A typical construction project requires both the use of heavy machinery, such as cranes, mixers, and compactors, and transport vehicles, such as trailer trucks and flatbeds. These vehicles will cost a large amount of money to acquire and also a large sum to maintain. Every one of these vehicles will require project managers to track fuel consumption, manage routes, and ensure that they are at their best during the construction project.
Minimizing construction fleet management costs is one of the things project managers need to stay on top of to ensure that a project stays well within the allotted budget. Here are some steps you need to take to minimize construction fleet management costs.
1. Lower acquisition costs
The largest component of your fleet cost is likely the cost of acquiring your vehicles. Achieving the lowest possible acquisition cost is crucial to minimizing fleet costs. However, project managers need to note that the lowest acquisition cost is not necessarily the most optimal, especially when considering the needs of their business and the vehicles’ resale value.
It is good practice to perform a cost-benefit analysis to determine the best option for your fleet. In addition, you can look into leasing and financing instead of outright purchases to minimize the impact on your cash flow. Finally, the predicted resale value of a vehicle should be a huge factor to consider as it recoups part of the acquisition cost.
2. Cut distances traveled
A given vehicle in your fleet has a limited number of miles that it can travel. Construction fleet managers need to have a firm grasp on this limited resource and aim to cut the miles traveled to minimize fleet costs. After all, miles traveled equals fuel consumed, and fuel is expensive.
There are several ways construction fleet managers can minimize the distances the fleet travels. GPS technology makes it easier for managers to plan and improve routes for efficient fuel consumption. Driver and road monitoring also lets managers provide feedback to operators and discourage practices that cause excessive fuel usage.
3. Optimize the fleet’s size
Reducing a fleet’s size is the best way to reduce your overall costs as it proportionally eliminates operational and maintenance costs while also recouping acquisition costs. However, reducing your fleet also impacts your operation and thus must be carefully planned. Ideally, you should aim to optimize your fleet with respect to the costs and the benefits to your business. Determine each vehicle’s utilization rate as well as its typical use, trips per day, and other relevant data. Identify which vehicles are critical to your operations and dispose of those that are not critical to the business.
Minimizing your construction fleet costs is not an easy process. Use the tools at your disposal, including new fleet management technology, to make informed decisions in managing your construction fleet.
About the Author: Patrick Hogan is the CEO of Handle.com, where they build software that helps contractors, subcontractors, and material suppliers with late payments. Handle.com also provides funding for construction businesses in the form of invoice factoring, material supply trade credit, and mechanics lien purchasing.