Although prices for replacement tires increased 3% per unit per month in calendar-year 2019 compared to CY-2018, the per transaction tire costs were up less than 1% for fleets buying at pre-negotiated national account prices.
Using Performance-Based Incentives to Optimize the Cost-Effectiveness of Fleet Operations
A fleet cost reduction program goes straight to the corporate bottom line. If a company operates at a 10% annual net profit margin, reducing annual fleet expenses by $100,000 is the equivalent of generating $1 million in sales. Although fleet managers manage hundreds of thousands to tens of millions of dollars in corporate assets, only half are incentivized to achieve targeted performance goals. I advocate incentivization should be a universal best practice extended to all fleet managers.