5 min read

Mitigating rising fleet costs during the cost-of-living crisis

With unprecedented levels of inflation, fluctuating fuel prices and continually rising vehicle costs, many fleet operators are feeling the financial squeeze. In light of these ongoing cost pressures, some fleet operators may be concerned about the cost of decarbonisation projects.

In this blog, James Fields-Davis, Head of Fleet Development at VWFS Fleet, explains how fleet operators can use data and strategic management to curb soaring costs without compromising long-term sustainability and fleet development strategies.

Long-term impact of short-term savings

    It’s abundantly clear that fleet operators need to mitigate the impact of rising costs to enable operations to continue. However, these cost-cutting measures need to be underpinned by a clear and robust cost-reduction strategy to ensure they don’t impact long-term business growth. For UK fleet operators, the most common short-term cost-cutting measures include:
    1. Extending vehicle replacement cycles (72%)

    2. Anticipating staff layoffs (61%)

    3. Fleet downsizing (32%).

    However, each of these responses will have an effect on fleet performance and growth in the long-term.

    The easiest way to inform this strategy is to have a clear data picture of what’s happening in your fleet and where the opportunities, or ‘threats’ are; this can be difficult to establish, especially with larger fleets. We’re making it easier for fleets to have a full data picture with our fleet management portal.

    There are various areas that need to be considered as part of this, including fleet composition, vehicle servicing and maintenance, fuel and charging management and fleet and driver risk management.

    Top considerations for fleet operators when looking to mitigate and manage costs.

    1. Fleet composition – managing the transition to electric vehicles

    Although the government has delayed the ban on the sale of new petrol and diesel cars and vans until 2035, the Zero Emissions Vehicle (ZEV) mandate – which stipulates that 80% of new cars and 70% of new vans manufactured in the UK should be net zero by 2030 – is still very much on track.

    As a result, delaying fleet decarbonisation isn’t an option – and the transition to an EV fleet can actually unlock fleet cost savings in the longer-term.

    Although EVs can have noticeably higher purchase prices, resulting in higher finance costs, they typically have much lower running costs, and often, fleets can operate them for longer. As a result, the whole life cost for EVs in fleets is typically considerably lower.

    When considering including EVs on their fleet, operators need to consider individual vehicle and driver operating profiles to ensure they’re prioritising the right vehicles for electrification; that is, those that can maintain operational functionality, will benefit drivers and the business most and subsequently see the highest cost and emission savings from making the switch.

    Our fleet management portal can show fuel economy, fleet productivity and more. It gives you a 360-degree view of your fleet so you can monitor which vehicles are a priority and prime to switch to an electric powertrain.

    2. Vehicle servicing and maintenance – controlling downtime

    Another consideration is where you can limit downtime for vehicle servicing and maintenance, by proactively streamlining downtime events.

    For example, when undertaking unplanned repair works, consider any upcoming planned services, MOTs or other scheduled routine maintenance that could be completed at the same time. This not only limits the impact on fleet productivity and utilisation, but can also help to reduce overall servicing and maintenance costs.

    VWFS Fleet’s fleet management portal can help keep track of all essential vehicle servicing and maintenance, so you can manage vehicle downtime effectively.

    It gives you visibility of all maintenance and service schedules, bookings and MOT expiry dates, so you can be proactive and plan ahead of downtime. Vehicle data from other leasing companies or an organisations owned vehicle assets can also be imported and viewed to give a full and comprehensive overview of the entire fleet.

    3. Fuel and charging management – maximising efficiency

    Fuel costs are a large portion of fleet operating budgets.Revisiting fuel management strategies to identify and tackle any areas where fuel is being wasted can help to significantly reduce overall fleet costs.

    Fleet operators can use vehicle telematics to identify uneconomic driving behaviours, such as idling, harsh acceleration, harsh braking or excessive speeds, which all contribute to greater fuel consumption. Reducing these behaviours, and educating drivers on the importance of reducing fuel waste, can help to improve fuel efficiency, reduce fuel expenditure and lower associated costs for fleets.

    VWFS Fleet’s vehicle management software helps operators to keep on top of all fleet and driver data in one place, in real time. It’s designed to integrate with telematics solutions to give a wealth of driver data at the touch of a button. This means fleet operators can easily identify any drivers who may not be driving safely or efficiently and implement targeted training and education to address this. This will also help to reduce the associated costs and environmental impacts.

    When it comes to EVs, revisiting charging strategies may also be important. For example, minimising reliance on higher rates from public charging networks, by installing workplace chargepoints or supporting drivers with installing home chargepoints where possible can help to reduce charging costs across fleets.

    Where this isn’t possible, fleet operators can also support drivers with enhanced journey planning to limit the necessity of high-cost, rapid charging mid-journey. VWFS Fleet’s Essential EV Journey Planning Guide and EV Charging Guide can help with this.

    We’re in a period of unprecedented rising costs for fleets, and it unfortunately doesn’t look set to ease in the near future.

    It can be all too easy to find quick ways to cut costs, but the impact on long-term fleet growth, efficiency and productivity can be significant.

    Instead, we’re helping fleet operators make informed decisions to support strategic change that will give them both short and long-term savings, as well as improved fleet operations and efficiency. Having easy access to a comprehensive range of data, in real-time, provides fleet operators with actionable insights, which is invaluable in today’s environment.

    To manage all your fleet and driver data in one, easy to use place, learn more about our fleet management portal here.

    If you have a specific question or would simply like to discuss your fleet requirements, please contact us.

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