Reducing Costs 2014
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This document discusses how a large community services provider in South Australia reduced their fleet costs by uniting over 100 services. They have over 125 company-owned vehicles and 800 additional volunteers that use private vehicles, totaling around 3 million kilometers traveled per year. By implementing real-time fleet reporting and switching to more fuel efficient and reliable 4-cylinder vehicles, they were able to reduce annual maintenance costs by 50%, defer $350,000 in capital expenditures, and cut fuel costs and CO2 emissions by 20-36% over three years.
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Reducing Costs 2014
- 1. Reducing Fleet Costs Uniting Communities Lee Sauerwald
- 2. Uniting Communities Large Community Service provider in S.A. Over 100 services including Goodwill and Lifeline 20,000+ South Australians every year 700 staff + 800 volunteers 125 company owned fleet vehicles Company Fleet travels 2 million kms Grey Fleet another 1 million kms
- 11. Real Time 24/7 Web Reporting Co2 Emissions – g/km Kg/pa Fuel performance reporting Maintenance reporting Overdue service reports
- 12. 300000 310000 320000 330000 340000 350000 360000 2007 2008 2009 2010 Kg CO2 Emissionsper annum
- 13. $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2007 2008 2009 2010 Annual Maintenance Costs
- 14. $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 2007 2010 Whole of Life Costs - Former6 cyl to New 4 cyl
- 16. Extended Life More reliable products means: Less down time Less maintenance and repair costs Deferred capital expenditure
- 17. Reduced Costs as well as Emissions Capital Expenditure of $350,000 deferred $42,000 less fuel costs over 3 yr cycle Annual Maintenance Costs reduced by 50% Whole of Life costs reduced by 20% - 36%
- 21. Vehicle Technology – Here and Now! Air Bags Reverse technology Braking technology Safety Driving Day Lights
- 23. Connected Cars “Connected vehicles, co-ordinated vehicles and shared vehicles are a matter of when, not if” “Cars will become lighter, cleaner and smart enough to avoid crashes and traffic jams”
- 24. Driverless Cars are already here … “Top automakers and tech companies aim for self-driving cars in the next five years” “Generations after us look back and say how ridiculous it was the humans were driving cars”
- 30. Driver Safety Education - eLearning
Editor's Notes
- Reducing Fleet Costs Good morning. Firstly, thank you to Jack and the AfMA NSW Chapter for their invitation today. I’ve been asked to speak to you today about Reducing Fleet Costs. I’ll take you through what Uniting Communities have been up to in recent years and where we have reduced our fleet costs with technology as a theme throughout, concluding with safety. And perhaps you might see some opportunities for you too.
- Uniting Communities So a little bit about Uniting Communities … We are a large Community Service provider in South Australia offering over 100 different community services, including Goodwill and Lifeline. We service over 20,000 clients every year with 1,500 staff including volunteers using 125 company vehicles travelling over 2 million kms. We also have hundreds of Grey Fleet vehicles where staff use their own vehicles for work purposes travelling in excess of another 1 million kms.
- Where to Start? Reducing costs … Where to start?! As we know there are as many elements to Fleet Management as there are parts in a car …
- Throwing money away But so we don’t end up throwing good money after bad, we need to look at the whole of life costs of running our fleets. So this means every cost you can think of that is related to operating your fleet!
- Fit for Purpose Firstly, you need to understand what it is your business is trying to achieve, so your purchases are ‘Fit for their intended purpose’
- Arm and a Leg And your fleet should not cost you an arm and leg (or your first born) to operate it!
- Downsizing So how do you do that? Well you can start by down sizing your fleet and purchasing more fuel efficient vehicles. Over time we have been progressively moving towards more fuel efficient vehicles as part of our procurement process. This has seen a notable shift from larger six cylinder products to smaller four cylinder products, as well as a shift to more fuel efficient products within the same cylinder class. The result of this has meant less fuel needed and fewer emissions in operating our fleet. Not only do smaller vehicles reduce fuel costs but these are the vehicles the second hand market demands so they are more likely to hold their residual values upon resale so you don’t get burned on the exit.
- Pooling Vehicles You can also ‘pool’ your fleet of vehicles … well, perhaps not quite like that! All of our cars, even those as part of salary packages (including the Chief Executives) all become pooled cars during normal business hours and all need to be booked out. Even the Chief has to book his own car or someone else will. We find that car pooling helps to reduce the total amount of vehicles needed in the fleet and encourages the sharing of vehicles to limit our carbon footprint.
