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Resource Center 9 Profitable Fleet Tips (Beat Inflation, High Fuel Prices, & Recession)

9 Profitable Fleet Tips (Beat Inflation, High Fuel Prices, & Recession)

September 26, 2022 Tyler Linn

Running a profitable fleet or trucking business is no easy task. There are plenty of factors to consider in order to keep things running smoothly and efficiently. But what do you do when economic conditions take a turn for the worse? You may already be losing up to 65% on the most common fleet investment as it is.

There are still ways to run your fleet in a cost-effective manner and maintain a profit, even in tough times. In this article, we’ll share some tips on how to stay profitable even during inflation, high fuel prices, or a recession.

Let’s dive in…

1. Calculate the Cost of Your Fleet Management Strategy

Image of processing paperwork for accounting in businesses
Photo by Pixabay

Calculating the cost of your current fleet management strategy is critical for making future adjustments.

First, you’ll need to take into account the costs of the essentials before moving on to the rest of your strategy. These costs can vary widely depending on your industry. Likewise, the scope of your operation and other aspects unique to your business will play a factor. Whether you run a trucking company, rental fleet, taxi service, or service business, you’ll need to nail down the essentials.

Standard Fleet Operating Costs Include:

  • Staffing
  • Office Expenses
  • Yearly Fees & Certifications
  • Taxes & Insurance
  • Software, Technology, & Tools
  • Fueling
  • Vehicles & Maintenance

By taking all of these factors into account, you can get a more accurate picture of the baseline cost of your current fleet management strategy and navigate the more irregular expenses from there.

This is the first step toward running a profitable fleet business.

2. Reduce Fuel Consumption With Better Driving Techniques

Image of a Gas pump - using a fuel card can help you spend less time at the pump and get you the best prices
Photo by Engin Akyurt

Fuel Savings Techniques

With high fuel prices, cutting consumption has become a top priority for many fleet managers. Fortunately, there are a number of simple techniques that can help to reduce fuel usage. And of course, always avoid idling whenever possible.

Choosing a Fuel Card

Similarly, make sure to choose a fuel card that fits your business. Almost all cards offer discounts and rewards, so the trick is to pick one that will reap the largest benefits for your operations and increase profits.

Slow Down

Finally, don’t forget that one of the most effective ways to reduce fuel consumption (and improve safety) is to simply slow down. Driving at 75 miles per hour rather than 65 can increase fuel usage by 27%, so lowering speeds can have a significant impact on your bottom line.

For all of our best tips on how to reduce fuel costs, read our in-depth fuel-saving tips article here. Here’s a short summary:

9 Fuel Saving Tips

  1. Identify and Manage Excessive Idling
  2. Improve Navigation & Delivery Schedules
  3. Reduce Theft & Unauthorized Fuel Purchases
  4. Reduce Excessive Speeding
  5. Reduce Aerodynamic Drag
  6. Preventative Maintenance
  7. Improve Driver Habits
  8. Use Telematics Tools
  9. Fuel Cards

By following these simple tips, you can make a real difference in your fleet’s fuel consumption.

3. Vehicle Purchase & Maintenance Expenses

Several trucks from a trucking fleet

Vehicle Financing

Every business has to find ways to minimize costs in order to be successful. For fleets, one way to do this is through strategic car or truck financing. By shopping your rates against other offers, you can make sure that you are getting the best possible deal.

Additionally, by purchasing a used vehicle between 3-10 years old, you can avoid wasting money on the purchase price while still getting a quality vehicle with low maintenance expenses. For example, a $100k commercial vehicle is worth $44,800 after only three years. That’s a staggering 65% drop in value.

Stay on Top of Preventative Vehicle Maintenance

Any business that relies on a fleet of vehicles knows that an unexpected repair and downtime can be a major drain on resources. That’s why preventative maintenance is so important. By keeping a regular inspection and maintenance schedule, businesses can catch problems early and avoid more costly repairs down the road.

It’s also important to budget for surprises. No matter how well you plan, there will always be unforeseen expenses. However, by setting aside funds each month, you can help ensure that your business is prepared for anything.

By taking these steps, you can help ensure that your business remains successful.

4. Use Telematics To Track Driver Behavior and Improve Fleet Performance

Fleet Management Software -IntelliHub displays a driver's route along a map with a breadcrumb trail.

As a fleet manager, ensuring your drivers are safe and efficient is half the job. Telematics can help you do both by providing detailed data on driver behavior and performance, and feedback.

By regularly analyzing this data, you can identify trends and take steps to improve safety and efficiency. For example, if you see that one of your drivers is consistently speeding, you can provide coaching or incentives to encourage better driving behavior.

Or if you’re using a tool like DriveShield, you can automate driver coaching based on specific criteria.

In addition, you can lower fuel consumption and save time by implementing a route optimization software like Route Matrix.

By taking advantage of telematics, you can save money and keep your drivers safe.

