What is your fleet’s cost per mile and how can you optimize it?
Cost per mile: Why does it matter?
Many fleets only think about their cost per mile at the most basic level – what they spend on fuel and what they spend on labor.
All the other costs, such as insurance, maintenance, and tires, are considered separately. But when you remove these costs from mileage, you bury the relationship between the number of miles driven and what those miles cost.
By understanding your fleets cost per mile, you can get a high-level view of operational inefficiencies, and find solutions to optimize every mile traveled.
What’s behind a fleet’s cost per mile?
It’s surprising to learn that for most fleets, driving a single mile costs them around $3. In 2021, the average fleet’s cost per mile was $2.90/mile. This figure is an underestimation, as the price of diesel has increased significantly since 2021.
Cost per mile can be divided into two major categories: vehicle-based and driver-based. The vehicle-based cost per mile is easily the greatest area of potential savings for fleets in 2022.
Equipment/maintenance cost per mile
When you average it out, the average fleet is spending 57 cents per mile on equipment/maintenance. That’s more than the cost per mile on fuel! Equipment/maintenance is the largest portion of a fleet’s vehicle-based cost per mile.
Solution: Predictive maintenance
Your fleet has a lot of vehicles. And your vehicle has a lot of parts. A ‘wait and see’ maintenance plan is no plan at all. Your fleet ends up maximizing its maintenance cost per mile. You know how it goes. Bad brake pads will cause bad rotors. Bad spark plugs can cause a bad engine. Small problems turn into big ones.
If maintenance is essential, shouldn’t your fleet have a solid maintenance plan? But who is going to monitor all the components in all the trucks and do so at all times? This isn’t a job for your back office – it’s the job of predictive maintenance. FleetUp’s predictive maintenance pulls together all your vehicles, all their components, and all the miles they’ve driven.
The result? A maintenance system that will help you plan ahead, reduce costs, and avoid nasty surprises.
Solution: Real-time engine diagnostics
Vehicle problems often slip through the cracks. A driver can miss a check engine line or fail to report it to management. Fleets need a fail-proof system when it comes to engine diagnostics, so small problems don’t turn into big problems. Big problems turn into increased costs, unexpected downtime, and lost money. Just one truck out of operation costs the average fleet over $600/day.
With FleetUp’s real-time engine diagnostics, your team will know the minute that check engine light comes on. And your team can quickly schedule maintenance for it – all on the same platform.
Fuel cost per mile
Solution: Fuel waste analysis
With diesel above $4, fuel waste is a fleet killer. It can easily be an area that cuts your profit percentages by double digits.
Harsh braking, rapid acceleration, and idling are the most common sources of fuel waste.
And stats show that on average, 20% of drivers contribute to 80% of fuel waste. Without the proper technology, you’ll probably never find out who your fuel wasting drivers are. But with FleetUp’s fuel management software, you’ll always be in the know. We have saved fleets 10% and more on their fuel costs.
Insurance cost per mile
Solution: Data, data, and data
Commercial insurance rates are projected to increase anywhere from 10-25% in 2022. This is partly due to inflation, and partly due to the increased rate of nuclear verdicts (judgements over $10 million) affecting commercial fleets.
If fleets want to negotiate lower insurance premiums, they’ll want the data.
- AI dashcams – cameras that detect safety incidents, alert drivers, and record the road and the cabin
- Asset tracking – geospatial data locating all of your fleets assets at all times
- Driver safety scorecards – quantifiable data on your fleets driving behavior (harsh braking, rapid acceleration, distracted driving, and more)
When insurance companies get these insights, their risk is lowered. Lower risk for them means lower premiums for you. But only if your fleet has the data.
Reducing your cost per mile: Maintenance, fuel, insurance
Fleets are under the greatest cost crunch in generations. In this environment, fleets need to look under the hood at their cost per mile. Most fleets will find their greatest savings are possible in the areas of maintenance, fuel, and insurance.
What if these savings could be unlocked on one platform? The same platform that manages all your assets, maintenance, and employees?
That’s why we created FleetUp. Our all-in-one platform is built to manage it all – from the road, to the drivers, to the vehicles that make your fleet run.