8 Ways to Reduce Fleet Costs
There are several ways to reduce fleet costs and transport costs within a delivery fleet of vehicles, here we consider the eight most common.
8 tactics to reduce your fleet costs
1. Optimise Fleet Size
While disposing of drivers and vehicles is certainly one way to reduce costs it probably isn’t the best option for your business with the continued growth in home delivery. You can avoid adding new vehicles and drivers to meet increased demand by using route optimisation software. Many vehicle operators using manual route planning talk about problems occurring from the imbalance of their routes i.e. some vehicles arriving back at the depot early, whilst others run over the allotted shift time and incur costly overtime payments or miss deliveries. This could lead to the impression that the size of the fleet needs to be addressed.
However, with fully optimised routes, deliveries are balanced across all available resources, ensuring both vehicle utilisation and delivery capacity are maximised, saving money and improving efficiency.
Having vehicles and drivers fully and evenly utilised enables the true capacity of a fleet to be calculated and if necessary, the impact of reducing the number of vehicles can be assessed. It also provides the opportunity to improve delivery capacity with the existing vehicles/drivers, while balancing deliveries across your fleet helps keep drivers happier that their deliveries are achievable and that no one driver is receiving favouritism or shorter delivery routes.
When you automate your route planning processes, you can not only ensure that vehicles are fully utilised on the outbound journey for deliveries, but you can also schedule collections at the same time. This will maximise vehicle utilisation and driver productivity, reducing the need for additional trips or the cost of 3rd party suppliers.
2. Cut Miles Travelled
It is simple maths that shorter routes results in lower fuel usage and less wear and tear on vehicles. Modern route optimisation software such as that used by Descartes utilises multiple algorithms to solve complex problems of estimating: average road speeds, vehicle capacities, unloading times, road hazards and restrictions, driver capabilities, customer opening times etc. Suffice to say that a busy transport planner cannot consider all these factors when manually planning 100’s of deliveries per day, the human brain is simply not capable of considering all these variables. So optimal delivery routes that would take a human planner many long and frustrating hours to produce can be performed automatically by an advanced software optimiser in minutes.
In addition, Descartes’ powerful routing optimisation software uses advanced mapping technology & geo location to ensure that routes are accurate, calculating average road speeds at different times of the day for, in order to create the most efficient delivery routes whilst avoiding hazards and restrictions.
All of these factors help to ensure that delivery ETA’s are accurate and can be notified in advance automatically, helping to make sure customers are available for the delivery and that goods can be delivered ‘On Time In Full’ (OTIF) on the first attempt.
Route optimisation will ensure the least number of miles are travelled to achieve the lowest cost of delivery. If only one additional delivery can be added to each vehicle per day the cost per delivery will be reduced and over time this will amount to significant savings.
3. Improve MPG
It is obvious that hard acceleration and late braking use more fuel than necessary. Advanced vehicle telematics will highlight if a driver is speeding, over braking, cornering too hard, over revving the engine or if there is excessive idling. The GPS device can also be used to provide in cab coaching for them to improve their driving skills. Along with driving alerts for any of the above infringements and early identification of any vehicle maintenance issues, leads to optimal MPG for the vehicle and reduced maintenance costs.
The resulting reports can be generated for fleet managers enabling them to identify drivers who need further driver training or vehicles that are continually underperforming.
4. Lower Fuel Cost
Advanced telematics accurately calculates the MPG for the fuel put into the vehicle and will quickly provide alerts to transport managers if any anomalies are detected that could indicate fuel theft or other issues.
Efficient, optimised routes with fewer miles per delivery will obviously reduce fuel costs, but improved driving techniques, identified with telematics devices, can also reduce fuel costs.
5. Reduce repair & maintenance costs
Early identification of vehicle error codes via vehicle telematics devices can enable fleet maintenance to be scheduled in advance and parts ordered, reducing the down time of a vehicle and preventing further damage if left undetected.
6. Lower overhead costs
More deliveries per vehicle, reduced miles per delivery, better MPG, improved vehicle maintenance and driver behaviour, on their own will result in some savings and cost reductions for a business, however, taken as a whole and combined together the cumulative effect will be huge.
In addition to the cost savings mentioned above, route optimisation software will reduce the time it takes to schedule deliveries and calculate the delivery routes. Many customers report that their planning time has been cut from hours to minutes. This enables planners to concentrate on a broader range of activities and to deal only with the anomalies or special deliveries that require their attention. Additionally the risk of relying on the knowledge of a single person is also eliminated, useful when they take annual vacation or need to be away from the workplace for any reason.
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7. Retain Drivers
Optimisation of delivery routes, and the production of delivery routes that are accurate and achievable have a massive effect on drivers’ morale. While reducing the stress placed on delivery drivers due to failed deliveries because of poor customer notifications, unachievable delivery numbers, and excessive schedules, should not be underestimated.
If moral can be boosted and stress reduced, then a company is more likely to retain its staff and drivers and therefore will reduce fleet costs by saving on recruitment.
8. Improve Customer Satisfaction
Customer satisfaction is a crucial KPI for any delivery operation, even if it isn't directly a transportation expense. Increased customer satisfaction, lower inbound call volumes, and improved customer retention rates are all aided by more accurate arrival times backed up by more frequent contact and notifications via email or SMS to the customer.
While digital proof of delivery can also reduce the queries or discrepancies around damaged or the number of goods delivered.
Discover more about Proof of Delivery
It's also worth noting that these fleet savings will continue year after year, and effective route optimisation and delivery scheduling software will continue to save time and money (improving the bottom line), as well as improving customer satisfaction with your deliveries.
Author: Descartes Systems UK
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