3 strategies to cut your business costs

A key objective for any fleet manager is to reduce operational fleet costs. Implementing business cost saving strategies is crucial for large companies that need to see the big picture, identify hidden costs and set goals to achieve business cost reductions in key areas like fuel, labour and vehicle maintenance, among others.

Let’s check out some crucial strategies that can help your business cut costs:

Strategy #1: Adopt a fuel-saving program for your fleet

Efficient fuel management is crucial when it comes to fleet operating costs because it enables every litre of fuel purchased to be used in a cost-effective way, thus contributing not only to the company’s economy, but also to energy savings and environmental protection.

The amount of fuel consumed depends on the condition of the vehicle, the driving environment and, most importantly, the driver’s driving behaviour.

A study reveals that “aggressive driving (speeding, rapid acceleration and braking) wastes fuel and can lower your fuel mileage by roughly 15% to 30% at motorway speeds (1) and 10% to 40% in stop-and-go traffic (2)”.

In contrast, efficient driving can help reduce fuel consumption, “research about experience from eco-driving initiatives found that a sample of drivers using these kinds of techniques reduced their fuel consumption by an average of 13% and by as much as 33%” (3). 

Now, imagine the impact on a large fleet if you saved around 30% per vehicle. These savings translate into increased profitability and competitiveness for the business. 

To achieve these savings, most innovative companies use advanced fleet management technologies to support the daily operations of all their equipment. The software increases fuel efficiency, reduces emissions, as well as promotes safety. 

In fact, the latest Fleet Management Technology Trends survey in Australia, which gathers insights from those that use advanced fleet technology, revealed that:  

• GPS tracking users decreased fuel costs by an average of 15%. 
• 49% decreased fuel consumption.
• 42% decreased CO2 emissions. 
• 31% improved sustainability.

Download the Fleet Technology Trends Report Australia and New Zealand 2024 and learn more about how businesses benefit from advanced fleet management solutions.

Strategy #2: Enhance routes to reduce mileage

Optimising routes is vital for saving fuel, cutting down on emissions, and using a company’s fleet effectively. 

Through advanced fleet management technologies, we’re able to refine our routes to drive the necessary kilometres, without travelling any excess distance. 

This approach not only conserves fuel but also supports our commitment to sustainability. Several crucial aspects come into play in route optimisation, including selecting the appropriate vehicles, determining the best routes, and improving occupancy rates (4).

• Vehicle selection: Upon determining the service site’s location, we’ll select the nearest vehicle for the task. If several vehicles are available, the one with the lowest fuel consumption will be chosen (5).
• Route selection: Whenever you can, opt for a route that’s not only quick but also less likely to be congested during your travel times. Additionally, aim for the one with the shortest distance to cover. If you come across routes that are pretty similar, go for the ones with fewer inconveniences like steep hills or uneven surfaces, so your vehicle uses less fuel (6).
• Occupancy rate: For transportation companies, achieving a 100% occupancy rate is a priority. This can help vehicles operate with full capacity, and reduces the distance travelled without cargo. This efficiency reduces unnecessary fuel consumption, helping a company with its efforts to optimise fuel use (7).

Fleet management technology can aid companies in efficiently managing their fleet and in strategic areas that help them stay competitive, efficient and sustainable.

In fact, the last Fleet Management Technology Trends Survey reveals that:  

• 82% of GPS tracking solution users stated that the technology is “very” or “extremely beneficial” when it comes to managing their fleets. 
• 50% said it improved routing.
• 35% said it improved efficiency.
• 28% said it improved sustainability.

Download the eBook 7 secrets to cutting fleet costs and learn more about how fleet management technology can help your business. 

Strategy #3: Implement an excellent vehicle maintenance program

One of a fleet manager’s main priorities is to perform proper vehicle maintenance for several reasons, these include:

Safety: Vehicles should be in optimal condition to be used by the team.

Fuel consumption: Poor vehicle maintenance can have a direct impact on fuel consumption.

Mechanical breakdowns: Combining preventive and predictive maintenance can help prevent costly repairs such as those to the vehicle’s engine.

Fleet managers need to consider various factors, including the impact of tyre pressure on performance. Low tyre pressure “increases fuel consumption by 2% and reduces tyre life by 15%” (8). On the other hand, “high tyre pressure also increases fuel consumption and leads to tyres wearing down prematurely” (9).

It is also important to know that the condition of the oil, air and fuel filters has a direct impact on vehicle fuel consumption. If the oil filter is in a less-than-perfect condition, “it can increase the risk of major engine damage and also increase fuel consumption by 0.5%” (10).

If there is dirt in the air filter, “this can have a negative impact on the inlet manifold and increase fuel consumption by up to 1.5%” (11).

In addition, if the fuel filter is not working properly, it can increase fuel consumption by up to 0.5%, and if it becomes blocked, it could cause engine failure (12). It is crucial to check the amount of water in the filter.

Fleet managers need to consider all possible variables. If they use fleet management technology, they have the advantage of being able to implement a flexible maintenance program that combines preventive and predictive maintenance to meet the needs of their business.

Fleet management technology plays a crucial role in key strategic areas of the business, as highlighted by the latest trends in the Fleet Management Technology Trends survey:  36% of GPS fleet management users improved vehicle maintenance.

Move your fleet and business forward

Businesses that use advanced fleet management technology gain a significant advantage, enabling them to achieve substantial improvements in efficiency, sustainability, competitiveness, and profitability.

Sources: 

• (1)Thomas, J., S. Huff, B. West and P. Chambon. 2017. Fuel Consumption Sensitivity of Conventional and Hybrid Electric Light-Duty Gasoline Vehicles to Driving Style, SAE Int. J. Fuels Lubr. 10(3):2017, doi:10.4271/2017-01-9379.

• (2)Oak Ridge National Laboratory. 2017. Sensible driving saves more gas than drivers think.

• (3) https://www.sustainablelivingguide.com.au/teach-energy-efficient-driving/

• (4-5-6-7-8-9-10-11-12) IDAE Research