It might keep the economy running, but trucking has never been the most cost-effective industry in which to operate. Even with more than 60,000 jobs to fill and a driver shortage expected to double in the next decade, expenses keep going up: from an average operational cost of $1.59 per mile in 2016, according to the American Transportation Research Institute (ATRI), to $1.69 per mile in 2017. That might not sound like much, but given that the average truck travels around 116,000 miles per year , it adds up to an extra $11,600 per vehicle, just to maintain present service.
Those may not be the types of numbers commercial vehicle operators want to see in a healthy economy, but it doesn’t mean the situation is hopeless either. At Zonar, we have a long history of collaborating with customers on reducing expenses; based on this experience, below are easy strategies you can implement that pay off relatively quickly for three of the most expensive areas for most fleets.
Maintenance and repairs
Related: Understanding the whole maintenance picture
It’s no secret that fuel and vehicle maintenance are near the top of any trucking company expense sheet, with fleets reporting average fuel costs of 43 cents per mile and average repair and maintenance costs of 16.7 cents per mile, according to the ATRI. This comes to an average of nearly $70,000 per vehicle, per year. Fortunately, fuel efficiency can be improved through regular, well-timed maintenance and inspections.
Fleet managers have access to a range of diagnostic solutions capable of monitoring factors such as tire pressure, engine functionality, and miles driven, and even distinguishing between repairs that are needed immediately and ones that can be carried out whenever the truck returns to its home base, preventing costly tows. Having a connected vehicle can reduce service cost by 22% and increase up time by 6% by having realtime, actionable diagnostics data.
Related: Arguments over driver shortage, compensation are actually pretty similar
Businesses that use tools and solutions to help with pre- and post-trip inspections are are able to identify potential issues before they become a crisis, which also goes a long way in saving money and time. In fact, with the right solution, managers and drivers can reduce the processing time for inspections by more than 50% by shifting from traditional paper-based driver vehicle inspection reports to an electronic process. A well-maintained vehicle is a more efficient vehicle, and it’s cheaper to fix a vehicle in the shop than on the road.
Inefficient routes and schedules
Effective fleet managers are often the unsung heroes of commercial trucking companies; their ability to strategically schedule trucks on the roads is a key ingredient in providing faster, more efficient delivery services. Not only has this skill become even more important to a trucking company’s operations, tools like electronic logging devices (ELDs) and a wide range of planning and scheduling software can be leveraged to help them out.
Managers have to balance improving service with improving the driver experience and reducing detention time, as well. One survey of 257 carriers and owner-operators found that 63% of drivers spent more than three hours waiting at docking facilities, and only 3% of those drivers reported receiving detention pay for at least 90% of their claims. (Not that detention fees even begin to equal the cost of lost time to begin with.)
With the right tools at their fingertips, fleet managers can do something about that. By teaching drivers how to use ELDs to report overlong detention times and collect the data needed to back it up, managers can not only improve their chances of collecting detention pay but identify which facilities to prioritize and which to avoid.
Another bonus: more efficient routes use less fuel.
High driver turnover
Even if you go by the lowest estimate of 16% of a position’s annual salary, the fact that an average truck driver earns $40,000 per year means it costs at least $6,400 to train a new employee. Meanwhile, the ongoing driver shortage means it’s not only cheaper but also smarter for your business to retain your existing drivers than to replace them.
So how can trucking companies and their fleet managers ensure turnover remains low? One method is improved training: By explaining how to work with, not against, the ELD standards – for example, by accurately recording and reporting detention time – fleet managers can often make life easier for their drivers.
Gamification is another possibility. Many ELD solutions, combined with in-cab video, can track safe driving behaviors such as adhering to safe vehicle speeds, a feature employers can use to reward drivers who consistently stay within the speed limit or who complete the most safety training sessions in a quarter.
Route planning can play a role as well: Calculating routes that are closer to a driver’s home so they remain near their families, matching specialized drivers with the routes that most need them, and accounting for worst-case scenarios within the 14-hour limit can go a long way to improving morale.
Though these suggestions may seem obvious, it’s often easier to continue the same processes and actions that actually cost a business money rather than committing to small changes that can make a positive difference. By investing in, and leveraging, the right technology and making a few behavioral changes, fleet managers can save their organizations and drivers both time and money – which translates to more time on the road and happier drivers!
The above article was originally published by FleetOwner and written by Gary Schmidt, vice president of business solutions at Zonar.
