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9 ways to mitigate rising fleet management costs
Trucking fleet

Fluctuating fleet management costs: 7 ways to be prepared

December 13, 2023

The trucking industry has not been alone over the last few years in mitigating higher prices for the goods and services required operationally. Inflation, high volatility in fuel costs, and fluctuating interest rates have put business leaders on the defensive. Price hikes over the last few years have involved everything from windshield wipers, to fuel, to labor, putting many fleet business owners and managers under pressure to find ways to save on costs. In these uncertain times, understanding the complexities, and considering creative ways to manage your fleet can help improve your bottom line and keep your fleet of drivers moving.

Thankfully, according to the American Trucking Association, parts and labor costs did drop in the second quarter of 2023, giving us all some much-needed relief, however it is important to shore up for future fluctuations and find cost savings to prepare for the possibility of future downturns.

The labor shortage and its impact on fleet management

The 3.7% rise in maintenance costs during 2022 was primarily due to increased labor rates. In just a year, overall labor costs jumped 14.2% and the cost for parts increased by 8.8%. Fleet businesses were faced with paying more to recruit and retain skilled and sought-after technicians to keep their fleets operating.

The labor shortage continues to be a problem across the U.S. with unemployment falling to a record low in 2023. Low unemployment impacts wages because with fewer applicants companies raise wages to woo the workers they need. As wages go up, many companies must compensate by raising prices, all impacting a fleet manager’s bottom line.

Global supply chain issues continuing to impact fleet operating costs

While experts predicted supply chains would normalize in 2023 that has not happened. It’s hard to say why big and small retailers continue to experience supply chain issues. 

Continued supply chain issues have caused a freight shortage in the trucking industry. This freight shortage is the result of a variety of factors:

  • Disruptions caused by the pandemic still impacting the supply chain 
  • Capacity constraints
  • Increasing freight rates
  • A severe driver shortage
  • Demand for consumer goods falling as the cost of living increases
  • Decrease in U.S. manufacturing orders
  • Imported goods from China falling by 40% so fewer cargo ships are arriving in U.S. ports 
  • More trucking companies forced to bid on fewer loads

Some have gone so far as to call this state of affairs a trucking recession caused by a ripple effect in the industry. What happened in one sector of the industry – ocean freight – rippled industry-wide creating an overall decline in 2023 economic activity, and causing trucking companies to jockey for a smaller supply of loads.

Seven creative ways to weather the storm when facing increasing fleet management costs

While costs have improved in 2023, it is still important for fleet managers to be prepared for a possible recession in 2024 or any unexpected events that impact the global economy. With that in mind, here are seven ways to weather any economic storm that might be heading our way.

#1: Fleet leasing

Shifting from owning to leasing vehicles is one way to minimize repair and maintenance costs for your trucking company. Fleet businesses benefit from newer equipment, yielding better fuel economy. Best of all, leasing does not require a large capital investment and it comes with tax benefits when you deduct the cost of a lease at the end of the year.

#2: Prioritizing fleet vehicle repairs

Labor, parts, and maintenance costs take a big chunk out of your budget. Prioritizing the types of repairs you perform each day can help keep your fleet of trucks on the road. Start with safety or necessary repairs, followed by service or standard maintenance repairs.

#3: Creatively managing parts inventory to stay on top of fleet maintenance

Some fleet businesses stock up on inventory so they don’t have to be concerned about running out of parts. While it is impossible to stock up on every part, some foresight helps get broken down vehicles back on the road faster. Other strategies like searching for alternative or aftermarket parts, pre-ordering parts that are expected to need to be replaced, repairing instead of replacing parts, and using your network of repair shops and partners will help minimize downtime.

#4: Partnering with roadside service providers for your truck drivers

To keep fleets moving, it’s helpful to have good partners to provide your drivers with roadside assistance. When you partner with one or more maintenance companies, you can work together to quickly service your drivers where they are located in the case of a breakdown.

#5: Use your fleet card tools to help you keep costs down

The most technically advanced fuel cards give you powerful tools to reduce your spending, regardless of your fleet size. For example, WEX fleet management solutions provide automatic fuel expense tracking, enhanced security, and detailed reporting. 

With powerful mobile applications, you can access your account and your fleet’s activity 24 hours a day, seven days a week. Advanced software puts overall fleet operations at your fingertips, including vehicle location and driver purchases.

#6: Engage your fleet of employees and contractors with operational change

Instead of dictating changes from upper management, involve employees and contractors in coming up with the best solutions to cultivate a collaborative work environment. When your employees are engaged in the decision-making process, they are more likely to accept and embrace the changes that are best for your business. They are also more likely to remain loyal to you helping reduce attrition for your trucking business.

Educate your employees about your vision for the future of your fleet. Why is your business different? What sets you apart from other fleet companies? Why should a driver or technician work for you over another trucking business? By instilling a sense of purpose in your company’s mission and vision, you will attract and retain the best employees.

#7 Always be on the lookout for ways to improve your fleet business

Trucking businesses that can embrace new technology and creative solutions will be best positioned to navigate financial challenges in the years to come. By using better channels of communication and collaborating with your network and your workforce, you will more readily solve problems and save money along the way. And, as always, continue to look for ways to improve operationally so you can weather the storm and keep your fleet moving.

To learn more about WEX, a dynamic and nimble global organization, please visit our About WEX page.

All fleet cards are not the same, and different types of fuel cards suit the needs of different kinds and sizes of businesses. View WEX’s fleet card comparison chart to see which fleet fuel card is right for you.

Apply for a fleet card today!

Editorial note: This article was originally published on November 2, 2022, and has been updated for this publication.

And check out our infographic below for five steps on taking control of your fleet tire stock.

American Trucking Association
Smart Trucking

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