4 Ways Technology Can Reduce Your Cost-per-Mile
Ben Franklin would have to admit that in the world of transportation, a penny saved is far more than a penny earned.
June 2013, TruckingInfo.com - WebXclusive
On-board computing systems can help cut cost per mile through helping improve fuel mileage, reducing out of route miles and more.
Ben Franklin would have to admit that in the world of transportation, a penny saved is far more than a penny earned. Fleet managers understand that reducing cost-per-mile (CPM) by a single penny means huge savings, considering the number of miles a fleet drives each year. Therefore, reducing CPM is crucial for improving the bottom line and margins.
You can’t manage what you can’t measure – a fact makes onboard computing and other technologies undeniably relevant to reducing CPM. Technology is critical for not only gathering and assessing pertinent data, but also tracking progress and highlighting issues that impede progress.
In each of the following four areas, technology continues to deliver exceptional return on investment.
1. Reduce fuel consumption
Fuel consumption and the volatility of fuel prices will always plague fleet managers as one of the largest contributors to CPM. Therefore, improving miles-per-gallon will yield outstanding results in lowering CPM. One of the quickest ways to succeed is to monitor driver performance and provide tools that enable drivers to contribute to this effort.
EOBR-generated data in the form of weekly engine reports track each driver’s speed, long idle and shifting habits. The information identifies drivers who may be burning excessive fuel, and can also help pinpoint vehicles that may be underperforming.
Most drivers want to perform like professionals. When fuel performance data is translated into a scorecard, it becomes a coaching tool. It raises driver awareness of a driving habit that needs changing, an important first step in the improvement process.
Motivating and incentivizing drivers to maintain improvement takes an mpg program to the next level. Creating competition among drivers by posting (in the driver break room where they will surely draw a crowd) weekly scorecard rankings is an approach that has helped many fleets keep their driving habits top of mind. No one with a strong sense of pride wants to be last, let alone near the bottom.
Make mpg a team effort by sharing fuel savings in the form of a reward for the top 10% of performers. Adding a monthly or quarterly incentive further stokes their competitive spirit.
On the flip side, focus coaching efforts on drivers in the bottom 10%.
More about scorecards: In addition to a fuel program, they are valuable for reducing vehicle maintenance and insurance costs, and improving safety (more about that later). Be sure to monitor driver performance by driver name, not truck number, to avoid data glitches due to slip-seating and other factors. You can coach a driver, not a truck.
2. Reduce out-of-route miles
Out-of-route miles burn unnecessary fuel, cause unnecessary wear and tear on vehicles, diminish driver productivity, and erode customer service—all of which wreak havoc with CPM. Reduce out-of-route miles and your CPM will drop.
Create a report that compares actual miles driven with published miles for each trip. Establish a variance tolerance (a percent rather than number of miles). Flag drivers who exceed the threshold and include this performance metric on the driver scorecard. Since this behavior is coachable, it is important to learn the cause of each flagged incident, take corrective measures and track progress.
Adopt a navigation application for dispatch communication and routing to calculate the most efficient routes based on vehicle profile and routing parameters such as truck-restricted and prohibited roads and load type, including hazardous materials. Integration with routing software eliminates driver entry of erroneous addresses that may cause liability and safety issues as well as out-of-route miles.
Drivers may be directed to the correct entrance and delivery spot, so they know exactly where to enter the delivery area, where to park and where to exit. Since most accidents occur in parking areas, this is a valuable safety benefit as well. In addition, when spoken turn-by-turn directions are provided, a navigation application eliminates the number one cause of accidents – visual distraction.
Another navigation application feature optimizes fuel purchase by searching for fuel stations within a given radius along a designated route. Stations can be dynamically sorted by pump price or within a fleet’s specific network of pre-approved stations.
A Winnipeg, Canada-based carrier integrated a navigation application with its routing software for greater compliance with pre-planned routes. Routes from the back-office synchronize in real-time to deliver guidance to the vehicle. In fostering better compliance with routing, the integration supports reality-based pricing and billing and payroll. Customers are billed for miles driven, and drivers are paid for miles driven and hours worked.
Next Page: Develop a comprehensive safety program