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Operating Costs

Institutionalizing Cost-Control Strategies

Senior management exerts intense pressure on fleet managers to control and/or reduce vehicle acquisition and operating expenses. To accomplish this, a fleet managers can pursue three different cost-control strategies — cost savings, cost deferral, or cost avoidance. In order to implement a successful cost-control strategy you need to institutionalize the mechanisms to curb money-wasting behaviors.

Yes Virginia, There is Depreciation

Depreciation is a necessary evil in our industry. Knowing your risks and knowing your OEM partners won’t make depreciation go away but it can make it more manageable.

Cost Control is Constrained Without Driver Buy-in

The fundamental requirements of your business necessitates minimum fleet equipment specifications that, as a result, pre-define the expense parameters from both a fixed and operating cost perspective. If you acquire vehicle assets that best fulfill your fleet application, then any supplemental cost reduction will only be based on incremental refinements The best way to achieve additional cost reduction is by modifying driver behavior.

Tires are a Depreciating Asset: 10 Ways to Slow the Rate of Depreciation

As a wear item, tires are a depreciating asset. Your job, as the fleet manager, is to slow the rate of depreciation. Replacement tires as a cost category are a fleet’s second-largest operating expense, exceeded only by fuel. By maximizing tire tread life, you lower per-mile costs, resulting in fewer premature removals and optimizing the condition of tire casings, allowing for multiple retreads.

Long-Term Impact of Longer Truck Replacement Cycles

The more expensive the asset, the longer it is kept in service; however, the need for short-term cost savings prompts some fleets to even further extend cycling parameters and defer replacements. But, what are the consequences?

Flat Fuel Prices Forecast to Extend Through 2016

Lower prices for gasoline and diesel have been a welcome relief for fleets, in some cases, reducing operating costs by 25-30 percent. While the past three years have been heaven-sent for the fleet industry overall, it has had a dramatic impact on fleets operated by energy companies, which are scrambling to cut costs to offset the decline in oil prices. The unfortunate fact of life is that one person’s fortune is sometimes another’s misfortune.

Operating Costs Flat for Third Consecutive Year

Calendar-year 2015 marks the third consecutive year that fleet operating costs have remained stable compared to the past three years, primarily due to the continuing softness in gasoline and diesel prices. Replacement tires, the second highest operating cost, were stable due to the ongoing softness in commodity prices, primarily rubber and oil, while increased maintenance intervals contributed to lower maintenance costs for fleets. The forecast is more of the same for CY-2016.

Utilimarc Releases Prius Operating Cost Averages

Utilimarc's report about the Toyota Prius shows that operating and fuel costs for the hybrid car are much lower than gasoline compact cars, but the Prius is making up a smaller portion of the compact car class in fleets each year.

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