Spiralling post-COVID fleet management costs

Issue 8 2022 Logistics (Industry)

Determination of the precise total cost of ownership (TCO) related to operating fleets has always been difficult. According to Johan van Niekerk, Fleet Solutions Consultant at FleetDomain, an Argility Technology Group company, this is due to various issues including lack of information due to not capturing a holistic view of all vehicle expenses from a central source.

“As South Africa moved out of the full impact of the pandemic, significant cost increases were experienced with regards to vehicle ownership – regardless of whether they related to individual citizens or businesses managing fleets. Inflation of vehicle purchase prices, maintenance, tyres, and fuel over the past three years have combined to contribute to a 20 to 30 percent cost increase for an average passenger and light commercial vehicle,” says Van Niekerk.

He says the only way to tackle this spiralling TCO escalation is to implement a Fleet Management Information System (FMIS) as supplied and supported by FleetDomain. “To improve the costs and risks associated with fleet operations, businesses must take an all-inclusive management approach and ensure they have the information necessary regarding: accidents; fines management and personnel.”

Van Niekerk reveals some cost comparison models highlighting the TCO increases following COVID; comparing a selection of Vehicles purchased in 2019 and 2022 (see table 1.).

“Examination of the numbers in the table shows that expenses must be managed, controlled, and reduced in line with, or below inflation. Unmanaged vehicle expenses can end up incurring 10 to 23 percent greater costs than necessary. This can be explained when one considers that fixed costs are managed by accounts and variable costs are managed, in most instances, by fleet operations. The latter can either capture all expenses or they can implement the use of a maintenance or fuel card. In some instances, maintenance, tyres and fuel are all managed on one card,” he explains.

Van Niekerk says that companies often add a GPS/tracking device to enable them to locate assets and monitor driver behaviour. By scrutinising GPS/tracking kilometre usage and comparing it with card kilometre usage the actual usage per month can be determined.

“It is important to understand that a GPS/tracking device is not a fleet management system. Change in driver behaviour and meaningful savings will not be achieved without relevant information regarding speeding, harsh braking, acceleration, excessive idling and all the other actions performed by drivers that cause increased maintenance, tyre and excessive fuel usage. All of the foregoing can only be achieved with an FMIS.”

In post-COVID South Africa, vehicle price increases of between 27 and 32 percent – dependant on models and country of origin – have contributed significantly to TCO. “However, resale values of some models improved due to the shortage of new vehicles. Maintenance and tyre replacement come in at 17 to 21 percent of TCO, with the actual percentage increase being manufacturer/supplier dependent. Fuel has been identified as the most changed value, having been measured as a percentage of the overall at 96 to 145 percent (depending on mileage and application) in the TCO stakes.”

FleetDomain’s FMIS can integrate with finance institutions, maintenance, tyre, fuel and GPS/tracking service providers; placing all costs on one platform.




Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Wialon announces integration with fleet maintenance and optimisation platform
News & Events Transport (Industry) Logistics (Industry)
Fleet management software platform integrates with a fleet maintenance and optimisation platform to support mutual customers for better workflows and deeper insights into fleet operations.

Read more...
Remote solar farm monitoring
Power Management Logistics (Industry)
Ensuring solar farm installations operate at peak efficiency is no small feat. Owners need real-time insights into their installation’s performance to meet energy delivery targets and manage billing.

Read more...
Analyse, automate, and optimise logistics processes
neaMetrics Surveillance Transport (Industry) Products & Solutions Logistics (Industry)
In today’s rapidly evolving logistics sector, the pressure to improve process efficiency, optimise resource usage, and ensure seamless security is more intense than ever. Smart, proactive surveillance is no longer a luxury — it is a critical operational necessity.

Read more...
Open and collaborative logistics systems
Hikvision South Africa Surveillance Logistics (Industry) AI & Data Analytics
E-commerce and other high-volume logistics operations need open and collaborative technology ecosystems that drive efficiencies, throughput and digital transformation. Hikvision discusses the benefits of harnessing open and collaborative systems in the logistics market.

Read more...
Unlocking new efficiencies in private security
Security Services & Risk Management Transport (Industry) Smart Home Automation Logistics (Industry)
Justin Manson, Sales Director at Webfleet, discusses how the urgent need to protect life, and to do so more efficiently, is driving continuous innovation in holistic home and residential security services in South Africa.

Read more...
SA fleets face internal and external pressures
IoT & Automation Transport (Industry) Logistics (Industry)
Thousands of trucks clog South African border points and ports, causing shipping companies to levy congestion surcharges; fleet managers must enforce safety rules, develop comprehensive training programmes focusing on early warning systems and AI-powered technology

Read more...
Integrated transportation security
Guardian Eye AI & Data Analytics Integrated Solutions Logistics (Industry)
HG Travel installs an AI-powered camera system integrated across 115 vehicles throughout a fleet comprising 160 vehicles of different sizes, along with predictive and self-monitoring tools to track tyre condition, fuel consumption and theft, and overall vehicle maintenance.

Read more...
Simplify AARTO compliance for fleets
Guardian Eye IoT & Automation Asset Management Transport (Industry) Logistics (Industry)
While there are challenges around the management and implementation of the AARTO Amendment Act, there are also benefits that need to be understood today to ensure compliance and value tomorrow.

Read more...
From damage management to false alarm prevention
Dallmeier Electronic Southern Africa Transport (Industry) Surveillance Logistics (Industry)
Video surveillance is undergoing an exciting evolution; today’s IP-based solutions can be fully integrated into digital systems. With the increasing integration of artificial intelligence (AI); logistics, in particular, can make processes more transparent and exploit previously untapped potential.

Read more...
Protecting narrow areas in warehouse and logistics sites
OPTEX Facilities & Building Management Transport (Industry) Logistics (Industry)
Logistics facilities, warehouses and distribution centres are critical to the supply chain and any company’s business operation and assets. Any disruption can have enormous consequences, both functional and financial.

Read more...










While every effort has been made to ensure the accuracy of the information contained herein, the publisher and its agents cannot be held responsible for any errors contained, or any loss incurred as a result. Articles published do not necessarily reflect the views of the publishers. The editor reserves the right to alter or cut copy. Articles submitted are deemed to have been cleared for publication. Advertisements and company contact details are published as provided by the advertiser. Technews Publishing (Pty) Ltd cannot be held responsible for the accuracy or veracity of supplied material.




© Technews Publishing (Pty) Ltd. | All Rights Reserved.