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The Reasons Why You Should Track Your Fleet Costs

There are numerous challenges involved with running and managing a fleet. One of the most important of them is controlling fleet costs. This is because not properly tracking your fleet costs could have a negative impact on profitability and might also harm your business as a whole.

Professionally managing fleet costs is one of the best ways to ensure that you make decisions that will boost the company’s profitability because they are based on reliable data. It also enables management to develop a clear understanding of how and where funds are being spent and thus determine areas where cost savings are possible. The easiest and most cost-effective way to do this is by using specialized software.

Let us examine in more detail how tracking your fleet costs can help your business.

Tracking Fleet Costs Is Necessary In Order To Calculate The TCO or Total Cost Of Ownership 

The total cost of running a fleet consists of both a fixed and a variable element. Fixed costs include things such as lease payments or loan repayments, permits and licenses, depreciation, and taxes. Since there isn’t much the company can do to reduce these costs, we will instead focus on controlling the second element: variable costs.

Variable costs depend on the size of your fleet and what you use it for. Examples include expenses such as fuel, toll fees, replacing defective parts, and routine maintenance. Unless you know what these costs are, how they vary over time, and from vehicle to vehicle and driver to driver, you will not be able to make data-driven decisions on how to reduce them. While this can be done with the help of spreadsheets, it will most likely be more time- and cost-effective to use cloud-based fleet management software.

It Will Help You To Control Fuel Expenses 

For many fleets, fuel is their biggest ongoing variable cost. Although you can do nothing about the price of fuel, there are many ways in which you can manage and reduce fuel costs. One of them is to track the total fuel consumption of every vehicle over time and to compare it with historical data and with other similar vehicles.

If the cost-per-mile of a vehicle suddenly starts to show a sharp increase, the reason has to be determined. It could be e.g. caused by a mechanical problem or a new driver might have a different (and costly) driving style.

You Will Have The Necessary Data To Draw Up A Sound Fleet Maintenance Plan 

It might never be possible to prevent all unplanned breakdowns, but by following a preventative maintenance system they can be reduced to the minimum. Such a system will ensure that the vehicles in your fleet remain well-maintained at all times. Without properly tracking fleet costs, however, you will not even know when it’s time for a specific vehicle’s next regular oil change, service, or parts replacement.

You Will Know When It’s Time To Retire a Vehicle Or Retrain Its Driver 

If you properly track fleet costs, you will know when it’s time to get rid of a particular vehicle. If despite regular maintenance, and ruling out other possible causes, the running costs of a vehicle start to increase significantly, the time might have arrived to retire it.

Of course, other factors can also play a role – and with proper data, you should be able to easily find the culprit. The firm might e.g. recently have appointed a new driver and he or she could have driving habits that place unnecessary strain on brakes, tires, the engine, the gearbox, etc. One or two training sessions might be all that is needed.

The Bottom Line 

Not keeping track of fleet costs is a bit like driving without headlights on a treacherous mountain road in the middle of the night. Something unpredictable is likely to happen sooner or later. Let Efficiency Enterprises help keep your fleet running smoothly with our fleet management partnership. Contact us to learn more.

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The Importance Of Fuel Saving In Fleets

For businesses that rely on their fleets for generating income, the reality of ever-increasing fuel prices is having a major impact on daily operations. It makes it very hard to plan ahead to ensure the survival of the firm. That is why an increasing number of fleets are switching to telematics and fleet management solutions to track and reduce fuel consumption.

The Impact Of Fuel Consumption On Running Costs 

According to data published by the American Transportation Research Institute in its 2020 Analysis of the Operational Costs of Trucking study, fuel on average represents 24% of a modern fleet’s MOC or marginal operating costs. To express this in a different way: if the fuel price increases by $0.50 per gallon, it will increase the running costs of an average truck by no less than $7,000 per year. If you have a fleet of 15 trucks, that equates to more than $100,000 a year.

The Increasing Importance Of Sustainability 

One more reason to take fuel consumption very seriously is that sustainability has become very important when shippers have to make a decision about the carriers they partner with. More and more of them want to know what a carrier is doing to reduce its fleet’s fuel consumption before accepting it as part of the team. 

