Truck Fleets can Be Expensive – Here’s How to Cut Costs
Managing a fleet of commercial semi-trucks is expensive, especially the repairs. Even when you can get a good deal on parts, like importing new truck parts from Canada, you still have to pay for the actual repairs from a licensed mechanic. You never want to trust backyard mechanics with your trucks.
In addition to having a large budget for repairs, you also need to constantly manage and optimize your cost-per-mile and other expected, yet unavoidable expenses. Running a trucking company isn’t cheap, but it can be profitable if you know how to cut your costs.
If you need ideas, here’s what you can do.
1. Zero in on your “cost per mile”
Cost per mile is the calculation that tells you how much it costs to operate your business per mile driven. This is the most accurate way to measure the cost of running your business and it’s the only accurate way to set your per-mile rates for clients with an adequate profit margin.
You need to know your cost per mile, and you need to actively work to reduce it as much as possible. The less you can spend, the better.
The average cost per mile in the industry is between $1.16 and $3.05 per mile, although neither of these are realistically sustainable. These are just average numbers calculated based on all of the data. Your cost will vary. However, the following cost ranges are pretty typical:
· Driver pay: $0.48 - $0.83 per mile
· Fuel: $0.40 - $0.55 per mile
· Maintenance: $0.09 - $0.40 per mile
· Insurance: $0.06 - $0.18 per mile
· Fixed overhead: $0.06 - $0.30 per mile
There are definitely more expenses you can expect, but this should give you an idea of a typical cost range. Equipment and maintenance tend to take up around 20% of your total operating expenses, driver wages are around 40%, and fuel comes in at around 12%. If your expenses don’t fall within these ranges, look for ways to lower your cost per mile without reducing driver pay.
2. Track your warranties
When you buy a new or used truck or have work done, you’ll often get a warranty. However, it’s on you to pursue a claim if you end up needing work done that is covered by that warranty. If you pay for covered work out of pocket, you’re just wasting cash.
When you own a fleet of vehicles, it’s hard to manage your warranties manually. You’re going to miss many opportunities over time and that’s going to cost you a ton of money. On the other hand, when you use fleet maintenance management software, you can track all of your warrantable opportunities in the system. Each time one of your trucks needs work, the system will tell you if that particular need is under warranty.
Too many warrantable opportunities go unclaimed, and over time, they add up to large amounts of money. Truck repairs are expensive, so missing one opportunity can cost you thousands of dollars. By tracking your warranties, in ten years, you could save tens of thousands of dollars.
3. Focus on preventive maintenance
Preventive maintenance is critical for reducing expenses because it helps you avoid foreseeable expenses. For example, making sure drivers pay attention to tire pressure sensors to keep tires properly inflated will reduce fuel consumption.
Regularly inspecting cooling systems, electrical systems, air filters, hoses, and belts are also important maintenance tasks that can catch problems before they do damage. Drivers should also be checking fluid levels to make sure their truck runs smoothly.
Hopefully, your fleet is outfitted with sensors on more than just your tires so you can be alerted when something needs attention. Electronic sensors can detect subtle changes that human beings can’t see, and they can play a major role in preventing expensive repairs.
4. Use automated routing
Automated routing is one of the easiest ways to save money on labor, gas, and more. Automated routing will calculate the fastest route to your destination.
Your drivers will also get real-time updates on traffic conditions, including accidents and the weather. It will give your drivers the opportunity to re-route before they get caught up in something they can’t get out of easily.
To save on costs, spend less money
It sounds simple, but it’s true. To save money you need to spend less money. Of course, you can’t avoid some of your regular expenses to run your business, but you can certainly find ways to optimize those costs.
So, focus on optimizing your costs wherever possible, and even if your savings are small, it will add up over time.