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Managing business costs for fleets amid inflation

By Verizon Connect Team October 13, 2023

As the global economy continues to grapple with inflation, fleet companies are feeling the impact on their bottom line. Many fleet managers are wondering how to reduce fleet costs in today’s environment. Inflation affects fleet companies in a variety of ways, from increasing fuel and maintenance costs to raising insurance premiums. It is crucial for fleet companies to implement effective cost management strategies to keep business costs down, maintain profitability and remain competitive in today’s market.

Supporting fuel efficiency

Inflation can have a significant impact on fuel costs for fleet companies. In Australia the average price for a litre of petrol is $1.83 and for diesel it’s $1.95, which is actually lower than the average price of petrol around the world (1). However, the uncertainty of the volatility of the oil market still remains worldwide. With rising prices, fuel expenses can quickly become a significant portion of a fleet company’s budget. 

Effective fuel fleet management and strategies to reduce fuel costs are crucial for companies to maintain profitability. With a fleet management system, it’s possible to identify commercial vehicle fuel efficiency, monitor fuel consumption and encourage efficient driving behaviours. A fleet management system can help:

  • Monitor speeds: Observing optimal speeds can help reduce fuel usage.
  • Identify idling: Addressing unnecessary idling can help prevent fuel waste.
  • Supervise fuel spend: Track fuel efficiency and identify causes of high fuel consumption.

A fleet management software solution also allows you to directly integrate fuel cards into the system so fleet managers can monitor fuel spend and keep business costs down. With reports to monitor fuel expenses, you can gain near real-time fuel data and help keep your fleet on budget.

Related: Is your fleet facing fuel management challenges? Download this article on fuel monitoring systems for trucks to discover top strategies to help. 

Coping with rising vehicle and material prices

Rising material and fleet management costs, from oil to tyres to batteries, can impact the cost of vehicle maintenance and repairs. Regular maintenance is important to prevent costly repairs or replacements. 

It is important for fleet companies to be aware of these rising business costs and to develop tactics to manage them effectively. Without a comprehensive telematics system, keeping track of your fleet’s maintenance schedule and service needs can be both time-consuming and expensive. Choosing a telematics solution for your fleet management needs can make all the difference to keeping your fleet in good condition, with less downtime. 

A telematics solution lets you stay up-to-date with both preventative and unscheduled maintenance, mitigating the risk of expensive repairs or breakdowns and supporting your operational cost savings goals.

Related: Don’t let fleet costs eat into your bottom line. Download this eBook on reducing your fleet expenses.

Addressing the surge in insurance costs

One of the main reasons that inflation impacts fleet insurance premium costs goes back to the increasing costs of parts, labour and other expenses associated with repairing or replacing a vehicle. This, in turn, leads to higher claims costs for insurance companies which then get passed on to the policyholders in the form of higher premiums. 

Canstar’s latest research revealed that “on average premiums rose 18 per cent over the past year” ($274 in just 12 months)(2).

Telematics can help your fleet address rising insurance costs by providing data to promote safe driving habits and, with integrated dashcams, can protect your company from false claims. Fleet managers can set alerts for speeding, harsh braking or other unsafe driving habits and distracted driving. Companies using fleet management technology reported a 17% decrease, on average, in accident costs (3). Find out how dashcams can help boost your fleet in Australia.

Navigating inflation with telematics

Fleet companies must take a proactive approach to managing costs amid inflation to achieve a reduction in business costs. By implementing effective cost management strategies such as fuel efficiency, staying up-to-date on maintenance needs and addressing safe driving habits, your fleet can maintain a competitive edge in today’s competitive market.

Schedule a demo today to see how a comprehensive telematics solution can help your fleet manage rising business costs and improve profitability.

Sources:

Verizon Connect Team

The telematics industry is moving at a fast pace. With new developments, use cases and feature sets emerging every day, it can be challenging to make the right decision for your fleet business. Verizon Connect Staff is conceptualized to be a partner for your business and help you make smart choices based on useful content.


Tags: Cost Control

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