The Costly Consequences of Neglecting Fleet Planning

Posted by

hitanshi D.Rathod

There can be no debate that fleet planning sets the foundation for any fleet-based business, whether it may belong to the logistics industry, freight transportation or supply chain management. At the same time, the percentage of businesses who undermine the value of an efficient fleet planning is exceedingly high.

What most fleet managers fail to realize is that by not paying enough attention to the entire process of fleet planning, execution and assessment, your business can lose out on a large portion of your revenue.

How Fleet Planning Minimises Costs?

Fleet planning encompasses everything from delegating assignments to your fleet, identifying optimized routes, ensuring on-time delivery, evaluating the effectiveness of the plan and recording historical insights. By amalgamating every aspect, fleet managers can analyze the impact, consider factual feedback and discover profitable opportunities.

To know what are the unnecessary expenses that can be controlled with fleet planning, let’s dive in deeper.   

i) Reducing wasted miles: The fundamental role of a transportation-based business is to consider possible routes for covering maximum jobs in minimum miles. Unplanned journeys lead to mindless driving around the area, longer routes and travelling back and forth to cover drop/pick up locations – costing you thousands in the end.  Fleet planning eliminates such wastage with optimized routes.

ii) Controlling fuel expenses: Most fleet managers spend their maximum time in figuring out ways to reduce their fuel costs, but always fall short. At times, the smallest factors can generate greater results and that’s exactly what fleet planning achieves. By analyzing the mileage, performance and engine health of individual vehicles, fleet managers can choose efficient vehicles to reduce fuel wastage. With regular maintenance and fleet planning, fleet managers can improve vehicle fuel economy to save a minimum of $54,000 for a 300-vehicle fleet. Also, considering the previous factor of wasted miles with effective fleet planning, your business will witness a decline in fuel expenditure in many ways.

iii) Better use of fleet: Businesses make their biggest investment in accumulating its fleet. However, if the vehicles are not fully utilized, this asset can, in turn, become a liability. Fleet planning ensures that every vehicle is employed to its maximum potential and provides the business with the best chance of profitability. In fact, according to a study by Frost & Sullivan, implementing a fleet management software can result in 15-20% improvement in fleet utilization.

iv) Improving selection of jobs: Sometimes, the price of completing a job doesn’t compensate the expenses incurred for the same. In such cases, it is practical to avoid such jobs. Fleet planning considers all these factors to help your business select profitable jobs in order to put your resources to better use.

v) Minimizing operational costs: Fleet businesses often spend their revenue in compensating for expenses like overtime wages. With proper planning, fleet managers can ensure that a maximum number of jobs are completed on a daily basis without exceeding the driver hours of service. Fleet planning can also reduce maintenance cost, thereby improving engine health and vehicle life.

Fleet planning is the best way to analyze your daily operations and make better decisions for improved productivity and profitability. Experience the difference in your business by adopting a fleet management system.