Green Fleet Vehicle Market Boosted by GE EV Purchase

This week GE announced plans to purchase 25,000 electric cars by 2015. This the largest purchase in the history of electric vehicles. The purchases will be for its own fleet and for its Capital Fleet Services business, where customers can lease electric cars through GE. GE plans to convert over 50 percent of its massive global fleet (over 10,000 fleet vehicles) and purchase 12,000 electric cars from GM.

GM does big business in fleet sales. Fleet sales look like they’re going to be a key part of electric vehicle adoption. Corporate fleets make a lot of sense because of their sheer volume. Plus GE fleet sales are quite profitable. One of the most popular green fleet vehicles is the GE Volt, an electric vehicle that shifts to gas power after going 25 to 50 miles on its battery, so drivers aren’t entirely dependent on the battery.

According to BusinessWeek, gigantic orders like this could do a lot to push electric vehicle prices down and speed up adoption. “By electrifying our own fleet, we will accelerate the adoption curve, drive scale, and move electric vehicles from anticipation to action,” CEO Jeffrey Immelt said in a company statement.

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Telematics Saves HVAC Companies Thousands

fleet vehicles trucksReal-time fleet tracking helps HVAC, plumbing and electrical service companies manage overall mobile worker performance, reduce expenses and increase customer satisfaction. Whether you manage a fleet of 5 vans or hundreds of fleet vehicles, GPS fleet tracking solutions can improve your bottom line. If your residential or commercial HVAC company doesn’t have a GPS tracking device, then you may be missing a valuable opportunity.

HVAC Challenges & Controlling Operating Expenses with GPS Tracking:

Lack of accountability for drivers – Having a widespread fleet makes tracking worker location and activity. GPS fleet tracking can make your mobile employees and contractors more accountable. Improving employee performance will not only make your customers more happy but it will make your drivers safe and at less risk of an accident.

High Cost of Fleet Vehicle Maintenance and Insurance – Managing a large group of fleet vehicles has high operational costs for most HVAC and building service contractors. Many HVAC managers have trouble keeping up with vehicle maintenance logs because they have to wait for drivers to manually submit their mileage records. But with a vehicle tracking system, electronic driving records are available 24/7 with just a click of the mouse. A modern GPS fleet management system can also help you to get better resale values when it’s time to sell or trade-in vehicles. Also, installing a fleet tracking device can instantly reduce your company’s insurance premiums and will help to immediately improve your ROI.

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How to Save $1.3 Million with Better Fleet Management – Part Four

fleet-management-lower-costs-increased-efficiencyFleet Cost-Reduction Strategies: Direct Expenses

Reduce fuel costs. Fleet operators should focus on miles per gallon. Fuel costs are a large direct operating expense, especially for fleets with high mileage each month. Many fleet managers approach fuel cost savings by looking for purchase discounts, which aren’t really feasible unless the fleet can fuel in volume at a single site. Fleet fuel cards can be used to direct driver purchases away from premium fuel, which offers some benefits, but the most significant fuel savings come from selecting more fuel-efficient vehicles. Moving away from heavy vehicles and larger engines can provide 30% to 50% fuel economy increases. Using a fleet tracking system to identify poor driving behavior that burns excessive fuel, such as speeding and unnecessary idling can reduce fleet fuel costs by approximately up to 12% per year. Also, a fleet fuel card will help move 8% of fuel purchases away from premium fuel.

Secure the best fleet financing. Proper vehicle financing should absolutely be considered. Leasing vs. ownership of fleet vehicles is a common funding decision for fleet managers, and the economic analysis often ends in a tie. The decision to lease or own frequently hinges simply on balance-sheet considerations.

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How to Save $1.3 Million with Better Fleet Management – Part Three

fleet-tracking-lower-costs-increased-efficiencyFleet 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.

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How to Save $1 Million with Better Fleet Management – Part Two

fleet-tracking-lower-costs-increased-efficiencyFleet Cost-Reduction Strategies: Direct Expenses

Use the right vehicle with the right equipment for the job. Feature and model creep are common causes of excess fleet vehicle depreciation. Drivers love four-wheel drive, extended cabs, plush leather seats, V-8 engines, and all kinds of other features. While providing fleet vehicles with those options may be good for morale and can be a good business decision, it will add to the depreciation cost. Trading in older vehicles for more fuel efficient fleet vehicles is also a good decision and this will be discussed further. Also, choosing fleet vehicles without regard to expected resale value can result in higher depreciation. For example, if you convert fleet vehicles from SUVs to sedans and remove some unnecessary amenities you can save up to hundreds of thousands of dollars in fleet expenses.

Negotiate well with vehicle manufacturers. After selecting the right vehicle, acquire it for the best possible price. Vehicle manufacturers compete aggressively for market share and have significantly increased purchase incentives for fleet customers who buy new vehicles. By sourcing with only one manufacturer, your fleet can improve net discounts by approximately 5%, reducing depreciation by up to $225,000 per year.

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NYC’s Fleet Management Plan to Reduce Fleet Costs by $71 Million

A recent report from New York City Mayor Michael Bloomberg’s Office included recommendations that will save NYC taxpayers an estimated $71 million in fleet management cost over the next four years by streamlining government fleet management, centralizing fleet operations, cutting vehicle fuel use, and decreasing the number of fleet vehicles. It’s part of the Mayor’s overall plan to save taxpayers over $500 million over the next four years by significantly increasing government efficiency.

According to the NYC Mayor’s Office report “the city spends approximately $667 million annually on fleet operations — this includes $283 million on maintenance, $120 million for fuel, $14 million for fuel tank compliance, maintenance, and spill remediation, and approximately $250 million for vehicle and equipment procurement. Maintenance expenditures consist of salary, which includes overtime, differential and fringe benefits; overhead – including building maintenance and rent; and vendor expenditures, including parts and maintenance services. Salary alone represents 70% of the NYC’s expenditures for maintenance.”

Bloomberg’s administration wants to centralize the city’s fleet operations. The report showed high quantity of decentralization across the city’s fleet operations which is not very efficient. The city employs more than 1,500 fleet management people that repair vehicles at 126 shops, each with their own set of equipment, staff, and parts inventory. Based on these numbers alone, it is clear that there is room for improvement in the fleet operations department.

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