by WEX Fleet
Fleet optimization isn’t just for large fleets. Small businesses often operate on thin margins. An underperforming delivery fleet can cause significant negative impacts by ratcheting up fuel costs and frustrating drivers.
Luckily, there are many ways small businesses can drive down costs by optimizing fleet management. Some of these solutions are high-tech, such as utilizing affordable route planning software, and some are common sense, such as incentivizing drivers.
A recent article in Forbes offers sterling tips for small business owners and managers who are interested in optimizing small delivery fleets:
Find the Most Efficient Routes
All fleet managers recognize that one-way trips, long-distance trips, and trips with deadhead are not cost effective. Data is your friend in order to understand which routes are profitable. The best place to begin involves “scrutinizing routes that are profit-makers and -breakers.”
Forbes advises finding a “sweet spot” of efficient routes: ones that are “multi-pickup, multi-drop, nonstop and highly repeatable.”
Desirable routes tend to be short hauls. Matching the right vehicle for the route is also a top consideration. Assigning your most fuel-efficient vehicles to cargo deliveries immediately lowers fuel costs for many small delivery fleets.
Use Fleet Management and Optimization Tools
According to Forbes, better-run fleets see only between 20 and 30 percent of their total fleet miles driven as empty miles, or deadhead. Many fleets run at 50 percent deadhead, which represents a huge drain on fuel efficiency.
With fuel usually clocking in at about 25 percent of fleet operating costs, optimization software can help managers create more fuel-efficient routes by finding “continuous move opportunities” for vehicles so they don’t sit idle for long.
Fleet management and optimization software doesn’t have to be expensive. With the subscription model, small businesses can pay a low monthly fee for a minimal tracking software package.
Use Data to Break Expenses Down to a Per-Mile Cost
According to Forbes, “it’s not enough to maintain spreadsheets full of maintenance cost figures, insurance expenses, driver wage figures and fuel costs, unless the data is analyzed.”
When managers break down expenses on a per-mile cost, they can easily compare their operating expenses with carriers-for-hire in their area. Sometimes the most cost-effective course of action is to hire out for some deliveries.
Don’t Forget Incentives
Michael Cote, vice president of sales for Novatel Wireless, told Forbes that the carrot is far more effective than the stick for recruiting delivery drivers who “really want to compete and do well. A system of rewards can accelerate the improvement of drivers, lowering fuel costs, maintenance costs, accidents and insurance.”
Fleet optimization should never be overlooked by small businesses. Harnessing data to find the most efficient routes and break down per-mile cost as well as utilizing inexpensive fleet management and optimization software will pay dividends for small delivery fleets.