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7 tips to cut fleet costs
When you rely on your vehicles as an essential part of your business, you may be accumulating hidden costs.
Read moreInflation, supply chain constraints, fuel price fluctuations, and an ongoing labor shortage have created an environment where organizations must make every penny count. Fleet managers are facing more pressure than ever to make sure every investment promotes operational improvements and adds to the overall bottom line.
From helping to improve customer service, to increasing driver productivity and enabling better routing, fleet management software can play an integral role in streamlining operations. It can also significantly contribute to measurable return on investment (ROI), both in terms of the technology investment itself and cost savings that can be achieved across several critical business areas.
To determine true ROI, however, you must first define it within a fleet management system. Next, identify the key areas to measure.
Calculating ROI for fleet management solutions
ROI is the ratio between net profit and the cost of an investment. A high ROI means the benefits of a solution compare well to its cost. In fleet management, this is usually a calculation of the savings that a fleet tracking solution can help an organization realize, divided by the cost of implementing the solution.
How does a fleet management solution deliver ROI?
Our 2024 Fleet Technology Trends Report revealed that 94% of organizations using a fleet management solution found it beneficial.
Also impressive, many organizations who had implemented GPS tracking technology achieved an ROI in less than one year. This year, organizations were forced to grapple with unprecedented challenges. Survey respondents clearly indicated that GPS tracking can have a positive impact on business operations and cost centers.
The data showed that most survey respondents saw increased improvement in critical areas such as customer service, productivity and routing. And, on average, respondents using GPS tracking reported:
- 9% decrease in fuel costs
- 15% decrease in accident costs
- 10% decrease in labor costs
3 ways organizations can get a positive ROI out of their fleet tracking solution include:
- Prioritizing driver safety and reducing liability: Using GPS tracking, managers can proactively monitor behavior that increases the probability of a driver causing an accident. Safe driving can also be reinforced by using in-cab alerts, as real-time coaching has proven to be particularly effective at keeping drivers aware of unsafe driving habits.
- Improving asset utilization: Fleet tracking technology includes several dashboards that show operational efficiency and fleet utilization. These dashboards monitor a range of actionable metrics, including idle time and miles driven for each vehicle. This allows fleet managers to examine how individual vehicles are being driven and then balance capacity and vehicle utilization to reduce miles driven and wear and tear.
- Reducing direct labor costs: Those managing a mobile workforce face the challenge of having little visibility into how teams are spending their time. Using GPS tracking, managers can see vehicle history for a specific day, including all trips taken, stops and idling events. It’s a simple way to see how efficient workers are with their time, and where opportunities exist for improvement.
Make this year all about your fleet
Rising customer expectations, increased technical complexity and a competitive landscape can put stress on any organization. GPS fleet tracking can help you more successfully navigate these challenges and improve operational factors that affect ROI.
Want to know all the ways technology is helping fleets across all major industries? Check out the free 2024 Fleet Technology Trends Report.