There can’t be many van fleet operators who aren’t being asked to pare down their costs to a minimum in a bid to stave off the effects of the recession.

In this article:
Buying the right vehicle
Extras – what to choose
Speed limiters
Telematics
Finance options
Fuelcards
Driver training
Disposal
Fleet Van top tip
Top 10 tips for CV operation

As UK plc seemingly grinds ever more to a halt, each business cost is being examined and if necessary trimmed or ditched altogether as profits plummet and forecasts look bleaker.

But the utmost care must be taken in cutting costs – for what at first may appear to be a good money-saving idea may in fact end up costing you money.
For example, cutting back on a driver training programme will save cash in the short-term, but if it means your vehicles are involved in more accidents, the front-end savings will soon be negated by extra repair costs and downtime, not to mention a rise in your insurance premiums.

So just where can money be saved and where should it be spent? We’ve put together a series of tips here which are guaranteed to save cash for any van fleet. 

And one of the unexpected upsides is that by taking our advice, you’ll probably improve your green credentials too. After all, many of our tips involve driving fewer, slower miles – and fewer, slower miles means less pollution in the air.

Buying the right vehicles

Cost-cutting ideas start even before a vehicle is purchased.
Many fleet operators buy, say, Ford Transits because they always have done. Nothing wrong with the Ford Transit of course, but by examining the exact role of each vehicle over its fleet life, you may discover that in fact a Ford Transit Connect would do the trick just as well.

By choosing a smaller vehicle, both front-end price and general running costs will be lower. If you lease your vehicles, most of the major contract hire firms offer a consultation service in which an expert will advise you on the best vans for your needs.

For outright purchase customers, many of the major van manufacturers now have dedicated van centres manned by experts who will only be too happy to talk about your requirements. 

If your local dealer has nothing more than a shed for vans at the back of his car showroom, maybe it’s time to change to another dealer. Downsizing to smaller vehicles can save you thousands of pounds.

Extras – what to choose

Nowadays, you buy vans which are basic boxes and there are endless extras than can be added on. So can you save cash by buying optional extras? Most definitely yes. Sometimes you have to speculate to accumulate.

The biggest bangs for bucks bonanza in the Fleet Van book is the reversing sensor. For around £200 per vehicle, this dazzling little safety device will start bleeping when your drivers get within a foot or two of a stationary object, thus saving your vehicles from untold knocks and scrapes. 

This will not only save cash on repairs but will make your vans worth a lot more when you come to sell them. 

For leased vehicles, you’ll save a fortune on recharges when they are handed back. The only downside of reversing sensors is that their benefits are nigh on impossible to quantify. 

After all, how many of your drivers are going to report to you that they narrowly missed backing into a lamp-post while out on their rounds? We’ve also heard that sensors are not particularly effective on high-roof vans. Apparently drivers don’t look above head height and carry on causing damage at the top of their vehicles.

Other cost-savers include plylining which, although it will add about £200 to the price of your van, will ensure that you get around £500 back at selling time against a van that has been badly scratched in the cargo area.

You may also wish to consider metallic paint, as vans with a snazzy coat will be worth extra at selling time too, although any scrapes will cost more to fix than on a flat-painted van.

Speed limiters

Second in the bangs for bucks league are these little devices which can be adjusted to your fleet needs.

Unless you have trusted employees, the likelihood is that once out on the motorway they’ll be thrashing down the outside lane at 90mph, costing you extra in fuel and endangering both their vehicles and their lives. For around £300 per vehicle this problem will be halted at a stroke and you’ll suddenly find your fuel bills plummeting.

We’d recommend setting the top speed at 70mph. At 60mph, as we found on a test vehicle recently, it took an age on two-lane motorways to get past the trucks which are governed at 56mph, causing an immense amount of frustration not only for us but for the traffic behind us too. 

You’ll have trouble convincing your drivers that speed limiters are a good idea but at the end of the day there just isn’t any excuse for speeding. Experts reckon that speed limiters will reduce fuel consumption by around 10%.

Telematics

The telematics industry is relatively new but growing in leaps and bounds. From initially being labelled a ‘spy in the cab’, many van fleets are finding that telematics systems enable more efficient use of vehicles – and the drivers don’t mind too much as long as they are involved right from the beginning. 

Looking at the case study (see panel), it’s plain that telematics systems can benefit drivers as well as fleet operators. 

Systems range from simple sat-nav units you can pick up in Halfords for just over £100, to fully-fledged real-time blockbusters that will do just about everything apart from make the tea.

Which system you choose depends on how much information you need and how much you are prepared to pay out upfront, but the fact of the matter is that as soon as a telematics system is installed, your fleet will start saving cash.

For starters, you’ll be able to keep a close watch on your drivers to make sure they are taking the most effective routes – and with the more expensive systems, you’ll be able to pick up on any bad driving and speeding.

