Hijacked by costs, saved by technology

Today the bottom line is top of mind. The cost of running a fleet has grown exponentially with crime, fuel costs, vehicle maintenance and tolls adding far too many zeroes onto the bills. According to the Road Freight Association, truck hijackings saw a 10% increase on 2013 with a total of 1,200 hijackings at an estimated cost of R12billion. The price of fuel and tolls are equally excessive. At a recent fleet management roundtable, the head of Standard Bank Fleet Management, David Molapo, stated that some companies operating fleets in Gauteng saw toll bills increase by 30% in 2014 and that the average fuel cost per transaction for Standard Bank fleet customers increased from R515 in January 2010 to R890 in April 2014.

These price challenges have the potential to cripple a business over the long term. The statistics around fuel and tolls and crime are disturbing enough, but vehicle maintenance is adding even more weight to monthly costs. Statistics have shown that the average maintenance bill stands at around R3, 600, an increase of 26% on the prices in 2010. Also, let’s not forget the carbon tax legislation due to go live in 2016 that will see an additional R120 per tonne of carbon dioxide emissions on 40% of direct emissions and can potentially cost the business significant quantities of cash annually in taxes.

However, planning and foresight and precise management are key, as is a rich technology investment that is capable of understanding the nous of the business and streamlining efficiencies. On the fuel frontier, driver training and technology are two steps in the right direction. Drivers can be taught to minimise fuel usage, avoid excessive idling and manage their consumption for instant results.

“We have seen our clients’ driver incidents reduced by 36% and vehicle efficiency improved by 35%, with less maintenance as the vehicle is being driven better”, says Michael van Wyngaardt, Executive for Tracker Business.

Technology and planning can ensure that routes are mapped out in advance, delays prepared for and fraud controlled. There are a number of solutions that mitigate fuel purchasing fraud and toll fraud, monitor shipment status and location and watch driver behaviour. These can be implemented at a cost in the short term, but have long-term benefits in security, improved fuel consumption and reduced risk of fraud.

According to van Wyngaardt the return on investment in most cases ranges between 4-8 months and fleet owners can no longer ignore the fact that drivers and driver behaviour need to be controlled if they are going to manage their fleet costs effectively.

Technology solutions can also assist organisations in managing their drivers and thereby minimising accidents caused by negligence or tiredness.

Tailored telematics and products offer robust solutions to the unique challenges faced by each business.  Many of these can be controlled from a remote operations area or a mobile device, making them significantly easier to manage and allow for swift responses to emergency situations. It is, however, vital that any solution be first assessed and installed in accordance with the long-term strategic goals of the organisation to ensure that they are capable of scaling up or down with the fleet and controlling new parameters as the business changes and grows.