Discover New Ways to Reduce Your Fleet Spend (That Have Nothing to Do with Fees)

Are you expected to keep optimizing your fleet services while consistently lowering your costs? You’ve reduced vendor fees already, so where else can you look? In the session “Ways to Reduce Your Fleet Spend (That Have Nothing to Do with Fees),” attendees of the 2019 Institute & Expo learned what other low-hanging fruit can be addressed to immediately start reducing fleet costs.

Presenters Larissa Clinard, CAFM^®, Fleet Manager, J. F. Ahern Co.; Eli Rossiter, Director-Telematics/Safety, Donlen; and John Wuich, CAFM, Vice President-Strategic Consulting Services, Donlen; discussed areas that many fleet managers overlook but can quickly engage with to achieve better results.

There are seven planks involved with reducing fleet spend: Fleet Philosophy (the fundamental approach a fleet takes in regard to its spend), Funding Strategy (where is the money for operations coming from and how is it being spread throughout the organization), Fleet Policy, the "big buckets" that have the most opportunities for reduction, Driver Accountability, Managing Exceptions, and Evaluation and Revision of all of the above.

According to Wuich, the big buckets are depreciation, fuel, maintenance, and crashes/accidents. Fuel is the second largest of these "big buckets" of spend, right after depreciation which depends upon reducing capitalized cost and increasing resale value.

Fuel tends to have more venues for cost reduction that are consistently achievable, and thanks to the trove of data collected via telematics, it’s never been easier to pinpoint potential.

Reducing travel requirements is key. You spend less on fuel that you use less of. Determining optimal routing, keeping track of unauthorized vehicle usage, and assessing who really needs the vehicle and who don’t all play a role in cutting fuel spend.

Just as important, said Clinard, is how the vehicles are being used, and telematics can provide reports of excessive idling and reckless utilization which not only support savings requirements but safety and sustainability goals as well.

Rossiter said there are key actors involved with saving on the maintenance side. It is important to develop and drive compliance in preventive maintenance (PM) scheduling, particularly in two important respects. Keeping up with regular PM work supports the long life of a vehicle and can support better resale values at the end of a vehicle’s service lifecycle. Conversely, holding firm with a PM schedule keeps vehicles from having more work done than is necessary. A vehicle that gets excessive work done negatively affects costly resources and results in underutilization.

The fourth “big bucket” of fleet spend is accidents/crashes. It is every fleet’s objective to go for zero crashes, but on shared roadways, it’s not always possible. However, driver training and real-time feedback are essential to driver behavior modification, consequently reducing crash frequency and severity.

Begin with a consistent training regimen for everyone who uses company vehicles. Make safe-driving expectations clear in the fleet policy. Go back to the telematics data and see which drivers are speeding, gunning the motor at the green light, and hard-braking at red lights. Further, motor vehicle records (MVRs) are your friends and can be invaluable information concerning the psyche of your driver(s). Not knowing whether they are fit to drive or otherwise puts an organization in potential legal jeopardy. Avoid negligent entrustment issues and support safer driving practices at the same time. 

Underutilization of vehicles is costly. Find out which ones are not being used consistently and determine the best way to address it, either through a revision of who drives what and why, an overall right-sizing effort, and selling off the vehicles that aren’t being used on a regular basis. They may not be burning fuel, but they are accruing costs on the registration and insurance side of the equation.

Wuich mentioned that exceptions can also be a goldmine when it comes to spend-reduction. He noted one instance where a take-home vehicle was being used excessively by the employee’s family members, some of whom weren’t even afforded driving privileges with the vehicle. Look to when the vehicles are being used, and if these aren’t within the hours or scope of work, you need to make the organization’s position clear to the driver, up to and including revoking their take-home status.

Things change. All three presenters stated that it is necessary to evaluate and revise such processes on a regular basis. Significant costs can arise from a lack of addressing change as it occurs, and the need to spend your way to a resolution later. All plans are contingent upon the best thinking right now, so get comfortable with refinement and adaptation. 

The main reason why people come to I&E is to learn how to do their work better, and with these points in attendees’ hands, several opportunities to take back and leverage to best advantage were clear.