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Vehicle Technology Return on Investment

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How to measure and maange your return on investment with a vehicle telematics and fleet management system.

Published in: Business
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Vehicle Technology Return on Investment

  1. 1. Measuring your Return on Investment<br />
  2. 2. 2<br />How much does it cost to operate your fleet?<br />
  3. 3. 3<br />Total CPM = $2.27/mile<br />Cost of Sales = 7.4%<br />Maintenance = $0.28/mile<br />Tires = $0.036/mile<br />Self-Insurance = $1800/year<br />Spare Vehicle Ratio = 15%<br />Vehicles per Mechanic = 13<br />Non-Productive Driver Time per Day = 2.2 hours<br />Based on a survey of 272 private fleets by IFMC, Inc. Includes all time spent other than dispatch, loading, and unloading. <br />Benchmark Private Fleet Costs - Determine your cost per mile to establish your own benchmarks. <br />
  4. 4. 4<br />Where have my drivers gone?How can I keep my drivers?According to ATRI’s 2006 study:<br />Average age of an IBT (Teamster) driver – 57<br />Average age of a TL driver – 46<br />Drivers today do not have the industry background they did 10 years ago<br />$3500 to recruit and train a new driver<br />76% of respondents reported improved driver morale with onboard computers<br />18% of respondents report increased productivity<br />19% reported improved driver retention<br />
  5. 5. 5<br />So, what are we going to do?<br />And in the process, we will:<br />Improve Safety<br />Improve Regulatory Compliance<br />Reduce Fuel Consumption<br />Reduce Maintenance Costs<br />Increase Productive Time<br />Increase Customer Satisfaction<br />Provide Legal Protection<br />Make the drivers’ job easier<br />No more paper logs<br />No more trip reports<br />Protection against false customer service claims<br />Protection against litigation<br />
  6. 6. 6<br />Compliant, paperless logging makes Hours of Service compliance easier.<br />Automates DOT Logging<br />Log on at the beginning of your shift<br />Log off at the end of your shift<br />Hourly totals are all calculated for you.<br />No more calculation errors<br />
  7. 7. 7<br />You enter fuel gallons purchased<br />Miles by jurisdiction, odometer readings, time of entry and departure are all automatic<br />You don’t have to complete DTR’s, just enter fuel purchases into the keypad<br />Claim state/provincial refunds for non-highway fuel consumed<br />Fuel Tax and IRP Reporting<br />
  8. 8. 8<br />Drive safer and more efficiently<br />Coaches and provides feedback.<br />Know how all drivers compare to each other, and to company averages.<br />Monitor speed, shifting patterns, panic braking, idle time<br />Plan and track and the miles and hours worked.<br />Efficiency = SafetyDriving habits that improve MPG improve safety. <br />
  9. 9. 9<br />Fuel Economy is Improved by Controlling Driving Habits:<br />“ The driver is arguably the principal variable in fuel mileage. There is as much as a 35 percent difference between the most proficient and the least capable drivers”<br /> - The Fleet Manager’s Guide to Fuel Economy<br />Technology and Maintenance Council of the American Trucking Association<br />Idling<br />Controlling your Speed<br />Progressive Shifting<br />Rapid Accelerations/Decelerations<br />
  10. 10. 10<br />
  11. 11. 11<br />Argonne National Laboratory study - September 21, 2004<br />Average truck wastes 1830 gallons per year in fuel just idling<br />6 hours per day on average<br />Estimated 10M tons CO2, 50K tons of NOX, 2K tons particulates emitted annually by idling<br />Engine Maintenance Costs<br />6 hours of idling = 42 miles of engine wear<br />6 hours idling contributes $4.41/day to engine overhaul costs<br />What does idling cost?<br />
  12. 12. 12<br />Idling Costs<br />1000 RPM, 10 HP Draw<br />6 hours/day<br />1830 hours/year<br />2196 gallons/year<br />$2.78/gallon (US DOE national average price, 2/01/2010)<br />$6104.88 per year fuel consumed while idling, per vehicle/ <br />What happens if you bring idle down to 10% or 300 Hours annually? <br />
  13. 13. 13<br />Controlling Speed = Improving MPG + Improving Safety<br />For every 1 MPH increase over 55 MPH, fuel consumption increases 2.2%.<br />7.5 MPG at 55 MPH drops to 6.6 MPG at 65 MPH<br />$3537.36 in excess fuel <br /> (70,000 miles, $2.78 per gallon)<br />10 MPH average speed decrease equals 18% reduction in NOX emissions<br />American Trucking Associations <br />Bridgestone Firestone ongoing tests<br />Transportation Research Center, Inc<br />(Society of Automotive Engineers J1263 recommended practice)<br />
  14. 14. 14<br />Controlling Speed;Does slowing down your fleet impact customer service? <br />What is the productivity cost of slowing your fleet down?<br />10 MPH increase does not equal 10 MPH increase in average speed.<br />55 MPH speed limit=50.1 MPH average speed<br />65 MPH speed limit=57.1 MPH average speed<br />American Trucking Associations study - 1998<br />
  15. 15. 15<br />
  16. 16. 16<br />Speed vs. Vehicle Wear and Fuel Consumption<br />Rapid acceleration consumes excess energy<br />Rapid deceleration wastes energy<br />Increase from 55 MPH to 65 MPH results in:<br />Tire wear increases from 5% to 16% (depending on GVW)<br />10% to 15% decrease in miles to engine overhaul<br />15% increase in oil consumption<br />15% in brake lining life<br />Lower Fuel Costs = Lower Vehicle Maintenance Costs<br />
  17. 17. 17<br />Plan your work, best utilizing people and equipment.<br />Measure every hour worked by every driver. <br />Measure every mile driven by every vehicle.<br />Helps automate delivery information.<br />Helps you plan routes more efficiently.<br />Document delivery/location Information<br />Improving customer service = more revenue<br />
  18. 18. 18<br />Provides a silent witness on your side in an accident.<br />Monitor Safety Programs.<br />Present the company as a professional organization that works to be a good corporate citizen.<br />Safety is Everyone’s Responsibility<br />
  19. 19. 19<br />Safe Driving?<br />Happy Customers?<br />A Marketing Edge?<br />A Positive Image?<br />Professional Drivers?<br />Measurable Goals?<br />A Satisfied Boss?<br />What would happen to your operations if you could have a supervisor go on every route every time?<br />What is it worth?Some items are not easily measureable yet still provide positive return on investment. <br />
  20. 20. 20<br />Objective vs. Subjective<br />Professionalism<br />Efficiency<br />$avings<br />MBO<br />ROI<br />Micro-Management<br />Big Brother<br />Top-Down<br />Tattle Tale<br />Gotcha!<br />
  21. 21. 21<br />How do we start?<br />Slow – one area of improvement at a time<br />Consistent – never let your message waiver<br />Persistent – never let up<br />Measure your progress in key metrics annually<br />Ask for help<br />
  22. 22. Joel Beal<br />joelbeal@loadtrek.net<br />817.480.0926 (cell)<br />817.945.6850 (office)<br />www.loadtrek.net<br />

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