Motoring News

Reducing fleet expenses: There are no shortcuts

FINE FLEET: Corporate expenses, however, can soar into millions if road or other incidents become frequent. Training, training, training, is the answer. Image: Supplied
JOHANNESBURG, South Africa – Economists predict the SA economy will take more than a year to recover from the financial challenges created by Covid-19. Many businesses have had to make difficult decisions when it comes to cutting costs.

Fleet managers, in particular, need to assess every part of their fleet to determine where costs can be cut.

Eugene Herbert, managing director of MasterDrive, says training can reduce fleet costs in three of the top 10 most expensive categories of expenses: driver downtime, vehicle downtime, and the expense and difficulty of obtaining new parts.

BECOME A LOW-RISK COMPANY

“An effective safety management program is of utmost importance to a well-run fleet. When training is part of this it will result in a number of benefits and reductions in expenses.

“Training will reduce the cost associated with accidents and consequently injuries. Cost of insurance can be reduced as you will become a low-risk company and some insurance providers offer a reduction in fees if you send your drivers for training.

”Trained drivers will complete their job more effectively and so have better productivity. Lastly, by investing in your employees you improve retention as you show drivers that you care about their well-being and growth.”

CALCULATING THE COST OF CRASHES

If this does not convince you, there is a simple method to determine the cost

“To get a quick idea of just how much crashes cost, work out the expense of all your crashes in one year and multiply it by your percentage profit margin. The final figure would then be how much extra revenue you need to make in sales in order to cover the costs of the crashes.

READ MORE MasterDrive features

“If your crashes cost you a modest R100 000 a year and you have a profit margin of 10%, you need to generate an additional R1-million sales revenue to cover the cost. This is a very conservative example: numerous truck crashes, for example, can soar into the millions.

”The loss of cargo, driver injuries, vehicle damage, clean-up costs, and many other expenses means truck crashes can exceed R100 000.”

NURTURE HEALTH-AND-SAFETY

Herbert says training is the best way to reduce crash frequency: “Correct training can correct driving behaviour that puts them at risk. It also helps to develop awareness that drivers can use to quickly identify dangerous situations and handle them safely and effectively.

”Reducing the number of crashes depends on a stringent health-and-safety policy; part of this is giving drivers the skill to avoid danger.

“A lot of pressure is on fleet managers to save costs wherever possible when the bottom line is being pulled very tight. Cutting training can cost you much more long-time.

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