. It increases the chances of accidents, endangering both drivers and other road users.
• Mismanagement in Route Planning
Inefficient route planning can result in excessive mileage, wasted time, and increased fuel consumption. Optimising route planning through intelligent fleet management solutions can reduce unnecessary expenses and improve overall operational efficiency.
Saving Costs Over Time
To address the challenges of fleet management and help businesses save costs, a comprehensive fleet management solution holds the key to these issues. Ascent’s iSPOT® Fleet Management System (FMS) is an advanced system that provides valuable insights into your fleet's performance, enabling data-driven decision-making and cost optimisation. With real-time tracking, efficient route planning, driver behaviour monitoring, and customisable reporting, iSPOT® FMS empowers you to identify and address cost-drivers effectively.
Evidently, building a smart fleet is not just about managing the visible expenses. It requires a deeper understanding of the hidden costs that can impact your bottom line. By shedding light on these hidden expenses and leveraging the power of data insights, fleet owners can unlock significant savings and drive their businesses towards greater efficiency. Building a smart fleet is an ongoing journey of optimisation and informed decision-making, and with the right tools and knowledge, you can navigate this path with confidence and achieve long-term success.
Ascent Solution is now a recognised Enterprise SG vendor, offering up to 50% off iSPOT® FMS to new customers through Productivity Solutions Grant (PSG).