It’s not difficult to understand why. The transport industry is one of the 6 biggest sources of dangerous greenhouse gasses in the world and accounts for around 28.9% of all global emissions. And there is a direct link between the amount of carbon dioxide a vehicle emits and its fuel consumption.

To quote just one example: according to EPA data, the average passenger vehicle emits around 4.6 metric tons of carbon dioxide over the course of a year. That equates to 404 grams of carbon dioxide for every mile driven. The disturbing reality is, however, that the average freight truck emits no less than 161.8 grams of carbon dioxide when transporting cargo weighing one ton for one mile. A truck carrying 10 tons will, therefore, emit 1.618 kg of CO2 for every mile driven.

Against this background, a company that is able to show that it has a successful program in place to reduce fuel consumption will undoubtedly have a better chance of getting (and keeping) business.

Improving Fuel Consumption Benefits The Community

The reason why we can safely say this is because a drop in air pollution from the transportation industry helps to improve air quality for everyone who finds themselves on or near major roads all day long. Breathing less polluted air will reduce their likelihood of getting sick and could eventually help them to lead longer, healthier lives.

Reducing Fuel Consumption Can Extend The Lifespan Of Your Vehicles

A fleet that uses less fuel also enjoys another benefit: it will help to make the existing vehicles last longer and experience fewer breakdowns. One of the biggest reasons why a fleet might experience excessive fuel consumption is because the drivers are driving unnecessarily long distances. By properly planning trips, these distances can often be reduced significantly. This will not only reduce fuel usage, but it will also reduce the wear and tear on the vehicles in your fleet, cut down on repair costs, and extend the lifetime of the vehicles.

7 Things That Can Help Reduce Your Fleet’s Fuel Consumption 

– Optimize vehicle speed

– Start using tires with a lower rolling resistance

– Use tools that will help cut down idle time

– Educate drivers on fuel savings techniques and reward those who follow them

– Make sure that vehicles and equipment are properly maintained

– Use the right trailer aerodynamics

– Make sure that you use the correct axle configurations

Want to learn more tips for managing your fleet? Let Efficiency Enterprises help! Contact Us today!

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5 Ways To Improve The Efficiency Of Your Fleet

Fleet efficiency has become a buzzword that everyone in the transport industry seems to be talking about. Not everyone seems to know what exactly the term means though, and even fewer of them understand how to actually run a fleet more efficiently. If that sounds familiar, below we provide a brief explanation of what is meant by the term fleet efficiently. This is followed by a couple of practical steps that can be taken to achieve this objective.

What Is Fleet Efficiency? 

Fleet efficiency is the science (some would call it an art) of optimizing all the different assets that form part of a fleet, including drivers, trucks, delivery vehicles, cars, containers, trailers, and even office staff in an efficient manner.

How To Improve Fleet Efficiency 

Enough of the theory. Let us now proceed to some of the more practical aspects of improving fleet efficiency.

Improve Driver Behavior 

Help your drivers by studying their driving style and giving them feedback and tips on how to improve it. One way to do this is to utilize driver behavior software to monitor their driving habits and then recommend improvements. This system can also be used to reward drivers who follow these recommendations, which can in turn help with driver retention.

Make Maintenance a Priority 

Regular maintenance of all vehicles in your fleet will help to ensure that they always perform at optimum levels. You will also help to prevent costly roadside breakdowns that are likely to negatively impact productivity and customer retention. Keeping tabs on something as simple as tire pressure will not only help to lower wear and tear but will also reduce fuel costs and improve safety compliance.

Track The Service History Of Your Fleet 

Studying your fleet’s service history with the aid of fleet management software will help your business to improve fleet efficiency in the future. Not only can this software keep track of maintenance data in real time, but it also stores a comprehensive record of every past service. This helps fleet managers to analyze data from the past to pick up maintenance trends and then create ways in which your maintenance plan can be improved.