- GVG The environmental impacts of manufacturer’s vehicles have also been considered as part of our coordinated national tender process and our own local review of products on offer. Green ratings of the vehicles are considered from numerous sources. Using the Federal Governments Green Vehicle Guide website, all vehicles for consideration are compared against one another in terms of both their greenhouse and their air pollution ratings. Our current purchasing policy strives for four to five star green rated vehicles in an effort to reduce our carbon footprint. In addition to this, other third parties such as Australia’s Best Cars are also considered for their environmental ratings of vehicles. Analysis of these ratings has seen us purchasing particular vehicles ahead of others due to some fuels rating better than others, which in turn inform our procurement decisions.
- Hybrid Technology While we haven’t quite introduced any Tesla’s into our fleet just yet, along the way we have experimented with alternative technologies such as Hybrid Petrol/Electric vehicles that are ‘best in class’ five green star rated fuel efficient vehicles. As you can see I’ve put my family in one! Sitting idle in traffic or at traffic lights, the petrol engine is not engaged and only the electric motor is needed – so there are no emissions when the car is still on, while stationery. Real measurable reductions in emissions as well as fuel costs. For every mid-sized Petrol vehicle we convert to Hybrid – Petrol/Electric we save over $1,000 per annum in fuel costs and reduce our CO2 emissions by 1,860 kg per annum – by swapping out just one vehicle.
- Real-time 24/7 Web Reporting We use a specialist third party fleet management organisation for real-time web reporting technology which has enabled in depth and up-to-date analysis of the fuel performance and carbon emissions from our fleet. The litres being used by each and every vehicle per kilometre travelled as well as the amount of CO2 Emissions measured by gram per kilometre. I just run an inventory report in preparation for today and of our 125 vehicles 55 are now hybrids. Work has also been undertaken with the third party to develop overdue service reports to enable regular servicing of vehicles for efficient handling including effective tyre management for improved fuel efficiency.
- Kg Co2 By implementing all of these various strategies quite some time ago we were already seeing a 9% reduction in Co2 emissions from our fleet – 30,000 kg Co2 per year – which is the equivalent of taking 7 cars out of our not so large fleet.
- Maintenance Annual maintenance costs dropped in the same 3 years by $188,000 on a fleet of only 100 vehicles – half the cost of what they used to be.
- WOL Costs While whole of life costs for switching to smaller vehicles also reduced by up to 36% as the residual values of smaller vehicles held their own.
- Fleet Environment Award The reason I showed you some slightly out of date data was because this was when we won AfMA’s Fleet Environment Award back in 2010. And this was when we didn’t have a Hybrid in the fleet! We now have converted almost half of our fleet to Hybrid technology. After minimising our fleet emissions we also choose to offset all remaining emissions. We have been participating in Carbon Offset Programs for over ten years, which sees the local planting of native trees to absorb the greenhouse emissions produced by all of our motor vehicles. This program has seen the establishment of 3 Forests with 19,000 trees and shrubs in locations throughout South Australia, the equivalent of 6 SCG ovals offsetting our vehicle emissions and almost 8,000 tonnes of Carbon Dioxide .
- Extended Life There have been various associated benefits we have enjoyed by actively reducing our fleet’s emissions. One of them is that we are now running a more reliable product in our fleet. This means less down, less repairs and maintenance as well as deferral of capital expenditure.
- Going Green You tend to hear that going green can cost money ... Well, our experience with our fleet has been the opposite ! A welcome benefit of reducing carbon emissions is that we have also reduced our costs As you can see, by running a more reliable product we’ve been able to defer significant capital spend when replacing vehicles, our fuel costs have decreased, our annual maintenance costs have halved and importantly our whole of life costs have also dropped. All saving us dollars
- Safety Now moving particularly onto safety … In this United Nations Decade of Action for Road Safety (2011-2020) we know that road deaths and injuries are still a global problem. 1.2 million people die in road accidents every year. A further 50 million people are injured.
- Australia We know fatality rates have been decreasing in Australia since the 1970s – but there is still room for improvement. 1,300 Australians are killed in road crashes and 32,000 seriously injured every year costing $27 billion dollars.
- ANCAP So what can you do? Well, for starters, you can choose only ANCAP 5 star rated vehicles. The Australasian New Car Assessment Program (ANCAP) is Australasia's leading independent vehicle safety advocate. ANCAP provides consumers with transparent advice on vehicle safety through its safety rating program. ANCAP, has been recognised as a major force in improving vehicle safety, and has been awarded the 2014 Global NCAP Consumer Champion Award Globally however, of the 65 million new cars sold around the world in 2013, 20 million of these fail to meet the UN crash test standards, have no airbags, no anti-lock brakes, and no electronic stability control. You have twice the chance of being killed or seriously injured in an ANCAP 1 star rated vehicle compared to an ANCAP 5 star rated vehicle. Accordingly, ANCAP recommends 5 star rated vehicles and to Accept nothing less.
