The international accepted format of managing a fleet effectively, is that of Assets, Fleet Operations, Driver and Safety Management.

The above is all related in determining the actual Total Cost of Ownership (TCO) or Cents per Kilometer (CPK)/Cents per Hour (CPH) cost of a Vehicle.

Asset incorporates: Vehicle selection, Funding methodology, Vendor selection, Purchasing through to Resale of vehicle.

Managing the depreciation influencers, during the life cycle of a vehicle can result in a significantly improved Resale Value at the end of vehicle lifecycle in your fleet. Depreciation as a percentage of the Retail Price is normally between 35% and 47%.

Fleet Operations incorporates: Maintenance (*11% to 17%), Tyres (*6% to 14%) and Fuel (* 45% to 70%) Costs.

*With Passenger and Light Commercial Vehicles costs are measured as a Percentage (%) of the original Retail Price. In the case of Commercial Vehicles same are measured as a % of the net Funded Value inclusive of Accessories and Body fitments.

Note: These values can differ dependant on the operational or conditions of vehicle usage.

Controlling these costs and managing change processes to achieve savings, will result in an improved Total Cost of Ownership (TCO).

Having all of these costs reflected in a Fleet Management Information System (FMIS) and managing the exceptions against stated objectives, will allow the fleet manager to make objective decisions to reduce costs.

Driver, Safety and Risk Management incorporates: Vehicle and Drivers Licence Renewals, Company policies managing all aspects of Vehicle usage and Drivers, Driver Training, Accident Management, GPS/Tracking and Reporting.

Ensuring that Vehicles and Drivers licences are renewed timeously, safe guard companies against Insurance claims not being paid and possible law suits.

Company policies governing Drivers eligible to drive company vehicles, rules around Car Allowance vehicles, Driver training required to improve driver quality and vehicle safety procedures following COVID all contribute to a better and improved fleet operation with reduction in costs.

It is a stated objective – “That unless the behaviour of a Driver can be changed, no savings will be achieved”

Fitting a reputable good GPS/Tracking unit to fleet vehicles, that can report on the aspects that cost a fleet owner money such as speeding, harsh braking, excess idling to name a few, will have a direct savings result in fleet operating costs.

Example: Reducing speeding, harsh braking, and excess idling, will have a direct influence of reducing maintenance, tyre and fuel costs. Furthermore, less accidents and fines received by driver.

Accidents and increased vehicle costs have a direct effect on the Resale Value on termination of a fleet vehicle.

Although the AARTO demerit system and process surrounding same, was found to be unconstitutional, the problem of fines received by drivers still exist.

Companies should be aware of the number of fines received by a driver and for what reason.

Example: Drivers receiving fines for speeding can result in more accidents, This can become an HR problem with own associated increased costs to the company.

Looking at Fleet Management in the greater picture, it is important for a company operating a fleet to invest in a tried and tested Fleet Management Information System (FMIS), Driver Training done by a recognised training vendor and a reputable GPS/Tracking system supplier.

By investing in the above the company will experience a change regarding Safety and Risk issues with a definite improvement on their Return on Investment (ROI).

Should you require any additional information, guidance or training to improve the above fleet management cost contributor’s contact:

Johan van Niekerk

CEO and Mobility Solutions Consultant


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