Three ways to reduce operating costs

Gino Fontana Headshot
Updated Jan 14, 2021

Everyone is looking for ways to reduce operating costs while still maintaining efficiencies. There are a number of areas where fleets can reduce costs, including how they spec equipment, how they operate that equipment and manage damage to cargo and equipment.

Balancing performance and fuel economy

When a fleet is putting together its equipment specs, it needs to strive to find the optimal balance between performance and fuel economy. Fuel is one of the biggest costs a fleet faces, so it is understandable that there is a tendency to focus on maximizing fuel economy over everything else. However, if the focus is solely on miles per gallon, there may be operational issues, like the vehicle not having enough power to climb hills.

Let’s use speed limiters as an example. Fleets can set both pedal speed and cruise speed. If the driver is using cruise control, which is always going to bolster fuel economy, the speed might be set at 64 mph. At the same time, the speed at the pedal might only be 62 mph. These settings provide ample power and also can contribute to safety by preventing drivers from operating at excessive speeds.

Today’s trucks, whether equipped with automated manual transmissions or automatic transmissions, allow the fleet to set parameters to achieve maximum fuel economy or maximum performance. What often gets overlooked is that this is not a question of either/or. Rather it is about blending both fuel economy and performance. Fleets have to give drivers enough power to get the job done. Parameters can be set globally for the entire fleet and manual overrides of the settings can be disabled. There is no way even the most skilled driver can compete with what the vehicle’s computer can do in terms of balancing performance and fuel economy.

Low rolling resistance tires are another smart spec’ing decision as they improve fuel economy and lower the fleet’s total cost per mile. If a fleet is trying to reduce operating costs and maximize fuel economy, it should spec aerodynamic packages on both the tractor and the trailer.

Balancing equipment utilization

Every business has an ebb and flow, making balancing equipment utilization an art, and every business has its peaks and valleys that need to be managed. If the fleet equips itself for the peak season, it will end up with assets sitting idle during non-peak periods — equipment the carrier is paying for. Conversely if it equips for the valleys, it will end up having to rent equipment at a premium during the peaks.

To balance asset utilization, fleets need to keep a watchful eye on the amount of time a piece of equipment is not being utilized. The fleet can use either the vehicle’s telematics systems, GPS or on-board computer to track utilization.

If, for example, a fleet operates Mondays nights through Saturday afternoons, the trucks should not be racking up miles on Saturday afternoons, Sundays and Mondays during the day. Basically, the trucks will be sitting idle for two days. If the fleet manager notices after three days that an asset is not accumulating miles, there might not be cause for major concern. However, if after four or five days the truck has not moved, it should be clear the something is wrong and questions should be asked about why an asset is sitting idle.

This is the point where the fleet manager needs to look across its entire network. Perhaps one market has slowed down, but things in another market may be going strong and idled assets can be deployed to help out in the market where business is bustling.

Fleets also should use the data from its devices to track seasonality at all its locations and use that information to allocate assets based on workload at the various locations.

Effective process management for the accountability of damages

Damage is an unavoidable part of trucking. When most fleets think of damage, they focus on their vehicles — specifically accidents in which their vehicles are involved. However, there is also damage to the load being carried and damage to the vehicle that is not from an accident with another vehicle.

If the contents of a truck are damaged, the fleet needs to investigate not only who was loading the truck but whether they were given proper training. Recurrences of similar types of loading damage are an indication that better training is needed to ensure load quality. Don’t assume that the people loading the trucks are knowledgeable about proper loading procedures. Make sure everyone involved in loading a truck — even temporary workers — are shown the proper way to load cargo into a trailer to help mitigate cargo damage and keep the drivers safe by preventing load quality related injuries.

The vehicles themselves also can get damaged and the fleet manager needs to determine why the damage occurred. For example, if trucks keep coming back from a location with the top left corner smashed in, find out why. Go to the places drivers have been making deliveries and assess conditions. If there are tree branches sticking out that the driver cannot avoid, speak to the property owner about removing the branches. If one driver keeps coming in with damage to vehicles, address the problem. Does the person not care or is there an opportunity for some driver coaching?

While it is unlikely a fleet will ever eliminate all damage to loads and vehicles, an effective process of accountability of damage can help keep damage to a minimum.

Focusing attention on these three areas — balance between fuel economy and performance, equipment utilization and managing damage — can lead to cost savings and improve efficiency.

Gino Fontana is Vice President Operations Berkeley Division & Puerto Rico at Transervice Logistics Inc. His operational expertise emphasizes efficiency, cost savings, superior quality, people management skills and process improvement. He has more than 35 years’ experience in the transportation and logistics industry with both operational and sales experience.