5. Plan Routes Efficiently

Route Matrix - image of route optimization software

Modern GPS Tracking Units

Two of the greatest expenses for any fleet are wasted fuel and time. Thankfully, there are ways to minimize both of these.

To start with, you can avoid traffic congestion and wasted time by ensuring that your drivers are using up-to-date commercial GPS units. This will allow them to find the most efficient routes possible and receive live traffic updates and re-routing.

Load Carrying Costs

One way to boost profitability is to be mindful of invisible load-carrying costs. Things like mountainous terrain, heavy loads, and aerodynamic drag can all increase fuel consumption. Analyze these factors and more when choosing between loads and plan your routes accordingly to avoid unnecessarily high expenses.

Choosing Loads

One way to do this is to take into account cargo weight when looking for loads. Naturally, heavier loads greatly affect fuel economy. Similarly, take as much time as you can afford to avoid running a deadhead (driving a tractor-trailer without a paying load). It can be worth it to wait a few hours rather than returning without a load.

Negotiate Better Rates

Another way to improve profits is to learn to negotiate better rates. Building relationships with brokers and other freight providers can potentially lead to repeat business at a discounted rate.

6. Staffing

Fleet staff inspecting the fleets' vehicle

Staffing often incurs many hidden expenses. How you manage your team can seriously impact your profits.

First, take every possible safety precaution and ensure only trustworthy drivers are on staff. One way to do this is to conduct a PSP check on drivers before hiring. A clean operation will lead to lower insurance premiums, fewer accidents, better gas mileage, greater efficiency, and better service for your customers.

Second, don’t neglect staff or driver retention and training efforts. Training new talent can be riskier and more expensive than time spent on keeping your current team intact. Keeping your office team, servicemen, and fleet drivers happy and healthy will also improve your fleet’s profitability in the long run.

Finally, don’t skimp on proper training. It’s better to invest in employee development and good habits than to burn profits on bad ones. Keeping your fleet running smoothly and profitable is far easier with great training in place for your entire fleet.

7. Avoid Unnecessary Expenses

Avoiding unnecessary problems is the hallmark of a great manager.

  1. Ensure that your vehicles are always in compliance with regulations (This mitigates costly fees and tickets)
  2. Save on insurance and liability costs by hiring safe drivers
  3. Use real-time data to avoid traffic jams and other delays
  4. Call ahead to prevent detentions for truck drivers
  5. Protect your fleet from liability with fleet cameras

By taking these simple steps, you can protect your fleet and your bottom line.

8. Practice Financial Literacy

Financial literacy is key to keeping your business afloat.

Here are a few practical tips to help you run a profitable fleet:

  • Avoid unnecessary debt. If you can pay for something in cash, do so. Otherwise, only take on debt that you know you can afford to repay.
  • Have business savings. Having a cushion of savings will help you weather unexpected expenses and slow periods of income.
  • Don’t get into a cash-flow problem. Broker payments will be late, so make sure you have enough cash on hand to tide you over until the payments come in.
  • Pay attention to Broker’s credit scores (80+) and Days to Pay (<30) when looking at the load boards. This will give you a better idea of which brokers are more likely to pay on time and help you plan accordingly.

By practicing financial literacy, you can avoid common pitfalls that fleet managers face and keep your business running smoothly.

9. Fleet Managers – Make a New Plan & Stick To It

A group of fleet truckers stand in a circle

A great fleet management plan is essential for any business that wants to stay in business and maintain a competitive edge. It’s critical to develop a strong fleet management strategy that will save time and money and help you meet your business goals even during hard times like recessions, high fuel costs, and market fluctuations.

  1. It’s important to have a dedicated fleet plan. This means knowing your market, what routes you want to take, your budget, staffing strategy, and more.
  2. Considering your current budget and financial status, identify which steps your fleet can take that will deliver the largest return on investment.
  3. Find ways to automate as much as possible. This includes invoicing, maintenance reminders, load tracking, driver safety training, and more.
  4. If you have the luxury, work only with trustworthy shippers and brokers. This will save you from getting scammed, lowballed, and paid late.
  5. Invest in a good fleet management software system. This will help you track routes, dispatch vehicles, calculate costs, automate business operations, and more.
  6. Look for ways to simplify and streamline your operations. This will help you trim costs and keep your business running smoothly.

By following these tips, you can develop a strong fleet management strategy that will give your business the competitive edge it needs to succeed.

Use These Tips to Ensure a Profitable Fleet Business

A lone truck from a trucking fleet stops to refill.

As a fleet manager, it is essential to have a dedicated plan and find ways to automate and streamline your operations. By doing so, you will save time and money while keeping your business running smoothly. Invest in a good fleet management software system and use it to track routes, dispatch vehicles, and calculate costs. Finally, always be on the lookout for ways to operate more efficiently in regard to finances.

By following these tips, you can develop a strong fleet management strategy that will give your business the competitive edge it needs to succeed and earn a profit, even with high fuel costs, recession, and inflation.

Psssst… Want to see how our fleet management services can help your business thrive during a recession, high fuel prices, and inflation?

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