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How to Reduce Costs with Fleet Management Solutions

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For a business to be considered successful, it needs to be profitable. This means that you must account for every coin you spend in the business, ensuring you're not working at a loss. 

To achieve this, fleet managers should consider adopting fleet management solutions to enhance efficiency. These systems help minimise fuel waste, ensure regulatory compliance, and provide real-time vehicle tracking. 

In this blog, we explore how fleet management solutions can help you save money and streamline your day-to-day operations. We also discover how Cartrack Solutions can help meet your business’s bottom line. 

The role of Total Cost of Ownership in fleet cost reduction

To successfully lower your expenses, you need to understand the Total Cost of Ownership (TCO). 

TCO is the total of all expenses that go into your fleet. Understanding the TCO for each vehicle can help you determine the right time to replace a vehicle. 

This metric is important since it gives businesses a clearer picture of their fleet expenses. TCO includes even the hidden costs that add up over time to help managers understand where they need to minimise costs, optimise vehicle usage, and make smarter investments. 

Key components of Total Cost of Ownership

In order to understand TCO better, let's break it down into components: 

  1. Acquisition costs
    All fees that are required when purchasing a vehicle are considered acquisition fees. These can be anything from purchasing prices, financing fees, taxes, and any other fees associated with getting the vehicle.
  1.  Operational costs
    These are all expenses that occur when the vehicle is in use. This includes fuel costs, maintenance, insurance costs, etc. 
  1. Depreciation
    The longer a vehicle is in use, the more it loses its value. This is something you must consider when managing fleet costs, as it affects its resale value. By monitoring and tracking depreciation rates, businesses can make informed decisions about when to retire the vehicle or replace it.
  1. End-of-life costs 
    These are expenses involved when you are retiring or selling a vehicle. This includes resale or trade-in value, and any other costs related to disposing of the vehicle. Fleet management solutions can help you get the best deal when making these sales, helping you minimise these end-of-life costs.

A mechanic in blue overalls checks a vehicle's alignment in a workshop, with a digital cost overview displayed on the side.

Effective ways fleet management Solutions drive cost savings

Fleet management solutions are essential tools for businesses looking to minimise costs and improve efficiency. Here are some effective ways these solutions can help you achieve this:
 

Fuel efficiency and management

Fuel is generally a large expense in a fleet business, so if you want to save costs, this is a great starting point. You can optimise routes using fleet management solutions through real-time data. This data will help find quicker paths for drivers to use. This will not only result in faster deliveries, but it will also minimise fuel wastage and ultimately save costs.

Minimising maintenance and repair costs

Fleet management solutions can help managers set reminders for vehicle maintenance and servicing. This allows them to financially prepare for the repair costs and find a plan for how they will operate without the car that is out of service. Real-time diagnostics continuously check the overall health of the car to detect any issues, such as engine health and wear and tear. This minimises downtime as you will always know the state of your car and will always be on top of the overall maintenance, ultimately saving you money. 

Enhancing driver efficiency and safety

Fleet management systems allow operators to monitor driver behaviour. This is because reckless driving can cause accidents, which will not only damage the vehicles but will also put the lives of drivers at risk. This will cost the company money for repairs and downtime. By tracking and addressing unsafe driving patterns, fleet management solutions can promote safe driving, reduce costs, and extend the lifespan of vehicles. 

Optimising routes to reduce downtime

GPS tracking and route planning tools are essential in improving the efficiency of a fleet. These tools allow operators to reroute once they detect obstacles that may cause delays, such as traffic, accidents, and road closures. Rerouting ensures that drivers do not spend too much time on the road. They can use the quickest way possible in order to make timely deliveries and leave your customers satisfied. 

Preventing fraud and theft

GPS tracking plays an important role in preventing theft, fraud, and unauthorised vehicle use by offering continuous location monitoring. With real-time tracking, managers can instantly detect when a vehicle is used outside of its intended schedule or working hours, helping uncover fraudulent activities like vehicle misuse for personal purposes. 

Managing fleet utilisation and asset allocation

Monitoring how often vehicles are used allows fleet managers to achieve a balance between over- and underutilisation. This ensures that the vehicles are operating at their optimal capacity. Fleet management solutions can help you set schedules for when the vehicles should be used. An overused vehicle can lead to wear and tear, resulting in sudden breakdowns. When a vehicle is stationary for a long time, it can experience issues like battery drainage, tyre degradation, and other maintenance issues.

Enhancing compliance and avoiding fines

Fleet management solutions can help operators comply with industry regulations and standards. This can be anything from the hours that drivers work, how often the vehicles are maintained, and tax fuel compliance. Through reports and schedules, managers can see when their vehicles are due for servicing and how many hours their drivers are actually on duty. This is important because companies must comply with the Employment Act (Chapter 246 of the Laws of Kenya), which states the hours each employee must work and rest. It also addresses wages, leave days, and all other relevant regulations related to working conditions. This is so your drivers are not overworked and are well rested to avoid making unnecessary mistakes on the road, causing accidents. Failure to comply with these regulations can result in fines and legal disputes, which will cause financial strain on companies. 

A woman analyzes fleet usage data on a computer screen, showing metrics like total hours, distance, and active vehicles in a dark office.

Long-term benefits of investing in fleet management solutions

Investing in fleet management solutions has long-term benefits such as increasing your vehicle's lifespan, increasing profitability, and enhancing your fleet’s safety. Here are the long-term benefits of fleet management solutions: 

  • Increased profitability: Fleet management solutions ensure that your business is operating at its optimal; this will significantly improve your profitability.
  • Enhanced safety: Fleet management systems have tools that monitor driver behaviour. This helps reduce accidents, improving the overall safety of your drivers.
  • Increases vehicle lifespan: When your cars are well maintained and used accordingly, they are most likely to operate for a long time.
  • Better work experience: Fleet management solutions allow proper workflow, not only between drivers and fleet managers but also for anyone involved in the business. All employees will know what to do at all times, which enhances the overall work experience for all. 
  • Improved customer experience: Fleet management solutions help with timely deliveries, which significantly enhances customer satisfaction.  

