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November 10, 2022

Transportation During a Recession: How to Keep Your Fleet Business Competitive

If you’re in the fleet business, you’ve probably been feeling the effects of the post-pandemic recession. In many European countries, market stagnation and rising interest rates combined with the Russian impact on supplies have only exacerbated the situation. In a situation of long-term stagnation that may last until the end of 2023 or longer, it becomes crucial to be as competitive as possible. For fleet business, this means keeping transportation costs while building new opportunities. Yet, in a market environment where many companies can’t afford high investments, how do you ensure your fleet business remains relevant and continues to grow? Take a look at some of the ways that you can keep your fleet business competitive during hard times.

The Importance of Fuel Costs

Saving fuel when managing a fleet has been a challenge since before the start of the COVID-19 pandemic. Additionally, the Russian and Ukrainian war brings new difficulties to juggle with for fleet managers in Europe. Fuel expenses can represent up to 60% of the total fleet operating budget. Quality fuel management and fleet management tools, such as telematics, can significantly decrease fuel costs by up to 25%. 

But what else can be done to bring those costs down? Vehicle quality is important for both safety and savings. Quality vehicles cost less on average than their cheaper counterparts and are more fuel efficient, which saves you money in the long run. Additionally, you can also consider larger trailers that can transport more in one trip, which inevitably influences fuel consumption. To compare trailer sizes, it’s a good idea to reach out to expert suppliers. You can check out the MHF UK website for sizes and costs, for example.

Building a larger warehouse network

Any fleet business that has a regional, national, or international customer density needs to address the crucial fleet/carrier balance. Essentially, your fleet logistics focuses on bringing the goods to the local warehouse. Carrier services will then be deployed to reach out to individual customers. 

So, it is easy to understand how y our warehouse network can affect fleet management costs. A small network means that vehicles must cover larger distances between each warehouse stop. On the other hand, improving the distribution system with additional warehouse points means three things:

  • Shorter fleet transport
  • Decreased fleet costs
  • Faster delivery to the end customer

The question that you’ll face is where to establish the different warehouse bases. Typically, it is something that will need to reflect your customers’ locations. 

Carbon-neutral transport

For fleet businesses, the recession is the perfect opportunity to make environmentally friendly changes. Carbon offsetting is the preferred approach when it comes to building a carbon-neutral fleet. 

 As a rule of thumb, 1L diesel burned creates 2.7kg CO2, and 1L petrol creates 2.4kg CO2. There are carbon onset schemes available to fleet companies where businesses can invest in projects that reduce carbon emissions. Financial offsetting is also an option via carbon credits, and it is tax deductible!

Yet, offsetting your carbon is not an excuse to do nothing. On the contrary, fleet businesses can optimise waste management, such as repurposing or recycling pallets, tyres, and fluid waste. Improving fleet logistics and transport schedules can also dramatically decrease your emissions and costs. 

Local Delivery Over Long-Distance Transport

The key to maintaining your fleet business during a recession is not only making sure you have low operating costs, but also that you are able to diversify your services, such as targeting quick commerce needs. Local delivery is not only less expensive than long-distance transport, but it’s also important for increasing the level of customer service. This is because it provides more options for delivery times and speeds. It also allows customers who purchase products online the ability to receive them in a matter of hours, which saves time and money on both ends. 

A q commerce fleet focus on a closed distribution network: 

  • Supplying local warehouses with inventory deliveries
  • Managing the local fleet, aka couriers on bikes and small vans for end deliveries 

Q commerce can not only help reach a new audience group, but it can also be the perfect opportunity for fleet businesses to branch out and manage big and small vehicles for all types of distances. 

Enhance Tracking Solutions

Maintaining a fast-paced transport schedule can make it impossible to reduce costs. Ultimately, if you want to keep your fuel and logistics costs low, the key is to:

  • Reduce the number of trips
  • Ensure no vehicle leaves until it is full
  • Reduce distance through your warehouse network

So, this will affect the schedule and create delays for your end customers. Yet, bringing enhanced tracking solutions that allow customers to follow their shipments can prevent complaints and dissatisfaction. Communication and transparency can help protect your business brand when changing fleet management strategies. 

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Von Leong


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