You’re getting serious about tracking your fleet costs to find ways to become more efficient and profitable.
You’ve worked out your fleet’s total cost of ownership (TCO) calculation. You’re factoring in purchase price, insurance, fuel and driver pay. You’re even including your maintenance costs. You’re all set, right? Maybe not.
Is your fleet’s TCO calculation missing key data? If so, you’re not just overlooking the big picture, you could be missing an opportunity to streamline your operations, increase efficiencies, lower costs and boost profitability.
Keep reading to discover some of the commonly overlooked costs of fleet maintenance your TCO calculation might be missing, and how to keep these costs under control.
Fleet TCO and the True Cost of Maintenance
The costs you are tracking may not be the whole story. For example, are you considering all the ways that breakdowns impact your bottom line? Some of these include:
- The loss of drivers’ hours of service: Even if you’re not paying your drivers for miles during a breakdown, you’re still losing out on time they could be on the road generating revenue. Additionally, when drivers are stranded during a breakdown, you’re on the hook for their travel and expenses.
- Loss of customer confidence: When trucks break down and you miss delivery deadlines, your customers are less likely to work with you again. This isn’t easy to calculate, but it impacts your bottom line.
- The cost of rental and safety stock: When your truck is out of service for a breakdown, you need a replacement. Those costs drain your profits.
Additionally, inefficient fleet maintenance management and a lack of data visibility into things like service history and warranty information add to your true maintenance costs. If you’re letting your operations get bogged down by things like manual data entry, paper record-keeping and communication via phone calls, you’ll drain your profits with a few of these costs:
- Missed warranty opportunities and comebacks: Without automated visibility into warranty information, you could miss that a part is under warranty. That adds costs to your bottom line. Additionally, if you only discover after the fact that an item is under warranty, you might authorize the same repair being made multiple times by multiple providers.
- Increased breakdowns between preventive maintenance: Without a system to alert you when preventive maintenance (PM) is due, you might inadvertently miss some scheduled maintenance. This could lead to more frequent, more costly breakdowns.
- Driver turnover costs: With industry-wide driver turnover rates consistently above 90% and the driver shortage getting progressively worse, you can’t afford to make your drivers unhappy. When your trucks frequently break down, your drivers lose income. When your drivers can’t get in touch with your breakdown specialists because your phone lines are tied up, they become frustrated. Lost income plus frustration is one reason your drivers may move on to another fleet.
Using Service Relationship Management to Lower Your TCO
If your fleet is suffering because hidden TCO costs are draining your profits, implementing a Service Relationship Management (SRM) platform to manage your data and streamline your fleet maintenance management could help you monitor and manage TCO and boost your bottom line.
Some of the ways SRM lowers your TCO include:
- Reduced downtime: To maximize drivers’ Hours of Service, increase revenue-generating hours, and cut your rental and safety stock costs.
- Better warranty recapture: To ensure you’re reimbursed for your parts and repairs under warranty, and to make sure you don’t pay for the same repair twice.
- Improved preventive maintenance: To help avoid breakdowns and fines, and prolong an asset’s life.
- Reduced driver turnover: To lower your recruiting costs and improve driver satisfaction.
Fleet Managers, Share Your Thoughts
Are you currently using a formula to track your TCO? Are you factoring in the hidden costs outlined above? Are you current with your preventive maintenance? Do you capture 100% of your warranties? Please join the conversation by posting a comment below.
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