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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 asking 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 Ireland the average cost for a litre of petrol is 1.75€ pounds and for diesel 1.72€ (prices of the weekly oil bulletin of the European Commission), lower if we compare with 2022 but the uncertainty on the volatility of the oil market is still remaining in Europe (1). 

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 vans 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 in maintaining 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. 

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 29% decrease, on average, in accident costs.

Navigating inflation with telematics

Fleet companies must take a proactive approach to managing costs amid inflation to achieve a business cost reduction. 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:
(1) https://energy.ec.europa.eu/data-and-analysis/weekly-oil-bulletin_en#price-developments

    Verizon Connect Team

    We drive a connected world in constant motion! We automate, optimise and revolutionise the way people, vehicles and things move around the world.


    Tags: Cost control

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