Utilize Your Fleet More Efficiently By Reducing Idle Time 

Using assets in a cost-effective manner is a major part of running a fleet efficiently. In this regard, idling is a notorious offender that should be minimized as much as possible. When it comes to the most common causes of unnecessary idling time, these are the main offenders:

– Drivers warming up the engine for an unnecessarily long period of time

– Drivers letting the engine run even when the vehicle is not in use

Unnecessary idling is one of the worst culprits concerning fuel misuse. That is why a significant number of U.S. states (and many countries) have in recent years passed strict anti-idling legislation. 

Reduce Fuel Costs By Properly Planning Vehicle Routes 

While lowering idling times will help to improve fuel usage, proper routing can play an even bigger role in helping to run your fleet efficiently. Issues such as traffic jams, road closures, natural disasters, and accidents can all work together to make one route less efficient than another one. When choosing one route over another, the aim should always be to minimize mileage while not compromising delivery times. Fleet management software can once again come to the rescue because of its ability to produce customized maps. By properly using this feature, fleet managers are able to choose from among different routes based on solid data and thereby improving the efficiency of their fleets.

For more information on how to better manage your fleet contact Efficiency Enterprises today! 

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8 Ways to Cut Down on Fleet Operation Costs

Managers are always looking for ways to bring down fleet operation costs and make their businesses more efficient. Luckily there are easy, cost-effective ways to bring down fleet costs while also improving the longevity and safety of your trucks.

1. Proper Driver Training

The easiest way to bring down fleet costs is to invest in training your drivers in fuel-efficient driving practices. Bring in defensive driving instructors to teach your drivers to drive slowly and cautiously. Instigate penalties to discourage aggressive driving, which can cost you up to a dollar per mile on some trucks. Multiplied across your entire fleet, driver training can make a big difference for your bottom line.

2. Carefully Monitor Tire Pressure

 Tire pressure can have a very large impact on your fleet’s fuel economy. The farther away from the manufacturer’s recommended PSI your tires are, the less fuel-efficient your vehicles will be. Weekly or daily checks can ensure that you are staying within the ranges recommended by tire manufacturers.

3. Run Vehicles in Shifts

Every driver does not need their own vehicle. Having your fleet vehicles operating in a morning and afternoon shift reduces the number of vehicles you need to operate while increasing fuel economy (reduces fuel used on startup and warm-up, especially in colder climates). If you move to a shift system, be aware that increased run time on vehicles will lead to slightly increased maintenance costs.

4. Reduce Miles Driven 

The fewer miles your vehicles cover, the less fuel and maintenance they will require. Investing in a quality fleet vehicle tracking and maps software can greatly reduce miles driven by avoiding inefficient routing. The better organized your fleet is, the more efficient it will be.

5. Lower the Cost of Your Fuel

Research the different company fuel cards that you give to your drivers. Depending on the company you get your cards from, you can receive discounts on fuel and other benefits that will help you reduce costs. Several cards will give you as much as 0.15$ off a gallon which can add up to big savings when multiplied by the size of your fleet.

6. Consider the Lifecycle of Your Vehicles 

 Often companies will mandate to keep vehicles in service for longer than they are operationally viable to avoid the cost of buying new vehicles. This increases overall fleet costs because as vehicles get older their maintenance costs will increase exponentially. New vehicles will require less maintenance and will have better fuel economy, making getting the lifecycle of your vehicles right a top priority for reducing fleet costs.

7.  Consider Resale Value

When buying fleet vehicles, consider what will allow you the best resale value. The easiest way to ensure a higher resale value is to buy trucks in neutral or high-demand colors. White vehicles are proven to have the highest resale value of any color. Keeping detailed maintenance records that can be provided to potential buyers is also proven to ensure a higher resale value.

8. Buy or Rent Vehicles in Volume 

Buying or renting your fleet vehicles in volume allows you to negotiate a lower price per vehicle than if you were to buy vehicles in smaller groups or individually. Volume purchasing requires good forecasting of your business’s needs and requires more capital, so make sure you are prepared before attempting to buy in volume.

Decreasing the operating cost of your fleet is a great way to make your business more efficient and increase profits. Implementing any of the simple solutions provided above will go a long way to making your fleet safer and more cost-effective. Let Efficiency find the best solution for your business!

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Top 5 Fleet Costs You Need To Monitor

Despite their many benefits, fleet vehicles can be a headache for business owners.

