Rising costs can be worrying for fleet operators – but it is important to understand that they can be effectively managed.
For fleets, 2017 looks set to be a year of rising costs. Fuel prices have already increased at the pumps over the last year, and are expected to continue following an upwards trend, tracking oil prices. Also, thanks to the weakening pound, anything imported – including parts, tyres and vehicles themselves – will likely face upwards cost pressures.
The impact of this is already being seen with reports of an 8% increase in vehicle lease rates in the final two months of last year. Clearly, this is quite a substantial rise in a very short period of time.
We also continue to see increased focus on vehicle emissions, especially in cities – and this too, may have an impact on fleets. Recently, for example, British drivers heading to several French cities were advised by the RAC to ensure they have correct ‘clean air’ stickers from 31 March – or risk incurring fines of up to £117.
What should fleets do? Well, awareness of potential fine hotspots and penalties – and effective management of them where they occur – is always important.
When it comes to rising prices, in most cases these are unavoidable (although it is always a valuable exercise to ensure that what you are paying for any item of fleet expense is competitive): Instead it is a question of going back to basics and ensuring that you have the fundamentals of fleet management in place – that the right vehicles are used in the best way to deliver on your business objectives at the lowest cost while meeting safety and environmental considerations.
We are already working with a number of fleets who are using our software to ensure they are doing everything possible to minimise the impact of price rises. Essentially, their strategies involve ensuring that they are recording the best possible data, formatting the information gathered into reports that enable effective strategies to be created, and then putting safeguards in place to ensure that these dictums are followed.
This approach can be followed in just about any area of fleet activity and will help you ensure that your assets are as productive as possible. It can sometimes be difficult and demanding work – although fleet software makes it immeasurably easier – but it is always productive. In fact, in the work we are currently undertaking, we have even seen some fleets reduce their expenditures in some areas, despite rising costs.
The lesson, we believe, is that rising costs are undoubtedly worrying and even distressing for fleet operators but it is important to understand that they can be effectively managed.