FieldLogix Blog

Many changes are coming this year for the fleet trucking industry. CSA Regulations have already caused a great deal of uncertainty and fear for many fleet operators, but do not fret. Based on our research, the actual impact is expected to be less than the potential and most feared impact. New legislation is always daunting, but the doom-and-gloom scenarios you may have been hearing are really not worth losing sleep over.

In the short term, until it becomes clear what the roadside inspectors are going to do differently, how the scoring systems are going to work, and what the auditors will do if and when they visit – there’s definitely going to be some confusion . This uncertainty puts fleet operators on edge and can make it more difficult to make your next business decision. Because of CSA companies may start to freeze their processes, to pull back from expansion plans, or to delay on hiring new truck drivers. If enough fleet operators take this cautious stance, in the short term, it will produce a real constraint on trucking capacity, which will in turn increase the upward pressure on truck driver pay and freight rates.

Have you heard about the 9^th annual Fleet & Asset Management USA 2010 Conference & Expo on November 17-18 in Atlanta, GA? It is an important forum for the commercial Fleet and Telematics industry.

The program will have speakers from the Department of Transportation (DOT), NHTSA, John Deere and more.

Here is a list of topics that will be covered at the Fleet Management Show.

• Innovative Joint Ventures Elevate Industry Benchmarks: Assess which future partnerships will enable your business to surpass competition and achieve supremacy through deliverance of next-generation products and services.
• Commercial Logic of Green Solutions Unearthed: Capture the fiscal benefits fundamental to adoption of green-fleet initiatives by positioning solutions to deliver competitive idle-time and route optimization capabilities to help fleets slash costs! Learn how green GPS fleet tracking systems like FieldLogix can help you go green and save green.
• Create the Winning Formula for Insurance Telematics : Discuss how best to create successful alliances with the insurance community and see how resulting products and services will be integrated within the fleet space.

Fleet Cost-Reduction Strategies: Direct Expenses

Sell used vehicles in competitive resale markets. Most fleets value their used vehicles based on market values published from various industry sources like KBB. Fleet managers are usually satisfied with the sale of an individual fleet vehicle if they realize close to the market average or, worse, an amount more than book value. This approach ignores that those published market values are the mean of a distribution of high and low prices. Far too often in a negotiated sale, the purchasing vehicle dealer or driver knows the condition of the vehicle better than the seller, and pricing it at market average gives the upside to the buyer. Only by pricing negotiated sales above the market average or by selling in a competitive bidding market with a larger population of buyers can sellers actually capture above-the-mean value for themselves. This approach can provide an additional 5% in average resale prices, up to $75,000 per year.

Reduce accidents and insurance costs. Typically most insurers will reduce your insurance premiums by over 30% if you install a GPS fleet tracking system. Moving beyond depreciation to other operating costs, fleet vehicle accidents require an average of $1,500 to $2,800 in repairs, but total accident costs are perhaps closer to $11,000 per incident when indirect costs such as injuries, liability, property damage, and workers’ compensation are included. Typical fleet annual accident rates range from 15% to 40% of all vehicles, so the savings opportunities by reducing accidents can be substantial. By mandating pre-employment and annual motor vehicle records checks, requiring safe-driver training, and enforcing a safety scoring system, your fleet can reduce its accident rate by over 15% and save up to $375,000 per year.

Does your company have mobile employees such as sales reps or field service technicians who routinely need vehicle transportation to do their work? If so, managing your mobile employees and fleet vehicles effectively is an important part of maximizing revenue generation and customer satisfaction. Most executives understand the importance of keeping these employees productive, but they are often not aware of the significant productivity and cost-savings benefits that come from efficiently supporting employees’ transportation needs.

The Challenges of Managing Fleet Costs

Vehicle-centric companies, such as trucking and distribution companies, are experts in fleet management and usually have the in-house resources to do it quite well. However, for the rest of us in other industries, executives are primarily focused on managing the core of the business – whether it’s building high rises, manufacturing computers, or servicing HVAC equipment. Fleet managers simply don’t have the expertise or the inclination to invest much time or energy in improving fleet operations. Unless you are an expert in fleet management, vehicle expenses by their very nature are decentralized–usually occurring in small transactions spread across numerous locations and employees. On the surface, fleet management costs seem very difficult or control.

Contrarily, taking the time to focus on fleet management issues via basic operational policies and a little centralized control can significantly enhance worker productivity and result in major cost savings. Optimizing fleet management can ensure that mobile workers get the transportation their job requires while simultaneously yielding up to $1 million in cost savings for a typical mid- to large-size enterprise. Whether your company’s fleet is large or small, the same concepts apply.