Fleet managers have one of the hardest jobs in the fleet industry. Their input into the operational proceedings for the company can have a huge impact on the revenue generated by the fleet. Of course, they are the experts when it comes to managing the assets for the company.
If you really want to provide more value to your company, you must look at your fleet as a proper business. Looking at your fleet as a collection of assets that need to be managed in a cost effective manner is not going to be as profitable for the company in the wider scheme. Whatever the use of the fleet is or the industry that it is operating in, there is one clear thing – fleet managers are always looking to optimize the fleet utilization in the company. Making use of the fleet in the best possible manner increases the revenue for the company and at the same time, it reduces the per pound cost of a shipment. That means for every route taken, the revenue increases and the number of service calls that a company can take in a day will expand. Optimizing fleet utilization also results in significantly reduced downtime for your vehicles – this includes many soft costs in itself.
There is also the aspect of underutilized vehicles in the fleet. If a fleet vehicle is not being used to the optimal potential, it becomes an unnecessary cost for the company. It is not only a depreciating asset for the fleet but also something that has to be maintained and registered – more cost than is practical for the company.
Optimizing fleet utilization is one of the key goals for a fleet manager. Fleet managers need to ask certain questions about how they can get the most out of their fleet vehicles at the lowest possible cost to the company. They need to improve fleet utilization with a strategic approach by closely examining all of the vehicles and making changes. That will in turn lead to more revenue through saving. Here is how fleet managers can increase revenue by optimizing their fleet utilization.
Deciding on The Best Fleet Size
One of the first things that a fleet manager should do is determine the ideal fleet size for the company. All the studies about fleet utilization have shown that companies will either validate that they are operating their fleet with an optimal size or they will resize their fleet to the optimal amount of vehicles. The matter of having too many or too few vehicles to meet the demands of your business is one of the crucial questions when it comes to determining the optimal size of the fleet.
Quite often, there is pushback from different departments that feel their underutilized vehicles should remain a part of the fleet just “in case” they need to be used. On the other hand, there are some management teams simply looking to minimize the number of vehicles the company has on the road. That being said, they will still look to use the remaining vehicles in the fleet. Fleet utilization has to be quite pragmatic, based on facts. It is a tough, but necessary part of the job for a fleet manager.
One of the ways in which fleet managers can maximize the revenue generated through fleet optimization is by having a multi-pronged approach. They need to look at all the different angles through which they can increase productivity from the trucks. One thing to consider is quite basic: the manner in which employees are driving the fleet vehicles. If you ensure their driving habits are monitored closely while they are on the job and encourage better driving practices, you can optimize your fleet utilization and reduce significant costs. It is important to communicate with the end users of the trucks – the truck drivers – how important it is for them to increase the productivity of the fleet. It is a crucial part of their job to do so and affects the long-term profits of the company.
There is a need to understand day-to-day applications of the fleet. This way you will be able to construct a fleet that is both efficient and profitable for the company.
Maximum Fleet Utilization
The bottom line when it comes to increasing the company’s profits through optimizing fleet utilization is to get the most out of the fleet vehicles. There is a higher tendency for fleet managers to get more and more done with as little as possible. This means they are going to be utilizing their fleet to its maximum potential. When you as a fleet manager will know exactly what you have operating in your fleet and you communicate with the drivers about how they are driving the vehicles, you will be able to determine how to get the most out of the fleet vehicles.
The fastest way to increase the fleet revenue is by increasing the fleet utilization. This will make sure that the productivity of each and every vehicle in the fleet is increased. When you have a truck that has been parked, the simple fact is that it is not making your company any kind of revenue. In fact, it is only costing your company for no reason. The money spent on maintaining the stationary vehicles can be better used in other operational aspects of the business that will actually be more efficient.
Fleet utilization, when it is optimized, will ensure a lot of savings for the company and a larger amount in profits that a company will be making every year. Of course, it is all easier said and done. This means a drastic change needs to be applied but it is not impossible to accomplish.