Fleet vehicles are an excellent way to improve the speed and efficiency of transportation and other company logistics, but they can also have hidden costs associated with them. Managing a vehicle fleet is a balancing act of price and value that needs to be monitored closely to ensure the success of your business.

Fuel

Fuel is likely going to be the biggest expenditure associated with any fleet of vehicles. According to the U.S. Department of Energy, the average vehicle consumes about 684 gallons of gasoline each year. That can add up quickly if you have a large fleet of trucks or vans. Since it’s not something you can control, tracking fuel consumption will allow you to determine how much fuel was used for each vehicle and what the average cost per mile is. This data will help you make informed decisions about how much to budget for gasoline.

Employee Wages

Driver wages are an important consideration when overseeing a fleet of logistical vehicles. A lot of companies will use a driver wage calculator to determine the value of their drivers, but that may vary based on a number of factors from location to productivity level.

Many companies have started to use telematics solutions to monitor the performance of their fleets, which enables them to keep track of how much fuel is being used by each vehicle and how many miles are being driven by each driver. This allows them to get a more accurate idea of what kind of salary they need to pay each individual employee in order to keep their fleet running smoothly.

Maintenance and Repair

The cost of maintaining and repairing large fleets of vans or trucks can be very costly. This is especially true when you consider that the ripple effects of a single-vehicle malfunction can affect your entire fleet. When you’re responsible for multiple vehicles, the costs associated with each breakdown rapidly add up. That’s why it’s important to monitor your mechanic fees and make sure they’re not getting out of control.

If you find yourself paying for more frequent repairs than usual, this could indicate that something needs to be replaced or repaired sooner than expected—and those costs will compound quickly. The price of parts alone can tally up fast, especially if you need to restore an entire engine or transmission. Plus, there are also labor charges to consider, along with the toll of downtime while repairs are being made.

Procurement of Replacement Vehicles

Fleet vehicle replacement is incredibly expensive. For example, if you have ten trucks and wish to upgrade them, you can expect to pay hundreds of thousands of dollars. This cost includes the price of the actual vehicles, along with any necessary upgrades and repairs that need to be made before they can be put into service.

Thankfully, fleet vehicle purchases can come with bulk rebates, discounts, or other special offers. These may help lower the overall price of the vehicle in order to make it more affordable for your company.

Insurance Coverage

When you’re in charge of a fleet of vehicles, you want to make sure they are properly insured. This can be a challenge because it’s hard to predict what will happen, making it difficult to know what type of coverage to get. You should always make sure that your insurance policy covers any vehicles that are part of your fleet.

The best way to do this is to get a commercial auto policy from your current provider, or with another provider if necessary. This type of policy will cover all kinds of damage and liability that might happen while an employee is driving one of your fleet trucks. It will also cover any injuries caused by accidents involving these vehicles.

Efficiency Enterprises can help you with your fleet planning and management. Let us be your partner and do the heavy lifting for you! Contact us today for your consultation.

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Commercial Truck Production Delay: Expected Through 2023?

The production of Class 8 trucks is showing some signs of improvement, but freight truck production won’t truly rebound until well into 2023, most experts are saying. COVID 19 has caused an assortment of issues in the OEM markets, and these issues have been further compounded as new variants have cropped up all over the world, leading to further shutdowns and labor shortages. The demand for Class 8 trucks and freight trailers has not gone down; quite the contrary, it has grown significantly. However, the industry has never fully recovered from the original COVID 19 lockdowns, and new lockdowns and infection rates of the Delta and Omicron variants have continued to put the OEMs further and further behind.

Labor and Parts Shortages

Despite the demand, many OEMs have had to place significant caps on the orders, as the fulfillment of orders has been difficult for the previous years. Many companies had to resort to laying off and furloughing employees at the start of the pandemic, and many of those employees have not returned. Don Ake, FTR Vice President of Commercial Vehicles, stated that “suppliers need workers desperately.” While there are shortages in truck components, specifically semiconductors, improving the supply of parts will not necessarily lead to drastically improved production. Ake continues by stating, “even if the semiconductor issue was solved on the Class 8 side, you still wouldn’t be able to get up to maximum production.” Labor shortages are affecting many industries across the globe, and freight truck production is no less a victim of this than any other industry.

