![\"\"](\"https:\/\/fleetbase.co.za\/html\/wp-content\/uploads\/Fleet_of_Trucks_H.jpg\")
<\/a><\/p>\n<\/p>\n
The real and actual Total Cost of Ownership (TCO) and Cents per Kilometre (CPK) costs of vehicles selected, for use in a fleet, have always been under the spotlight.<\/p>\n
Not all fleet owners have access to all the cost contributors that influences an objective decision.<\/p>\n
This is not to say, that there are not fleet owners who have this down to 3 decimal places.\u00a0<\/span><\/p>\n The bigger and more sophisticated fleet operators have historical data end current actual costs and methodologies to determine the TCO and CPK very accurately.<\/p>\n This examples below are to generically show some of the expenses and their contributing percentages to the costs of operating a fleet vehicle.<\/span><\/p>\n The contributing portions of costs may differ as a percentage, when applied in different applications and areas of operation.<\/span><\/p>\n The major contributors to costs are that of Depreciation and Fuel. Maintenance, Tyres, Insurance and a GPS\/Tracking device are lesser contributing factors although they must be managed with equal diligence.<\/span><\/p>\n Hence a 2% additional discount received upfront, may not be the correct decision should the fuel consumption differ by 4%?<\/span><\/p>\n All the contributing factors require evaluation and comparison before a specific brand or model is selected for the fleet.<\/span><\/p>\n Taking cognisance of the above it is imperative, that the fleet owner ensures, that there are company policies, measuring methodologies, safety and risk management processes, driver training and improvement principles in place.<\/span><\/p>\n A Fleet Management Information System (FMIS) can measure all the Fleet Cost contributors. Savings between 4% to 15% or more can be achieved. which will ensure an optimum Return on Investment (ROI).<\/p>\n The <\/span>FMIS<\/strong> consolidates all expenses and information on one platform. Expenses from Finance, Depreciation, Maintenance, Tyres, Fuel, Insurance and GPS\/Tracking collectively influence a vehicles Total Cost of Ownership (TCO) and Cents per Kilometre (CPK).<\/span><\/p>\n <\/span><\/p>\n \u201cFleet Costs cannot be improved, nor Risk Factors mitigated unless the behaviour and actions of the Driver can be changed or influenced\u201d<\/strong><\/p>\n By implementing an FMIS into the fleet operation, all the various reports received from the multiple vendors assisting in the management of a fleet are consolidated in one place.<\/p>\n Fleet Managers or Fleet Owners cannot effectively look at all the various reports received daily, to easily deduct what actions are to be taken.<\/p>\n There is simply too much information available. By making use of a fully integrated FMIS all the actions and influencers of Costs can be managed. It is not possible to manage 300 incidents a day, but 15 exceptions can be managed easily and effectively.<\/p>\n The simple actions of speeding, acceleration, harsh braking and lack of sleep\/driver fatigue \u2013 measured against excessive maintenance, tyre wear, fuel consumption, fines received and accident incidents per driver \u2013 being \u201cFlagged as an Exception\u201d<\/strong>, will drive the correct actions to be taken. These actions and corrections happen daily and not at the end of the month when it is too late.<\/p>\n Linked to the above are the Key Performance Indicators (KPI\u2019s) that are set to measure Personal Performance, areas or Training required, Safety and Risk-mitigating items and overall company improvements to bolster the ROI.<\/p>\n Fleet Management is an applied science, that requires the commitment and support of Top Management. This allows for correct training to be done, the installation of the correct tools and ensures an improved safer and more cost-efficient Fleet Operation.<\/p>\n The cost of a reputable and state of the art FMIS, combining all the measurement areas with Vehicle and Driver information on one platform, will improve fleet expenditure by 4% to 15%.<\/p>\n The average cost of the FMIS varies from R 70 to R 220 ex VAT per vehicle per month, depending on the FMIS management services required. <\/p>\n <\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.16″ custom_padding=”0|0px|0|0px|false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/fleetbase.co.za\/html\/wp-content\/uploads\/Different-Perspective-of-Vehicle-Selection.jpg” title_text=”Different Perspective of Vehicle Selection” url=”https:\/\/fleetbase.co.za\/html\/wp-content\/uploads\/Different-Perspective-of-Vehicle-Selection.jpg” url_new_window=”on” align=”center” align_tablet=”center” align_phone=”” align_last_edited=”on|desktop” _builder_version=”4.16″ hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0|0px|10px|0px|false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]<\/p>\n <\/p>\n Should you require any further information or assistance kindly contact us:<\/span><\/span><\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row 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Fleetbase, we’ll get back to you shortly.” module_id=”et_pb_contact_form_0″ _builder_version=”4.16″ form_field_font=”||||||||” max_width=”80%” module_alignment=”center” global_colors_info=”{}”][et_pb_contact_field field_id=”Name” field_title=”Name” _builder_version=”4.16″ global_colors_info=”{}” button_text_size__hover_enabled=”off” button_one_text_size__hover_enabled=”off” button_two_text_size__hover_enabled=”off” button_text_color__hover_enabled=”off” button_one_text_color__hover_enabled=”off” button_two_text_color__hover_enabled=”off” button_border_width__hover_enabled=”off” button_one_border_width__hover_enabled=”off” button_two_border_width__hover_enabled=”off” button_border_color__hover_enabled=”off” button_one_border_color__hover_enabled=”off” button_two_border_color__hover_enabled=”off” button_border_radius__hover_enabled=”off” button_one_border_radius__hover_enabled=”off” button_two_border_radius__hover_enabled=”off” button_letter_spacing__hover_enabled=”off” 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custom_padding__hover=”|||”][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The real and actual Total Cost of Ownership (TCO) and Cents per Kilometre (CPK) costs of vehicles selected, for use in a fleet, have always been under the spotlight. Not all fleet owners have access to all the cost contributors that influences an objective decision. This is not to say, that there are not […]<\/p>\n","protected":false},"author":3,"featured_media":3169,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"It is a stated truth that:<\/h4>\n
Put this in Perspective<\/h4>\n
This cost of a FMIS is negligible compared to the BIG picture.<\/p>\nTotal Cost of Ownership(TCO) and Cents per Kilometer(CPK) Example<\/h4>\n
Different Perspective of Truck Operating Costs<\/h1>\r\nWritten by: Johan van Niekerk \u2013 CEO of FleetBASE\r\n\r\nThe real and actual Total Cost of Ownership (TCO) costs of vehicles, particular that of Heavy Commercial vehicles have always been under the spotlight. This is not to say, that there are not fleet owners who have this down to 3 decimal places. The bigger and more sophisticated truck operators have historical data end current actual costs and methodologies to determine the TCO very accurately.\r\n\r\nmodule This example is to generically show some of the expenses and their contributing percentages to the costs of operating a Heavy Commercial vehicle, this being a Rigid Body vehicle or a Truck Tractor configuration.\r\n\r\nThe same logic can be linked to either Passenger or Light Commercial vehicles. The contributing portions of costs may differ some as a percentage when applied.\r\n\r\nThe major contributors to costs are that of Depreciation and Fuel. Maintenance, Tyres, Insurance and a GPS\/Tracking device are lesser contributing factors although they have to be managed with equal diligence.\r\n\r\n\r\n
Let\u2019s take the following example:<\/h3>\r\nContract Period: 60 Months Kilometres usage: 900\u00a0000 km (15\u00a0000 km per month)\r\n\r\nInterest Rate: 10%\r\n\r\nRetail Price of Commercial Vehicle R 1\u00a0240\u00a0000\r\n\r\nDiscount 12%\r\n\r\nTotal Cost of Accessories R 380\u00a0000\r\n\r\nNet Present Value funded R 1\u00a0471 200\r\n\r\nBalloon Rental at the end based on Funded Value 35%\r\n\r\nThe value on termination R 514 9200\r\n\r\nCosts per Month: % of COST PM\r\n\r\nFinancial Payment per month R 37\u00a0908 20%\r\n\r\nMaintenance at R 1.10 cpk at 6% inflation\r\n\r\n900\u00a0000 kms x R1.10 = R 990\u00a0000 @ 6% inflation R 19\u00a0140 10%\r\n\r\nTyres at 70\u00a0000 kms usage \u2013 10 tyres\r\n\r\n900\u00a0000 kms\/ 70\u00a0000 kms = 13 sets x 10 = 130 tyres\r\n\r\nCost per tyre averaged \u2013 R 4\u00a0980 at 8% inflation\r\n\r\n130 x R 4\u00a0980 = R 647\u00a0400 at 7% inflation R 12\u00a0820 7%\r\n\r\nFuel \u2013 2.10 kilometres per litre at R 16.48 per Litre\r\n\r\n15\u00a0000 kms \/ 2.10 = 6 818 litres x R 16.48 R 112\u00a0360 60%\r\n\r\nInsurance rate per annum 5.45%\r\n\r\nR 1\u00a0471\u00a0200 at 5.45% = R 80\u00a0180 per year*\r\n\r\n*Weighted over period R 4\u00a0430 2%\r\n\r\nGP\/Tracking device \u2013 \u201cBlack Box\u201d\r\n\r\nCost per month for monitoring actions R 320 1%\r\n\r\nTotal cost per month R 186\u00a0978 100%*\r\n\r\n*To nearest values Cents per Kilometre 1\u00a0247 c\/pk or (R 12.47 p\/km)\r\n\r\nTotal Cost of Ownership (TCO) - as a percentage of Net Funded Value (R 1\u00a0471\u00a0200) over a period.