Key Operational Metrics Every Fleet Manager Should Track for Better Profitability

Want to make more profit on every mile driven?

Driving profitability doesn’t happen by accident. It’s the direct result of tracking and improving your metrics every day.

Here’s the problem… Most fleets aren’t measuring the right things.

When you run a fleet without clear visibility into metrics like cost per mile and vehicle downtime you’re bleeding money every single day. Not literally…but your bottom line takes serious hits when you fly blind.

The good news?

Measuring operational metrics:

• Doesn’t cost you anything to start
• Can be implemented easily

…and will help you increase profits almost immediately.

The Top Metrics That Affect Your Bottom Line

Managing a profitable fleet operation is a numbers game. It’s not about hunches. Or guesses.

Successful fleets track numbers. Everything from engine repairs to idle time is measured and monitored. Data helps managers run their fleets more efficiently, cut costs and improve profits.

Here’s an example of how tracking the right metrics will save you money:

Let’s say your fleet invests in diesel engine maintenance and keeps fuel systems running smoothly with quality Cummins injector pumps. Vehicles with clean fuel systems get better fuel mileage because the fuel delivery system plays such a big role in a diesel’s performance. When diesel engines fall behind on fuel system maintenance they consume more fuel, have more breakdowns…and show a much lower profit on the bottom line.

Metrics that monitor fuel delivery and diesel maintenance aren’t the only numbers you should pay attention to. But they’re a good place to start. Other profits driving metrics include maintenance costs, driver behavior and vehicle utilization.

Fuel Efficiency Metrics Every Fleet Should Track

Fuel costs are by far the single largest variable expense in any fleet operation.

Fuel still accounts for up to 35% of fleet operating costs.

That means one third of your fleet’s revenue is going straight into the gas tank every month.

If you pay anywhere close to the national average for fuel (hint: you do) improving your fuel efficiency will have a HUGE impact on your bottom line.

Here’s a quick example:

Say your fleet spends $500k per year on fuel.

If you can improve your fuel efficiency by just 10%, you would save $50k per year. That’s HALF A MILLION dollars every TWO YEARS just by shaving a little bit of fuel consumption.

See what tracking the right metrics can do?

Below are three fuel metrics to start tracking right away:

• Cost per mile – This is hands down the single best fuel metric to track. Checking fuel cost per mile on a weekly basis allows you to spot trends before they turn into big problems.
• Miles per gallon – Monitor mpg on each vehicle individually. Some trucks will ALWAYS have worse fuel consumption than others. The trick is to pinpoint why and fix it.
• Idle time – Nothing burns through fuel faster than idle time. Reducing idle times will lower your fuel bill faster than anything else.

Takeaway: Start keeping records on your fleet’s fuel efficiency and you’ll quickly find places to trim costs. It’s as simple as that.

Maintenance Metrics to Reduce Repair Costs

For most fleets maintenance costs creep up slowly until something breaks.

Then everyone wants to talk about maintenance. Problem is, reactive maintenance is always more expensive than preventive maintenance. Fact.

According to recent fleet management statistics, implementing a predictive maintenance strategy can reduce vehicle breakdowns by up to 30%.

Less breakdowns means fewer emergency repairs. Fewer repairs means more time on the road AND less money going to the repair shop.

The three maintenance metrics every fleet manager should track:

• Cost per vehicle per month – Every truck in your fleet should pull its weight. If maintenance costs on one vehicle start to skyrocket, it may be time to cut your losses and move that truck to the sales lot.
• Mean time between failures – This metric gives fleet managers insight into how reliable their vehicles are. The lower this number, the more often your vehicles are breaking down (and costing you money).
• Scheduled vs unscheduled maintenance – Ideally you want all of your maintenance to be scheduled. There will always be unforeseen repairs that come up but by increasing the amount of scheduled maintenance you can head off future repairs before they happen.

It should go without saying that preventative maintenance is cheaper than fixing a problem after it happens.

Diesel engines require regular fuel filter changes and clean injectors to run their best. Dirty fuel filters cause fuel consumption to increase and eventually lead to engine failure.

Got all that?

Here’s a quick recap:

1. Maintenance costs should be monitored carefully and ideally DECREASE over time.
2. Predictive maintenance drastically cuts breakdowns.
3. Regular diesel maintenance reduces fuel consumption.

Driver Performance Metrics that Reduce Costs

Here’s a little known secret…

Your drivers have a huge impact on your bottom line. How they drive affects fuel costs, maintenance costs and accident rates.

Monitoring driver performance is a great way to ensure your drivers are operating efficiently and costing you less money to insure.

The top driver performance metrics to track:

• Harsh braking and acceleration – Hard braking and rapid acceleration wastes fuel and wears down your brakes and tires.
• Speeding – The faster your drivers drive, the more fuel they will waste. Make sure everyone drives at optimal speeds at all times.
• Hours of service compliance – Following hours of service guidelines doesn’t just reduce accident risk, it also prevents you from paying fines.

Fleet managers who use driver scorecards see continuous improvement. Once drivers know they are being monitored they tend to adopt better habits which = savings all around.

Profitable Savings. What else is there?

Utilisation & Downtime Metrics to Improve

If a truck isn’t moving, it’s not making you any money.

Vehicle utilization is the metric that shows how well your fleet is using its current assets. Companies that purchase trucks left and right without utilizing what they have will struggle to become profitable.

Here are the key metrics to focus on:

• Vehicle utilization rate – You should always strive to have the highest percentage of fleet vehicles operating and making you money.
• Average downtime per vehicle – Downtime is absolutely killing your profits. Find out how often your vehicles are in the shop and WHY they are in the shop.
• Length of repair turnaround – The quicker you can get your trucks fixed and back on the road, the more profit they will generate.

One thing most managers don’t realize is that downtime doesn’t JUST cost your business money on repairs.

When a vehicle is in the shop it’s not generating revenue. So when you calculate the lost revenue your truck could have made while in the shop, downtime can actually cost you 2-3x what you think it does.

With that being said…

Wrapping It Up

Metrics lie at the core of every successful fleet operation.

With good data you can pinpoint problem areas, make operational improvements and catch issues before they cost you money.

Here’s a quick recap of what fleet managers should be tracking:

• Cost per mile / Fuel efficiency
• Vehicle maintenance costs
• Driver scores
• Vehicle downtime & Utilisation

Now go out there and start collecting some data!