February 4, 2017

Fleet Operating Costs: The Actual Cost of Running a Fleet

Fleet operating costs: The actual cost of running a fleet

The intricacies of running a fleet can be quite nerve-racking. Fleet managers need to handle a plethora of things. From selecting the right vehicles to making sure that their fleet is fully compliant with the rules and regulations of the trucking industry, fleet managers have to shoulder many responsibilities.

However, one of the biggest responsibilities is to manage and minimize the costs associated with running a fleet.

This responsibility is crucial because managing the cost of running a fleet directly impacts the trucking company’s profit. If fleet managers aren’t careful, their company can experience monetary loss on a frightening scale.

Cost-Related Challenges When Running a Fleet

Unpredictability of Fuel Costs

Unpredictability of Fuel Costs

When it comes to planning, budgeting, and managing fuel costs, fleet managers need to consider many factors. They need to look into (and possibly correct) their drivers’ driving habits. Managers also need to check vehicles for possible maintenance issues that might be resulting in extra fuel consumption. Additionally, bad route management can also result in the more-than-necessary consumption of fuel.

Managing costs — because of the unpredictability of fuel costs — become extremely challenging for fleet managers, especially if they don’t have a powerful tracking tool. For example, there’s no way a fleet manager can determine if truck drivers have poor driving habits that are contributing to fuel wastage.

Fleet management software, combined with ELDs, can solve this problem.

CSA Scores and Violation Fees

How do CSA Scores and Violation Fees affect the overall cost of running a fleet

The consequences of having a terrible CSA score can be catastrophic to a trucking company. Companies with bad CSA scores have to pay thousands of dollars in violations. Shippers also avoid working with them thinking they are a risky company to work with since their CSA scores are so horrible.

A crucial element of running a fleet that should never be neglected by trucking companies is their compliance with regulations. As per several estimates, the trucking industry has paid over $15 million worth of hours-of-service fines in the month of January 2017.

It’s also important to note that the figure above is based on HOS violations alone. When you include costs associated with roadside accidents due to driver fatigue and other reasons, you can imagine how costly being non-compliant can be.

The True Cost of ELDs

The True Cost of ELDs

Because the ELD mandate is still in effect, the deadline for everyone to be ELD compliant remains the same — December 18, 2017.

Because of all the myths circulating about how expensive ELDs are, a good number of trucking companies are now under the impression that being ELD compliant would cost them truckloads of cash.

That doesn’t have to be the case.

While there are, in fact, some manufacturers offering ELDs for over $5000 in a span of 3 years (roughly amounting to $1600+ per year), there are those who offer ELDs for much less than that.

Here at KeepTruckin, our starter package only costs $20 per month ($240 per year) while our ELD Plus package costs only $30 per month ($360 per year). Also, that’s all the cost you have to pay, which means there are no additional hardware or installation charges whatsoever. That’s a massive difference in price when compared with our ELD providers.

We have a comparison chart that you can refer to if you’d like to have a better grasp of how much other ELD providers are charging.

ELD Price Comparison Chart

Having said that, trucking companies need to remember that while there are costs associated with having ELDs, they don’t necessarily have to break the bank to be ELD compliant. If anything, once ELDs are installed, trucking companies can benefit from reducing fuel wastage and the amount they pay for HOS violations since ELDs almost take care of that.

Lowering the Costs of Running a Fleet

Lowering the Costs of Running a Fleet

While there are several strategies that fleet managers can employ to lower the cost of running a fleet, I have listed six proven tips that have worked for several trucking companies.

  1. Install ELDs to reduce administrative expenses. Through ELDs, fleet managers and drivers won’t have to generate reports manually. Through the ELD’s logbook app, drivers can quickly generate reports that roadside inspectors need. On the fleet manager’s end, they can use the web-based fleet management dashboard to generate IFTA reports in seconds.
  1. Select the best possible routes. With a working GPS feature, drivers and fleet managers can carve out the best route to reach to a destination. It can minimize fuel expenditures.
  1. Improve driving habits. With the help of ELDs, fleet managers can easily monitor drivers and identify bad driving habits that may result in additional fuel expenses as well as roadside accidents. For example, if a fleet manager notices that a driver is idling or making sudden acceleration, he can be notified with a proper feedback. This way, drivers can avoid making the same mistakes over and over again. It all results in a safer driving experience as well as more profits for the trucking company. 
  1. Avoid HOS violations and the fees associated with such violations. Because ELDs give audible alarms when drivers are nearing a violation, they can easily avoid any upcoming HOS violation.
  1. Take care of vehicles. ELDs are capable of detecting vehicle faults and maintenance issues and notifying drivers and fleet managers in real time. It allows managers to prepare for the replacement parts even before drivers arrive at the home office. Lesser downtimes result in higher productivity and increased profits.
  1. Avoid high driver turnover. Because it costs, on average, over $5000 to replace a single truck driver, it pays to nurture your relationship with them. Treat them with respect and appreciate them whenever they do something good.

What’s Next?

Minimizing the actual cost of running a fleet should be one of your top priorities.

A good fleet management system and the right ELD solution can help you reduce cost and increase profits.

KeepTruckin is offering the most affordable ELD solution in the market right now. Prices start from just $20 per month. Request a free demo and see for yourself how KeepTruckin can help you reduce your fleet operating costs.

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