Understanding fleet expense management in logistics
Logistics owners, fleet managers and truck owner-operators struggle with fleet expense management owing to inflation, inefficient processes and lack of real-time information. In TomTom’s recent global study on the biggest challenges that fleet decision-makers face, 49% of fleet managers say that at least one of their team members spend 1.5 to 2 hours on quoting and invoicing, 42% on identifying and dispatching the best worker for the job, 43% on expense management and 40% on keeping customers informed. From the study it is evident that expense management is a time-consuming process.
What are the common expenses involved in fleet management?
The costs involved in logistics can range from fuel, toll payments, maintenance, insurance and other similar or unexpected expenses. According to a study conducted by SaveLifeFoundation, the largest share of the expense was spent on fuel or diesel. It accounts for little less than two-third (61%) of the total expenses. Toll fees and inter-state entry fees at checkpoints contribute around 14.9% to the expenses and about 2.8% of total expenditure was paid as bribes to various authorities during the trip. Therefore, fleet expense management becomes a tedious process unless it has a solution to streamline finances and cut down unnecessary costs.
5 ways to manage fleet operating costs and save money
The lack of real-time visibility and increasing costs involved in logistics can be addressed by implementing digital solutions. According to a recent report from PwC’s Strategy & consultancy, “Digitisation and automation of processes and delivery vehicles will reduce logistics costs for standardized transport by 47% by 2030”. Digitisation and Fintech solutions provide an effective method to manage fleet operating costs.
- Fleet Cards: Fleet cards or prepaid cards for fleet expenses help you unify different costs involved in logistics including parking, repairs, lodging and other expenses. You can set up restrictions on spending per transaction or driver based on the need and it also helps to prevent theft or misuse of money through digital payments and real-time transaction updates and history.
- Transport Directory: One of the additional fleet operating costs is empty miles where trucks that return empty to the destination spend on fuel and driver wages without productivity or revenue. This can be addressed efficiently through an online transport directory where shippers and carriers can book trucks and loads online without the need for brokers or agents and thereby reduce costs from middlemen and empty miles.
- GPS Devices: According to the Verizon Connect Fleet Technology Trends Report, GPS Tracking users from all industries observed a reduction in fuel costs by 8% on average. Additionally, individuals were able to save an average of 11% on accident costs and 10% for labor expenses during 2020.
- Payment Gateway: To maximize efficiency and manage fleet operating costs when it comes to logistics, unified payment services with online bill payments, spend control, and real-time visibility are the ideal solution. By utilizing these methods of streamlining your finances you can gain control over expenses and keep track in real time.
- Unified Platform: The National Logistics Policy 2022 has established the goal of reducing costs involved in logistics from 14-18% to 8% GDP within 5 years. There are a number of benefits of a Unified Logistics Interface Platform (ULIP) that will help to achieve this goal by streamlining operations and payments.
Discover how Axlerate helps to reduce costs involved in logistics?
Axlerate is a unified digital logistics management platform that helps to streamline logistics operations and fleet expense management. It provides multiple products including AxleTags, AxleCards, AxleFinance, AxleDrive, AxlePay, AxleDirectory and AxleMarketplace that helps to simplify tolls, fuel purchases, fleet expenses, loans, insurance, escrow, payments, truck booking, fleet management and the buying and selling of logistics products and services.
Let’s Wrap Up!
The task of having to manage fleet operating costs is complicated because of rapidly increasing expenses, outdated processes and lack of real-time visibility. Fleet expense management involves streamlining expenses related to tolls, fuel, parking, maintenance, insurance and more. However, adopting digital and fintech solutions like fleet cards, online transport directory, GPS devices, payment gateway and a unified logistics management platform like Axlerate will be an ideal solution to optimize fleet expense management in logistics for greater efficiency.