- Safety Here and Now So there is already amazing safety technology in most of the vehicles sold in Australia: Plenty of air bags Reversing technologies such as sensors and cameras Braking technologies such as Anti-lock Braking Systems, Electronic Stability Control and now Autonomous Emergency Braking As well as Safety Driving Day Lights and many more …
- Next safety But what’s next in safety technology? Well, Vehicle-to-vehicle communication or V2V is one. Using this technology, vehicles may share critical data such as speed and position on the road. On-board computers share this safety information 10 times a second so vehicles can travel more efficiently and with fewer accidents.
- Connected Cars These are known as connected cars. Cars connected to one another and our infrastructure – sharing information. As a result, cars will become lighter, cleaner and smart enough to avoid crashes as well as traffic jams.
- Driverless Cars Sebastian Thrun, director of the Stanford Artificial Intelligence Lab is the driving force behind Google’s driverless car. Do you know – why? When he was younger his best friend who was only 18 at the time died in a car crash. Since then he has made it his life long ambition to save lives by deploying artificial intelligence to drive cars without human error. Over 90% of all motor vehicle accidents are a result of human driver error. Sebastian is quoted as saying “Generations after us look back and say how ridiculous it was the humans were driving cars”
- Google Former VP at General Motors and adviser to the Google Car Self-Driving Car Project, Larry Burns led discussions about what travel will look like in the years to come at RAA’s Future Mobility Forum just a few weeks ago in Adelaide. The fully autonomous Google car, which has no steering wheel, no pedals nor gearshifter, uses GPS, cameras and sensors that can 'see' up to 220 metres away to navigate its way to a predetermined address at speeds of up to 40km/h. "These sensors don't get tired or distracted and they don't drink and drive," said Burns, who added that driverless cars could cut road fatalities by up to 90 per cent. Google has produced 100 prototypes for US testing from mid-year and plans to commence a California-based pilot program in coming years And don’t think all autonomous vehicles are going to look like this …
- UK Many car makers have been testing self-driving cars! The UK will take a lead role in the promotion of autonomous vehicles following its approval of driverless cars on British roads from January next year. The UK's Transport Minister, Claire Perry, said driverless cars would transform the UK's transport network: "They could improve safety, reduce congestion and lower emissions, particularly CO2. Burns said the social and economic benefits of autonomous vehicles will make them commercially attractive around the world by 2018.
- Rear enders So what do we do until 2018? Well, we already know that rear end crashes lead the table and make up almost 20% of all types of motor vehicle accidents. But do we know why?
- Driver Distraction Well, driver distraction is a major cause. Almost 30% of crashes due to mobile phones and other forms of distracted driving involve drivers younger than 21. While this is statistical data from the U.S. – anecdotal data indicates this is also true in other countries. If this behaviour continues, this graph is likely to move through the age groups as this generation ages.
- Fatal Distraction Consequences of driver distraction can be fatal. Here is a local example: Graham Denton, a 52-year-old father-of-three, was killed while riding his bicycle when a motorist texting on his mobile phone ploughed into him on the Pacific Highway at Lake Macquarie near Newcastle. 30 year old Scaffolder Jason Rippard wishes every day he hadn't picked up his phone to check an earlier message to his ex-wife had been sent properly. As he rebuilds his life after spending three years in jail, he continues to spread the message to other drivers to put their phones away. No text message is more important than someone’s life.
- Driver Safety So don’t think that safety technology is the holy grail which will solve all of our problems - just yet! Until we are all being chauffeured around in autonomous driverless vehicles and able to freely use our mobile devices without distraction and without killing someone, you’ll have to adopt your own fleet management practices accordingly. We have just rolled out last week our online e-learning driver safety education to all of our drivers of both company and grey fleet vehicles in an effort to influence our driver’s attitudes and behaviour and make them all more safety aware.
- MAC I just wanted to leave you with this motor vehicle safety message. This image is currently used on billboards for South Australia’s Motor Accident Commission Safety Campaign. This campaign is aptly called: “We all Play a part”. You can tailor your driver safety policies, messaging, campaigns and training to address the highest risk and cost areas, all the while utilising technology in all its ever-changing forms to purchase the safest vehicles and increase driver safety awareness while reducing costs for your fleet as well as the cost to society. Be safe. Thank you.