Measuring your Return on Investment

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How much does it cost to operate your fleet?

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

Depreciation Fuel Accidents Maintenance Interest Taxes

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Benchmark Private Fleet Costs -

Determine your cost per mile to establish your own benchmarks.

• Total CPM = $2.27/mile• Cost of Sales = 7.4%• Maintenance = $0.28/mile• Tires = $0.036/mile• Self-Insurance = $1800/year• Spare Vehicle Ratio = 15%• Vehicles per Mechanic = 13• Non-Productive Driver Time

per Day = 2.2 hours– Based on a survey of 272

private fleets by IFMC, Inc. Includes all time spent other than dispatch, loading, and unloading.

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Where have my drivers gone?How can I keep my drivers?

According to ATRI’s 2006 study:

• Average age of an IBT (Teamster) driver – 57

• Average age of a TL driver – 46

• Drivers today do not have the industry background they did 10 years ago

• $3500 to recruit and train a new driver

1. 76% of respondents reported improved driver morale with onboard computers

2. 18% of respondents report increased productivity

3. 19% reported improved driver retention

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So, what are we going to do?

And in the process, we will:

• Improve Safety• Improve Regulatory

Compliance• Reduce Fuel Consumption• Reduce Maintenance Costs• Increase Productive Time• Increase Customer

Satisfaction• Provide Legal Protection

1. Make the drivers’ job easier

2. No more paper logs3. No more trip reports4. Protection against

false customer service claims

5. Protection against litigation

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Compliant, paperless logging makes Hours of Service compliance easier.

Automates DOT Logging– Log on at the beginning of

your shift– Log off at the end of your

shift– Hourly totals are all

calculated for you.– No more calculation errors

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Fuel Tax and IRP Reporting

– You enter fuel gallons purchased

– Miles by jurisdiction, odometer readings, time of entry and departure are all automatic

– You don’t have to complete DTR’s, just enter fuel purchases into the keypad

– Claim state/provincial refunds for non-highway fuel consumed

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Efficiency = Safety

Driving habits that improve MPG

improve safety.

Drive safer and more efficiently– Coaches and provides

feedback.– Know how all drivers

compare to each other, and to company averages.

– Monitor speed, shifting patterns, panic braking, idle time

– Plan and track and the miles and hours worked.

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Fuel Economy is Improved by Controlling Driving Habits:

• Idling• Controlling your Speed• Progressive Shifting• Rapid

Accelerations/Decelerations

“ The driver is arguably the principal variable in fuel mileage. There is as much as a 35 percent difference between the most proficient and the least capable drivers”

- The Fleet Manager’s Guide to Fuel Economy

Technology and Maintenance Council of the American Trucking Association

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What does idling cost?

Argonne National Laboratory study - September 21, 2004

• Average truck wastes 1830 gallons per year in fuel just idling

• 6 hours per day on average• Estimated 10M tons CO2, 50K

tons of NOX, 2K tons particulates emitted annually by idling

• Engine Maintenance Costs– 6 hours of idling = 42 miles of

engine wear– 6 hours idling contributes

$4.41/day to engine overhaul costs

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Idling Costs• 1000 RPM, 10 HP Draw• 6 hours/day• 1830 hours/year• 2196 gallons/year• $2.78/gallon (US DOE national

average price, 2/01/2010)• $6104.88 per year fuel

consumed while idling, per vehicle/

• What happens if you bring idle down to 10% or 300 Hours annually?

Fuel Consumed by Accessories during Idling (gallons per hour)

Brake Horsepower of Accessories

RPM 0 5 10 20 30

800 0.6 0.7 1.0 1.4 1.7

1000 0.75 1.0 1.2 1.55 2.0

1200 1.0 1.2 1.5 1.8 2.25

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Controlling Speed = Improving MPG + Improving Safety

• For every 1 MPH increase over 55 MPH, fuel consumption increases 2.2%.

• 7.5 MPG at 55 MPH drops to 6.6 MPG at 65 MPH

• $3537.36 in excess fuel (70,000 miles, $2.78 per gallon)

• 10 MPH average speed decrease equals 18% reduction in NOX emissions

American Trucking Associations Bridgestone Firestone ongoing testsTransportation Research Center, Inc(Society of Automotive Engineers J1263

recommended practice)

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Controlling Speed;Does slowing down

your fleet impact customer service?

What is the productivity cost of slowing your fleet down?

10 MPH increase does not equal 10 MPH increase in average speed.

• 55 MPH speed limit=50.1 MPH average speed

• 65 MPH speed limit=57.1 MPH average speed

American Trucking Associations study - 1998

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Lower Fuel Costs = Lower Vehicle Maintenance Costs

Speed vs. Vehicle Wear and Fuel Consumption

• Rapid acceleration consumes excess energy

• Rapid deceleration wastes energy

• Increase from 55 MPH to 65 MPH results in:

• Tire wear increases from 5% to 16% (depending on GVW)

• 10% to 15% decrease in miles to engine overhaul

• 15% increase in oil consumption• 15% in brake lining life

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Improving customer service = more revenue

• Plan your work, best utilizing people and equipment.

• Measure every hour worked by every driver.

• Measure every mile driven by every vehicle.

• Helps automate delivery information.

• Helps you plan routes more efficiently.

• Document delivery/location Information

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Safety is Everyone’s Responsibility

• Provides a silent witness on your side in an accident.

• Monitor Safety Programs.

Present the company as a professional organization that works to be a good

corporate citizen.

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What is it worth?

Some items are not easily measureable yet still provide positive return on investment.

• Safe Driving?• Happy Customers?• A Marketing Edge?• A Positive Image?• Professional Drivers?• Measurable Goals?• A Satisfied Boss?• What would happen to your

operations if you could have a supervisor go on every route every time?

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• Micro-Management• Big Brother• Top-Down• Tattle Tale• Gotcha!

• Objective vs. Subjective• Professionalism• Efficiency• $avings• MBO• ROI

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How do we start?

1. Slow – one area of improvement at a time

2. Consistent – never let your message waiver

3. Persistent – never let up4. Measure your progress in

key metrics annually5. Ask for help

Joel Beal

joelbeal@loadtrek.net

817.480.0926 (cell)

817.945.6850 (office)

www.loadtrek.net