The lack of parts, specifically semiconductors, is still a major issue, though. Countries like Malaysia and Japan, major producers of the vital component, have experienced new lockdown protocols and have been ravaged by intense infection rates of the newer COVID variants. Further compounding the issue is the fact that semiconductor production focused more so on household goods as trucks were taken off the road with new national and state limitations on travel. With both production of the necessary components down, and with the reallocating of where the parts go, this has led OEMs to begin making ‘red tag units’, trucks and trailers made without certain components. However, even with some of these corners being cut, the production of trucks is still running at a deficit of over ten thousand, with trailers only doing slightly better.

Optimism for 2023

There is some reason for optimism on the horizon, though. FTR projects that nearly two hundred and seventy-five thousand Class 8 trucks will hit the market this year, possibly rising to three hundred and thirty-five thousand. 2023 should see the largest increase in production, with estimates of Class 8 trucks breaking three hundred and fifty thousand and higher. Again, Ake speculates that “this is going to keep the OEM build rates elevated into 2023 and maybe into 2024.” He clarifies, though, that, “we’re in catch-up mode and we’re going to be in catch-up mode for a while.”

Despite the labor shortages and the bottle-necking of production caused by a lack of components, there is reason to be hopeful for the future of freight production. After all, the decrease in production that the industry has seen over the last couple of years is not from lack of demand, but rather from lack of production ability. As the component industries start producing at their usual rates, and as workers begin to return to the industry, the demand to get Class 8 trucks and trailers on the roads will be staggering. Most industry experts are pointing to some time into 2023 as the point where these shortages will be fixed.

Looking for a solution to your fleet shortage? Let Efficiency Enterprises help as your fleet management partner! Contact us

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Tips To Overcoming Supply Shortages for Your Fleet

Supply shortages of any kind interfere with your normal business processes, inflating prices and disrupting the flow of inventory. When your business depends on rubber hitting the pavement, nothing can bring you to a screeching halt faster than a tire supply shortage.

While you can’t control the number of tires available on the market, there are things you can do to overcome tire supply shortage and minimize the impact it has on your fleet.

Understand Why Tires Are In Short Supply

If a tire shortage causes you to cancel or alter arrangements with your client base, you’d better have a good explanation ready. Patiently walking your customer through the reality of supply and demand can be crucial to prevent the perception that you’re making excuses, and may help you maintain valuable relationships.

Tire shortages are caused when there is a rubber shortage, shipping difficulties, or increased demand in the tire market. Interruptions in the cultivation of rubber trees can lead to a long-lasting decrease in supply. As nations develop, the demand for tires may increase. The availability of shipping containers or other materials can also decrease the number of tires available for purchase.

When fewer tires are available, the overall supply of vehicles also decreases, posing a significant challenge to fleet owners who need a reliable stable to conduct their business.

Reorder now

In a shortage, there’s no such thing as ordering too early. Vehicles that usually take six to eight weeks to acquire can take six months or longer during a shortage. Evaluate your fleet and identify the vehicles that are likely to need major repairs soon, and plan to replace them with newer, lower mileage vehicles. This strategy, which is known as a life-cycle strategy, will help you keep your fleet on the road and your monthly maintenance costs fairly steady.

Preserve Existing Tires

Decreasing the effect of a tire shortage on your fleet means taking good care of the tires you already have.

The first step is to institute a tire rotation schedule. Regular rotation of tires ensures that they wear evenly, and have treads of similar heights. Tire life is reduced when you run a vehicle with different sized tires on the same axel.

The other crucial part of keeping your fleet’s tires in good condition is avoiding underinflation. Severe underinflation is known to contribute to tire failure, a safety issue that all drivers and fleet personnel are keen to avoid. Even a slightly underinflated tire will wear out more quickly than a properly inflated tire, and yet checking tire inflation often falls off the list.

A tire pressure monitoring system (TPMS) can be installed directly on the vehicle, sending data back to a centralized source in real-time. A TPMS can be mounted on the tire itself, on the rim, or on the valve.

