As the U.S. economy continues its slow-motion rebound, fleets, more than ever, are expected to do more with less. While this is a challenge after three years of shrinking budgets, fleet managers — across the board — have shown themselves to be resilient and creative in finding ways to save money and manage a company's fleet.
Ways they have maximized fleet bottom lines include instituting wide-ranging sustainability initiatives, rightsizing, engaging a fleet management company (FMC), and adjusting vehicle lifecycles.
Saving Green by Going Green
Many fleets are seeing green — as in dollars — by adopting sustainable processes in their operations. Most are aimed at reducing the fleet's carbon footprint, with the added benefit of reducing spend, particularly on fuel.
Ohio-based Park Ellis ServiceMaster has reduced its fuel cost by 10 percent using a fleet tracking solution. In addition to reducing fuel costs, the solution has also helped the cleaning and disaster restoration services provider cut maintenance costs while improving customer service.
Likewise, Sears Holdings Company has turned to telematics solutions to save money and cut its emissions. The company realized a 10-percent gasoline savings by controlling acceleration of its vans with a system it installed on 4,000 units. It has also implemented a strict no-idling policy for vehicles at its distribution facilities.
Elevator giant Schindler plans to go to the top of the sustainability list by cutting its fleet's carbon footprint by 30 percent by 2013. Among the ways it has implemented this is by modifying driver behavior. The driver behavior program has netted up to a 30-percent increase in fuel efficiency alone.
Safelite AutoGlass has made its anti-idling policy the forefront of its sustainability efforts. The "Turn it off, idling gets you nowhere" campaign includes "green" signage and goals, as well as enhanced mileage, exception reporting, and field training to support its overall reduction goals.The program saw an estimated reduction of 9,000 metric tons of CO2 emissions in 2011.
EMD Millipore is investing in hybrid vehicles to make its fleet more sustainable. The Mass.-based life sciences tools and technology provider implemented a 33-percent hybrid fleet into its North American operations, and plans to save 140,000 gallons of gasoline while also significantly cutting CO2 emissions. The fleet has also moved to four-cylinder vehicles with better fuel efficiency and other types of fuel-efficient vehicles to further meet its goal of helping the company cut its greenhouse gas emissions by 20 percent.
Best Buy has made sustainability a priority. Working with its fleet management company, the electronics retail giant has realized a 19-percent decrease in cost per vehicle per month and a 22-million-lb. reduction in total carbon emissions since 2009.
As with other fleets, Best Buy has been able to decrease its carbon footprint and save money by picking the best vehicle for the job, choosing more fuel-efficient vehicles, and retiring those that no longer fit company needs.
The Best Vehicle for the Job
Best Buy is also in the process of replacing 636 full-size cargo vans with smaller vehicles, such as the Ford Transit Connect. It has replaced 772 V-8 engine cargo vans with smaller six-cylinder vehicles that produce better fuel economy.
Likewise, ThyssenKrupp Elevator has transitioned to the four-cylinder Ford Transit Connect, increasing its fuel economy by 8 mpg. The company has also introduced propane autogas pickup trucks into its fleet, for lower fuel costs and an unexpected time savings, since these vehicles are eligible for high occupancy vehicle (HOV) lane access reducing fleet drivers' time on the road.
Fuel producer Valero saw the immediate economic benefits of rightsizing when it transitioned its car fleet from the V-6 Ford Taurus to the four-cylinder Ford Fusion. The result has been a 6.5-cents-per-mile savings for each vehicle - a lifetime savings over 47 months of almost $575,000.
Leaning on FMCs
Ongoing pressure to cut costs has prompted some fleets to rely more heavily on services from fleet management company (FMC) partners.
Pharmaceutical company Pfizer said it is increasing its reliance on FMCs as the ability to perform the basic functions (e.g., good customer service and acquiring market-competitive vehicles) while also striving to improve operations and cut costs has become more challenging.
Best Buy has worked with its FMC to manage fleet and DOT operations. In addition to the 19-percent decrease in cost per vehicle per month and a 15-percent reduction in total carbon emissions since 2009, the company has also worked closely with its FMC on major projects that include quantifying the optimal lifecycle and protocols for vehicle branding, participation in annual vehicle reviews and analytics to understand the appropriate vehicle for each job function, establishment of a vehicle retirement policy and retirement planning, and management of major ancillary Best Buy fleets.
FMCs have also been working with fleets to develop mobile applications as a way to help lower fleet costs, increase driver efficiency, and improve fleet management control.
Best Buy, for example, uses its FMC's telematics application to monitor and report to field teams how well it is managing vehicle expenses.
Keeping vehicles in service longer is another approach fleets have been taking to reduce costs. While not a one-size-fits-all solution, it has been effective for several fleets.
American Family Mutual Insurance Co. stretched out its existing models an extra six months and 15,000 miles, going from a replacement cycle of 36 months/60,000 miles to 42 months/75,000 miles.
PPG Industries has been gradually extending its vehicles 10,000 miles each year (from its original 65,000-mile cycle), and currently has a standard 95,000-mile replacement schedule. The fleet has experienced significant cost savings, with only minimal maintenance cost increases.
Advance Auto Parts has also been able to go an extra year keeping the same vehicles and without growing its fleet unnecessarily. To avoid spending money on purchasing more units, it has successfully managed to shift several hundred underutilized vehicles across its U.S. operations to fill in where needed.
In addition to stretching the service lives of vehicles, more fleets have also adopted longer oil change intervals, by using, for example, synthetic products to help save costs on oil changes. Keeping up with service intervals that match vehicle usage is another way fleets have explored to minimize oil drain charges.
The Bottom Line
These are only a few examples of how savvy, cost-conscious fleet managers are conducting fleet business in today's "new normal" of tight budgets and ever-shrinking resources.
What these fleets show is that, instead of being a detriment, necessity has become the "mother of invention," pushing fleets to operate at peak performance for the benefit of drivers, the company, and customers. FF