\r\n\r\nFinance R 2\u00a0274\u00a0480 155%\r\n\r\nMaintenance R 1\u00a0148\u00a0400 78%\r\n\r\nTyres R 769\u00a0200 52%\r\n\r\nFuel R 6\u00a0741\u00a0600 458%\r\n\r\nInsurance R 265\u00a0800 18%\r\n\r\nGPS\/Tracking R 19\u00a0200 1%\r\n\r\nTotal over period R 11\u00a0218\u00a0680 762% Cents per Kilometre 1\u00a0247 c\/pk\r\n\r\nTaking cognisance of the above it is imperative, that the fleet owner ensures, that there are company policies, measuring methodologies, safety and risk management processes, driver training and improvement principles in place. It is also imperative to have a very good Fleet Management Information System (FMIS) in place to manage all aspects of influence, which will ensure an optimum Return on Investment (ROI)\r\n\r\nThe well selected and very reputable GPS\/Tracking device fitted to the vehicle is not a fleet management tool. Same adds value to the FMIS that cannot operate and deliver maximum value without the information supplied by the \u201cBlack Box\u201d\r\n\r\nAll influencing actions and costs need to be measured against selected parameters and standards to ensure that the correct costs are spent. Following this is the driver behaviour that influences all of the areas managed for cost improvement in a fleet.\r\n
It is a stated truth that:<\/h3>\r\n\u201cFleet costs cannot be improved nor risk factors mitigated unless the behaviour and actions of the driver can be changed or influenced\u201d\r\n\r\nBy implementing a FMIS into the fleet operation, all the various reports received from the multiple vendors assisting in the management of a fleet are consolidated in one place.\r\n\r\nFleet managers or fleet owners cannot effectively look at all the various reports received and deduct easily as to what actions are to be taken.\r\n\r\nThere is simply too much information available. By making use of a fully integrated FMIS all the actions and influencers on costs can be managed. It is not possible to manage 300 incidents a day, but 15 exceptions can be managed easily and effectively.\r\n\r\nThe simple actions of speeding, acceleration, harsh braking and lack of sleep\/driver fatigue - measured against excessive maintenance, tyre wear, fuel consumption, fines received and accident incidents per driver - being flagged as an \u201cexception\u201d will drive the correct actions to be taken. These actions and corrections happen daily and not at the end of the month when it is too late.\r\n\r\nLinked to the above are the Key Performance Indicators (KPI\u2019s) that are set to measure personal performance, areas or training required, safety and risk mitigating items and overall company improvements to bolster ROI.\r\n\r\nFleet management is an applied science that requires a commitment by Top Management to allow for the correct training to be done and the installation of the correct tools to ensure an improved safer and more cost-efficient fleet operation.\r\n\r\nThe cost of a reputable and state of the art FMIS, combining all of the measurement areas with Vehicle and Driver information on one platform, will improve fleet expenditure by 7% to 15% over a 24 month period. The average cost of the FMIS in use today varies from R 70 ex VAT to R 220 ex VAT per vehicle per month depending on the FMIS management services required. This cost is negligible compared to the BIG picture.\r\n
To put this in perspective:<\/h3>\r\nAt an average of R 145 ex VAT per vehicle, the cost is less than 1% of the TCO of a vehicle!\r\n\r\nWith a possible saving of 7%, at worst case scenario of R 785\u00a0300; -\r\n\r\nThe investment is a \u2013 No Brainer!\r\n\r\nThe implementation and actioning of a FMIS linked to a GPS\/Tracing system is the only way to seriously improve the safety and risk factors as well as improve the ROI for a fleet owner.\r\n\r\nFor more information contact:\r\n\r\nJohan van Niekerk\r\n\r\n083\u00a0264 2666 johan@fleetbase.co.za www.fleetbase.co.za","_et_gb_content_width":"","footnotes":""},"categories":[48],"tags":[],"class_list":["post-3101","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-2"],"_links":{"self":[{"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/posts\/3101","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/comments?post=3101"}],"version-history":[{"count":44,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/posts\/3101\/revisions"}],"predecessor-version":[{"id":3401,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/posts\/3101\/revisions\/3401"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/media\/3169"}],"wp:attachment":[{"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/media?parent=3101"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/categories?post=3101"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fleetbase.co.za\/html\/wp-json\/wp\/v2\/tags?post=3101"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}