An alternative to installing TPMS on every vehicle in the fleet is the purchase of a single-station automated tire inspection system. Rather than tedious manual checks, an automated tire inspection system merely requires the driver to position the vehicle over the sensor plate. The tread and pressure are automatically measured and stored, providing valuable data that can be used to optimize your maintenance schedule.

Consider a Fleet Partner

Navigating fleet ownership is difficult enough when you’re not trying to overcome a tire supply shortage. Let Efficiency be your partner. As an expert advisor with industry connections, Efficiency can be a valuable resource to your business. We just might give you the boost you need to stay ahead of your competitors. Contact us today to discuss the right fit for your business.

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Boost Your Fleet Management Solution With These 6 Steps

Regardless of the size of the business, managing a fleet of trucks can be both stressful and complex. From fuel costs to truck maintenance, hiring the right staff, and training them, fleet managers have an unenviable job. Fortunately, technological advances are rapidly starting to make the process a lot easier. Below are a few tips on how to boost your fleet management solution.

1. Choose the best vehicles for the company’s needs

This is one of the most important tasks of a fleet manager. Depending on the type of industry that your firm operates in, procuring the right type of vehicles that best meet operational needs can make or break the business.

From strictly adhering to maintenance requirements to determining optimum vehicle replacement cycles and carefully considering disposal options can all have a major impact on the fleet management program’s success or failure.

Another important consideration here is vehicle reliability. It’s of little use if truck B costs $10 000 less than vehicle A but the direct and indirect costs of breakdowns will amount to three times that.

2. Optimize schedules and fleet delivery routes

Routes that are properly planned will undoubtedly increase customer satisfaction rates. It is crucial to provide your customers with accurate estimates for delivery times and small appointment windows. Efficiently planning delivery routes can help to shorten delivery times and will improve driver safety because there will be no need for them to rush. Ultimately this will also have a positive impact on accident rates.

3. Have an open-door policy

The fleet manager is a core part of any successful equipment and vehicle management program. His or her knowledge helps to keep track of issues and trends that might affect not only clients but also internal departments of the company. That is one of the biggest reasons why the fleet manager should always make time to listen to what drivers, clients, and other stakeholders have to say.

4. Control spending professionally

One of a fleet manager’s most important duties is to ensure the optimum use of the capital the company has available. Factors that can have a major impact on the firm’s success include:

  • Deciding whether to buy, lease, or rent vehicles based on sound financial criteria
  • Ensuring that the company gets the best financing rates
  • Taking into account tax incentives and other tax implications when making financial      decisions
  • Negotiating the best possible prices
  • Taking into account resale values and operating costs when making purchasing decisions
  • Planning for the firm’s future operational needs

5. Use technology to plan truck sizes and routes

New technologies such as GPS tracking can help drivers to arrive at their destination safely and efficiently. With proper route planning, they will be able to avoid roads with weight limits, low bridges, and heavy traffic. Drivers will also have access to live information about road closures and detours so they can choose the best alternative route. All of these can play a major role in driver safety and customer satisfaction rates.

6. Encourage safe driving habits and improve the performance of your drivers

Regular driver training is another crucial responsibility of fleet management. The aim here is to improve safety standards and efficiency. Focus on issues such as reducing fuel costs and eliminating bad driver behaviors like excessive idling, hard braking, and speeding. Probably the best way to do this is to make it very personal. Keep track of those drivers who might need training in specific aspects of the job and make sure they get the training they need.

7. Reward positive driver behavior

Another good idea is to have an incentive program in place that rewards drivers for positive behavior. With modern technology, it’s very easy to keep track of issues such as speed fines, delivery times, accidents, etc. If the company rewards those drivers who perform best in these areas it will motivate other drivers to improve. In the end, it will reduce costs, improve customer satisfaction, and benefit the whole fleet’s efficiency.

Want to discuss more fleet management solutions for your business? Let Efficiency help! Contact us.

Sources:

https://www.mixtelematics.com/blog/11-tips-for-improving-truck-fleet-management
https://www.mixtelematics.com/5-ways-to-make-your-fleet-more-efficient
https://info.rastrac.com/blog/improve-fleet-management-operations
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