Ideally a telematics system should be linked into the aforementioned speed limiters for optimum effect.

If your drivers complain, the likelihood is that they regularly break the law and cost your company money, in which case you probably don’t want them working for you anyway.

Responsible drivers will realise the benefits that a telematics system can bring to one and all and will embrace the new technology.

Finance options

Despite the existence of a plethora of leasing and rental options, the majority of van fleet operators still outright purchase their vehicles, which means that for a large fleet, millions of pounds are tied up while vans are losing value month by month.

The recession has certainly skewed the benefits of the situation towards leasing so it’s worth doing a bit of number crunching to assess your individual needs.

If your vans are halfway through their fleet life, many of the bigger leasing firms offer sale and leaseback deals. In other words they pay cash for your vehicles and then rent them back to you. Northgate has been offering flexible rentals for some time – a system that is halfway between leasing and spot rental – while on page 4 in this issue we report on a new deal from Lombard which promises cost savings of 25% over daily rental while being around 5% more than contract hire.

A leasing deal will probably cost you a little more than outright purchase at the end of the day – after all the leasing firms have to make a profit too. But the benefits are many. You’ll have extra cash to spend on your core business and you won’t be responsible for selling your vans at the end of their lives.

Fuelcards

If you allow your drivers to pay for their fuel and then reclaim the money from receipts, you are leaving yourself open to all kinds of abuse. We know a driver who regularly gets his cigarettes paid for by his firm (he’s found a little garage that still gives written receipts) and there are all sorts of other wheezes and scams that you may fall foul of.

There seems to be a new fuelcard being offered every week at the moment so there will be no shortage of options to suit your particular needs. You’ll get regular reports on fuel usage for each driver so you’ll soon be able to discover who’s getting 35mpg and who’s only managing 28mpg.

Then it’s down to you to take action, either using the carrot or the stick.

Driver training

This has traditionally been a grey area for fleet operators for while the driver training firms will extol the benefits of launching a scheme, actually quantifying the benefits have been difficult. The industry has also suffered from its fair share of cowboys.

The introduction of the Government’s worthy SAFED scheme for vans (it stands for safe and fuel-efficient driving) has largely solved the problem of quality and has come up with some very specific numbers in the savings department.

After a one-day course, SAFED reckons on 16% fuel consumption reduction, 56% reduction in driver faults and 34% reduction of the number of gear changes. The fuel consumption reduction alone represents a saving of up to £500 of fuel per vehicle per year, depending on mileage.

Disposal

If you lease your vehicles, disposal won’t be a problem but if you own them, failing to choose the right disposal method could cost you hundreds of pounds per vehicle.

Most of the big auction companies will give free advice about whether or not to repair a vehicle before selling it and when to put your vehicles through the halls.

But increasing the internet is being used for successfully selling vans, so check out all the options first. 

Fleet Van top tip

If you are having problems persuading your van drivers to slow down – and thus save fuel – consider paying them to do so. Bizarre? Well, maybe not. 

Giving drivers a financial incentive to change their driving style to reduce fuel use is the only way fleets are going to drive down their impact on the environment, according to emissions software specialist Lysanda.

If drivers knew they were going to receive a share of the fuel cost savings they achieved, Lysanda believes they would change their driving styles immediately.

Introducing this type of initiative could also address the problem of recruiting and retaining reliable staff. Simon Harris, Lysanda’s marketing director, said: “Van drivers who may be earning less than £20,000 may wonder why they should make an effort to save fuel when it benefits their bosses financially, but not them. They read reports of fat cat wages and rising company profits at a time when their net wages are going backwards. 

“Offering a share of the money saved when fuel bills drop means that, as well as putting less of a strain on the fleet budget, drivers get a regular bonus. It could even help increase employee loyalty.”

Top 10 tips for CV operation

  1. Think about what you need to carry and select a vehicle with the right load carrying capacity and engine size – and design the interior to make the best use of space.
  2. Use a specialist converter to fit the vehicle in line with legislation. Cutting cost at the start may cost much more in the long run.
  3. Install racking and shelving along both sides of the van and against the bulkhead to make the best possible use of available space.
  4. Allow room for heavy and bulky items in the cargo area but remember to secure them safely before driving the vehicle.
  5. Use frame ends and spare bulkhead space for mounting safety gear such as fire extinguishers.
  6. Load the vehicle to distribute weight evenly between the axles. Uneven loads will affect how the vehicle handles.
  7. Store small parts, tools and equipment in secure storage to prevent them moving around when the vehicle is in motion.
  8. Organise stock and components into separate compartments so that they can be found quickly and easily on site for optimum productivity.
  9. Lockable cabinets and drawers prevent casual theft which can add up over the course of a year.
  10. Install hand wash, cleansing facilities and lighting appropriate to your work requirements.

Source: Lex Vehicle Leasing