Many of the fleet operators are primarily focused on the acquisition cost which is only
25% of total cost of ownership!
Understanding the Fleet Management Iceberg Effect
Understanding the Fleet Costs
25%
25% of total fleet cost and its lifecycle handling is associated with the acquisition cost of the motor asset.
75%
75% of total cost is related to the vehicle operator (driver), fixed and operating expenses.
Fleet
Industry
Facts
LIFECYCLE
The average motor asset is over 10 years old.
The average light vehicle has an estimated economic life of 150,000 - 200,000 km.
As a fleet ages, the cost of operation increases, repair expenses increase, downtime increases, while productivity decreases.
Maintenance
Many vehicle fleet operators do not have scheduled preventative maintenance programs for their fleets.
Typically their fleets consist of a diverse mixture of brands, requiring an extensive inventory of parts to support them.
Record keeping regarding maintenance and repairs is generally poor.
Utilisation
On average, companies have at least 10% assets more on their inventory list than are required to do the job.
Short term rental units are often used to address shortages created by seasonal excessive demand or downtime.
Vehicles and other motor assets are often sourced through multiple vendors, limiting flexibility related to motor assets rotation and reallocation.
Many Organisations Face Following Challenges:
- Aging fleet, unsafe and unreliable vehicles
- Vehicle sourcing – ‘piecemeal’ procurement at the high price with a slow delivery
- No standardisation – motor assets
- No standardisation – procedures and processes
- No financial reporting and depreciation policy
- No fleet management system – software
- No policy on disposal of motor assets
- Maintenance costs higher than the market value of motor assets
- Untrained drivers causing:
- vehicle collisions and roll-overs,
- excessive clutch, tyre, breaks wear and
- early failures of the engine and gearbox.