Forming a good budget for fleets can be tough. It is very easy for fleets to lose money if their management is out of place. This is why businesses have now stepped up their game by investing in fleet management systems. Through this system, fleet businesses can ensure the best utilisation of their money for the betterment of fleets.
Before we check out ways in which a fleet management system optimises fleet expenditures, it is important to understand how exactly businesses tend to lose their money. Excess wastage of fixed expenditures naturally leads to losses in the long run. This is why one must go to the absolute root of problems.
Why Do Fleets Lose Money?
Managing expenditures of fleets remains a great issue for all industries. This is because building profits is impossible if the vehicles are not able to conserve money during the operational stage. While there are a lot of ways in which fleets tend to lose their budget, here are the major contributors:
- Vehicle Damages: Every time vehicles get into accidents, they suffer varying damages. It is very expensive to get these damages repaired. Not just that, but major accidents can ruin vehicles to the point of no return. This means fleets become short on resources, thus, affecting their productivity.
- Fuel Cost: Rising fuel prices hit fleets really hard. This is because fuel is what runs these vehicles. When fleets are run unattended, their margin for fuel wastage increases significantly. Factors contributing to this wastage can range from drainages to pilferage as well.
- Damaged Consignments: As we discussed, accidents can be fatal to a vehicle’s condition. But fleets responsible for transferring consignments to clients suffer even more. They end up damaging these goods and businesses are forced to take responsibility for such incidents, paying for the damage done to goods.
- Lack of Servicing: Every vehicle at some point requires regular check-ups to run in an optimal state. But if managers ignore these servicing procedures, the damage done to vehicles keeps piling up. This can ultimately lead to breakdowns and increased downtime.
- Fleet Health: Having old vehicles out on the road can be very costly. This is because these vehicles increase vehicles fuel consumption and also lead to accidents. This can endanger both vehicles and drivers, ultimately translating to monetary losses.
Fleet Management System To The Rescue?
A fleet management system is designed to optimise fleet operations down to a T. All the solutions when applied to operations can reap huge benefits for these fleets. Some of these advantages are:
Lower Fuel Expenditure
Managers cannot cut down fuel expenditure without it somehow affecting the fleet’s operation. But while nothing major can be done for fuel costs of businesses, it is the small things that make a whole lot of difference,
The fuel monitoring solution of a fleet management system is one of the most efficient ways for managers to keep track of their vehicle’s fuel consumption levels. Optimisation methods cannot be implemented without clarity about fields where a fleet is lacking. For example, if a vehicle is consuming more fuel than necessary, then managers can investigate the reason behind the high consumption.
Managers can also ensure that their fleets are driven ethically to ensure fuel conservation. Practices like idling and overspeeding negatively impact fleets and make them lose money. But with the driver behaviour monitoring solution, the application of better driving habits on roads can be ensured.
The route planning solution also aids the process of fuel conservation. It cuts down acts like route deviation that are a major contributor to fuel wastage. Thus, the chances of drivers traveling by routes that are longer than necessary are cut down.
Vehicles experience maximum depreciation when they are on the road, especially under unfavourable conditions. This is why they require frequent repairs and maintenance procedures.
But with a fleet management system, these vehicles are less likely to break down. This is because, through its solutions, the system maintains surveillance over drivers and their activities. With improved optimisation methods, vehicles are way less likely to get into accidents or incur any form of physical damage caused by careless driving.
Route planning solution also ensures that vehicles are not overburdened and instead divides tasks equally amongst the fleet. This reduces the depreciation rate of the fleet.
Increase Vehicle Life
Old vehicles are very harmful to fleets and their expenditure. They are way more polluting the environment as well. This is why most countries have a restriction on the functioning of vehicles post a certain age.
Buying new vehicles for fleets is one of the most wasteful expenditures for businesses. With a fleet management system, vehicle wear and tear reduces which in turn means that they tend to last a lot longer. The system also prevents vehicles from getting into any kind of accident. Thus, they undergo no heavy damage.
Reduce Vehicle Travel
Vehicle tracking software’s route planning solution is meant to form paths for vehicles’ tasks based on their halts and sequences. This solution allows managers to choose the most appropriate routes that help vehicles avoid dangerous conditions while also reducing their engine hours.
When the travel time of these automobiles reduces, their conditions stay good for way longer than vehicles forced to overwork. We have already seen how running old vehicles can reduce fleet profitability in the previous section. Thus, the software allows businesses to make better profits.
Save on Operational Costs
With the use of a good fleet management system, businesses can save a lot of money on small costs which when looked at collectively might be eating up the budget way more than expected.
When fleet management happens manually, all the lists and reports are collected physically. This leads to paper wastage that is impactful not just to the fleet’s expenditures, but also to the environment. There are several such physical resources that are eliminated from the process of operation when a business adopts digital automation. Thus, companies save a lot of money in the long run.
Insightful Decision Making
With reports generated by the system, it becomes very easy for managers to make informed decisions for the betterment of their fleet. This includes better-distributed expenditure. While forming a budget for fleets, studying the operations of the business is a crucial step.
This is because it is difficult to decide what part of the fleet to invest in when you have no idea where the business is lacking. Keeping this in mind, the report from the system can help managers optimise parts of the fleet which are not doing well.
For fleets to function properly, it is important that they maintain a good budget. It is futile to have an operational fleet that ultimately garners losses. This is why businesses need to look for ways in which their operations can be cost-efficient even after cutting down on expenditure. Investing in a fleet management system can be a good place to start. We have already seen just how beneficial it is for fleet businesses.
TrackoBit is a leading fleet management system in the market. It not only helps you optimise operations but also helps customise your software. Watch it transform your fleet by requesting a demo now!