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Initiative to Reduce the Cost of Being Off the Road by Laura Jeeves

Initiative to Reduce the Cost of Being Off the Road by
Article Posted: 07/28/2016
Article Views: 75
Articles Written: 3520
Word Count: 584
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Initiative to Reduce the Cost of Being Off the Road

RAC Business has recently published its research into the obstacles faced by professionals in the freight industry when attempting to co-ordinate the activities of a large fleet. According to this research, haulage firms frequently lose in excess of £7,000 every year due to broken down vehicles standing empty.

What Was the Research and What Did It Say?

The research involved an investigation of the activities of some 500 businesses of different sizes, and paid special attention to the obstacles overcome by fleet managers and other administrative personnel working within the freight industry. Of special note were the parts of the research focusing on losses due to breakdowns.

According to RAC Business’s results, 41% of logistics firms operating vehicles between 3.5 and 44 tons had to contend with idle vehicles (due to mechanical failure) two or more times every month. 43% of respondents said that a huge number (around a quarter) of mechanical failures that occur within their fleet were preventable, if only they had been noticed, discussed and dealt with earlier. 32% of respondents said that, as a result of breakdowns, their businesses faced losing as much as £3000 every day.

What Does This Mean for the Freight Industry?

These figures bring home just how damaging breakdowns can be to any firm’s bottom line. Most shocking of all is the idea of these vehicles eating into their fleet’s profit margins when just sitting in depots or garages. The best way to minimise these sorts of opportunity costs is simply to get breakdowns dealt with as quickly and efficiently as possible.

However, this isn’t always as easy as it sounds: particularly in small businesses, mechanics’ fees can be a significant overhead. Even in larger firms, the larger number of vehicles means more breakdowns and therefore more fees. What’s more, these costs are frequently unpredictable and hard to budget for: a fleet may run smoothly one year, then be plagued by breakdowns the next.

What Can We Do About It?

The RAC has recently started offering a subscription breakdown service, allowing for up to four breakdowns per vehicle each year. Therefore, apart from in extreme circumstances, a company with RAC breakdown cover will be paying a predictable, consistent cost every year, and in return its vehicles will all be seen to by the RAC as required. This system is likely to be attractive to large and small businesses alike - particularly those with smaller fleets - as it will allow fleet managers to take some of the unpredictability out of the maintenance budget. There’s also the bonus of knowing that your vehicles are being looked after by one of the biggest names in the freight industry: the RAC.

Whether a subscription based cover service is right for you or not, there’s no doubt that good maintenance is key to keeping a smooth, efficient and profitable fleet on the road. As well as making provisions for breakdowns when they do happen, ensuring that all vehicles are regularly inspected and drivers are incentivised to report faults are big parts of keeping your overheads and opportunity costs as low as possible.

Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry. Connecting logistics professionals across the UK and Europe through their website, Haulage Exchange is the leading freight industry service for matching haulage jobs with available vehicles. Over 4,000 transport exchange businesses are networked together through their website, trading jobs and capacity in a safe 'wholesale' environment.

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