If there has been one constant during this crisis, it is that the COVID-19 pandemic has reminded all of us that the world is an unpredictable place. Major catastrophes can happen at any time and can hit hit anyone. The only thing that trucking companies can do to help themselves and their employees during such extraordinary times is to prepare for the worst of what is to come and merely hope for the best outcome. <\/p>\n\n\n\n
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The question is, how does a fleet manager deal with these\nintractable problems? Can one prepare for such a crisis and implement measures\nthat lower their fleet\u2019s daily operating costs so that they can have extra\nfunds available to keep their company\u2019s head above water when the ship starts\nsinking? <\/p>\n\n\n\n
As a fleet manager, we know that you\u2019re already aware of\nwhat it costs to keep that fleet running on a daily basis. But why not have a\nrefresher on what operating costs are and what is incorporated in these costs?\nThese types of business decisions can save your company from catastrophic\nlosses. <\/p>\n\n\n\n
The standard definition of operating costs states that it is\nall the expenses related to the operation of a business or the operation of a\ndevice, component, piece of equipment or facility. What does this mean? Well,\nthese are the costs of the resources you must acquire to maintain the existence\nof a business or fleet. We are here to help you make sense of these resources. <\/p>\n\n\n\n
Taking a Closer Look<\/strong><\/p>\n\n\n\n What is the skinny on operating costs? The fact is,\noperating costs do not include capital costs. So what do capital costs include?\nLet\u2019s take a closer look:<\/p>\n\n\n\n The question now is, what are the operating costs? Fleets\nboth large and small must deal with unexpected costs. How will companies adjust\nto these new paradigms? Many trucking companies are wrestling with these very\nquestions. <\/p>\n\n\n\n The question is, how will a modern company address overall\noperating costs? Let\u2019s look at each of them one by one: <\/p>\n\n\n\n Most of the costs listed above are quite variable. What is\nthe meaning here? Well, they are seen as more fixed. Still, these costs also\nvary depending on how many accidents a particular fleet gets into and whatever\ntheir yearly premium increases are. Costs will also vary depending on fleet\nsize, vehicle types and the purpose the fleet is being used for. The question\nis: How can a fleet reduce these costs?<\/p>\n\n\n\n Reducing Fuel Costs<\/strong><\/p>\n\n\n\n Fuel is one of the largest expenses a fleet deals with. This\nproblem is magnified in times of crisis when global markets are down. What\nother factors influence fuel prices including supply and demand, weather\nforecasts, imports and exports, gas storage, regulations and much more?<\/p>\n\n\n\n The problem is that many of these factors exist outside of a\nfleet manager\u2019s sphere of control. The good news is that fleets do have control\nover keeping an eye on how much fuel the fleet consumes and then implementing\nmeasures to reduce that amount. But how can a trucking company do that?<\/p>\n\n\n\n If a particular job does not require a large van or truck,\nwhy use one? It\u2019s a fact that the heavier a vehicle is, the more fuel that\nvehicle will use. This fact is not only because of these vehicles but also\nbecause they tend to have more powerful engines that need larger amounts of\nfuel to handle heavier loads. <\/p>\n\n\n\n In addition, heavy-duty commercial motor vehicles spend far\nmore time idling. Typically, a truck idles for nearly 2,000 miles per year. As\nsuch, it is estimated that rest-period truck idling in the U.S. consumes nearly\na billion gallons of fuel. How much does this amount of wasted fuel cost? Too\nmuch. Thus, using a truck or other heavy-duty vehicle for jobs not required for\nthose vehicles is a huge waste of time and resources. <\/p>\n\n\n\n When purchasing commercial motor vehicles for your fleet, you need to look at how fuel-efficient they are. While you can consult lists that name the most fuel-efficient vehicles or talk to dealers on what kind of purchase you should make, it is important you complete your due diligence. The question is, what should you look for?<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n First, make a shift towards lighter vehicles. Why? Because\nheavier vehicles guzzle fuel like there is no tomorrow. Remember, you can\ndowngrade to smaller engines without downgrading the class of vehicle. For\nexample, switch from a 6-cylinder to a 4-cylinder. In many cases, a smaller\nengine can have nearly the same horsepower as a larger engine especially if you\nare operating in tight urban environments. <\/p>\n\n\n\n Other Fuel Considerations<\/strong><\/p>\n\n\n\n When you are selecting and purchasing vehicles, you need to\nmake sure to take note of capacity problems. What should be the maximum weight\nload? The fact is, this is important as overloaded vehicles increase fuel\nconsumption, which costs you both time and money. Did you know that for every one\npercent reduction in weight, there is a 0.33 percent improvement in fuel\neconomy? Likely not, but over time, these fuel issues compound. <\/p>\n\n\n\n But how do you significantly reduce your overall fuel\nconsumption? First, you should definitely look into optimizing your fleet\nutilization. When you are properly utilizing your fleet, you are getting the\nmost out of them. Don\u2019t waste your fuel by not paying close attention to fleet\nutilization. Perhaps a telematics solution you can use to monitor your entire\nfleet\u2019s movements and usage would help? When you have effective data at your\ndisposal, you have more options.<\/p>\n\n\n\n Consider the following when you are evaluating your\noperation:<\/p>\n\n\n\n Just remember, saving costs is about more than conserving fuel. Have you considered how the insurance costs you pay are crippling your business? The thing is, many trucking companies believe they don\u2019t have any control over their insurance costs. The thing is, they absolutely do. You might think that there\u2019s not much you can do to reduce your insurance costs but there are actually many ways. <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n The question is, how does your fleet impact insurance costs.\nFirst, have a look at your record.<\/p>\n\n\n\n