Cartrack solutions for cost-effective fleet management

Cartrack’s fleet management platform gives you full visibility of your business and teams, helping you increase efficiency, decrease costs, and focus on growing your business. Here are some of the features we offer to ensure that you reduce costs: 

  • Driver ID-tag: 
    Driver identification tags
    are assigned to each driver so you can identify which driver is using which vehicle and for how long. You can assign tags based on driver experience to ensure specific vehicles are driven only by drivers who are licensed for them. You will also be able to differentiate between business and private trips. 
  • Start-inhibit: 
    You can activate the Start Inhibit feature on our web interface, which prevents vehicles from starting unless an authorised driver identification tag is presented.  
  • Preventative maintenance: 
    Cartrack’s preventative maintenance feature gives you real-time alerts of engine faults and automated vehicle maintenance schedules for each vehicle. This feature allows you to know which vehicle is due for servicing so you can be able to plan how operations will continue without the vehicle that will be unavailable, well in advance.  
  • Geofences:
    You can set up virtual boundaries around areas where you do not want your vehicles to enter. You will get instantly notified should any of your drivers enter these zones. You can also set up geofences around your business; this way, you will know when vehicles enter and exit the premises.  
  • AI-powered cameras: 
    Cartrack’s AI-powered cameras
    assist in monitoring driver behaviour by providing real-time alerts when a driver is participating in risky behaviours such as not wearing a safety belt. Drivers are notified immediately of their actions so they can correct their behaviour. These cameras can also help in accident situations. If your driver is accused of causing an accident, the cameras can provide evidence, clearing their name. Saving you money on insurance costs and legal disputes that you may have paid if you did not have the evidence.  
  • Route optimisation: 
    Fleet managers can optimise routes to make sure that their drivers make timely deliveries. This means using shorter roads with less traffic congestion and avoiding multiple trips at different times of the day but at the same location. Fleet managers can plan routes accurately on our system, ensuring fuel efficiency and quicker deliveries. This ultimately increases customer satisfaction.  
  • Mifleet:
    This is a cost management software designed to help identify fuel theft and fuel card fraud by cross-referencing transactions with vehicle telematics data, including location, fuel volume, and tank capacity. This robust tool sends alerts whenever fuel fraud is suspected, enabling you to investigate and address the issue. 
  • Fuel sensors: 
    Track the fuel levels of your vehicles
    or machinery with any of the following fuel monitoring tools: 
    1. Float sensors: These sensors are installed inside the vehicle’s fuel tank, with a floater and variable resistor that move up or down as fuel is consumed or added. Cartrack connected to these wires through an IoT device to measure the voltage changes, converting them into litres. This data is then available on our fleet management platform.
    2. Fuel probes: These external fuel level measurement devices use a float system to monitor fuel levels in separate or external tanks; they are connected to a telematics device that sends fuel level data for easy tracking.  
    3. CANBus: The CANBus clamp links to our telematics device, allowing vehicle components like the engine and transmission to communicate with each other. This improves fuel detection and enables the data to be sent to our fuel management solutions for storage and analysis.  

Case study: Cartrack’s fleet management solution success story

Supermarket Farms is a supplier of fresh, high-quality produce. They’ve been supplying produce to restaurants, hotels, and catering companies around Gauteng, South Africa, for over 30 years. Supermarket Farms needed a system that could help them see exactly where their drivers were at all times to help them ensure there were no unnecessary detours or delays so they could keep the produce fresh and improve productivity and customer experience. 

Here’s how Cartrack helped them: 

  • Cartrack’s vehicle GPS tracking solution allowed Supermarket Farm to pinpoint exactly where their drivers were at any given time. This helped them see any delays, such as excessive idling or if drivers have gone in other directions so they could try to resolve any issues, update customers, and improve their driver turnaround times. This ensured efficient operations and dispatch of fresh produce without delay. 
  • Supermarket Farm used Cartrack’s fleet management system to get driver and vehicle insights that helped them better run their day-to-day operations. If drivers received speeding tickets, managers pulled reports to verify where the event occurred to help settle disputes, minimise future events from occurring, and avoid unnecessary costs.  

In closing, it is important to monitor your fleet costs so you can achieve your business’s bottom line. Fleet expenses can take a big portion of your company’s budget, so managing these costs can make a real difference to your profits. With the use of fleet management solutions, businesses can lower fuel costs, maintenance costs, and other expenses, ensuring operations run smoothly. Contact us today to reach your fleet’s full potential.  

Frequently Asked Questions 

Q: What are some signs that my fleet needs a management solution?

A: If you notice an increase in operational costs, or maintenance costs, or that your vehicles are constantly breaking down, it may be a sign that you need to invest in fleet management solutions.

Q: How can I measure the effectiveness of my fleet management solution? 

A: You can measure the effectiveness of fleet management solutions through Key Performance Indicators (KPIs) such as fuel efficiency, maintenance costs, accident rates, driver productivity, etc. Regularly reviewing these metrics will assist you in assessing the impact of the solution on your business. 

Q: Can small businesses benefit from fleet management solutions? 

A: Yes, fleet management solutions can be tailored to fit businesses of all sizes. Small businesses can start with essential features and scale up as their fleet grows, ensuring they get maximum value at every stage.

Explore how fleet management solutions can help you save costs on your fleet. Discover how these solutions can help you achieve your business’ bottom line.