Many ways to cut fleet costs

Brian Joss – Economists predict the economy will take over a year to recover from the financial challenges created by COVID-19. Many businesses have had to make difficult decisions when it comes to cutting costs. Fleet managers, in particular, need to assess every part of their fleet to determine where costs can be cut. 

The managing director of MasterDrive, Eugene Herbert, says training can reduce fleet costs in three of the top ten most expensive categories of expenses; driver downtime, vehicle downtime and the expense and difficulty associated with obtaining new parts. “An effective safety management program is of utmost importance in a well-run fleet. When training is part of this it will result in a number of benefits and reductions in expenses.

 “Training will reduce the cost associated with accidents and consequently injuries. Cost of insurance can be reduced as you will become a low-risk company and some insurance providers offer a reduction in fees if you send your drivers for training. Trained drivers will complete their job more effectively and therefore have higher productivity rates. Lastly, by investing in your employees you improve retention as you show drivers that you care about their well-being and growth.”

If this does not convince you, there is a simple method to determine the cost. “To get a quick idea of just how much crashes cost, work out the expense of all your crashes in one year and multiply it by your percentage profit margin. The final figure that you arrive at would then be how much extra revenue you need to make in sales in order to cover the costs of the crashes.

“If your crashes cost you a modest R100 000 per year and you have a profit margin of 10%, you need to generate an additional 1 million Rand worth of sales revenue to cover this cost. This is a very conservative example.

Realistically, numerous truck crashes, for example, can soar into the millions. The loss of cargo, injury to the driver, the damage to the vehicle, clean-up costs and many other expenses means truck crashes can equal much more than R100 000.”

The most important way in which to reduce the number of truck crashes is by training your drivers. “Training can correct driver behaviour that places them at risk. It also helps develop a sense of awareness that drivers can use to quickly identify potentially dangerous situations and handle it safely and effectively. Reducing the number of crashes in an organisation depends on a stringent health and safety policy and part of this is giving your driver the skills to avoid danger on the roads.

“During a time when the bottom line is being pulled very tightly, a lot of pressure is placed on fleet managers to save costs wherever possible.

Deciding which costs can be a very difficult, however, in the long-run cutting training can cost you much more,” says Herbert.

CAPTION: Balancing act: tough year ahead. Picture: Annue Spratt/ Motorpress

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