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Companies, Stop Losing Revenue to Low MPG Vehicles!

Productivity

Recently I attended the Fleet Technology Expo (FTX) in Chicago. One especially well-attended session at the conference was titled “The Future Fleet Vehicle.” The panel included representatives from two truck original equipment manufacturers and another from a national fleet. The panelists discussed how the design of a work truck can actually improve fleet driver efficiency in the field. They agreed that increasing fleet driver efficiency in the field yields enhanced overall value for companies in terms of improved customer service levels, strengthened branding, and more revenue.

This premise rang true for me. At XL Hybrids, we develop and deploy fleet electrification and connected vehicle technologies that improve a vehicle’s miles-per-gallon (MPG). Part of our value proposition to fleets is that a more fuel-efficient vehicle with a higher MPG yields a more productive driver in the field.

How? A vehicle that drives further on a tank of gas (thanks to having higher MPG) helps that driver (who often doubles as a field technician or delivery specialist) to avoid lengthy fuel-up events at gas stations. In turn, less time spent re-fueling gives the driver more time to accomplish work in the field – revenue-generating work like auto glass repairs, cable service calls, parcel deliveries, food vending services, and passenger transport. More and more of our fleet customers are agreeing with this rationale.

Let’s look at a sample case study. Say a fleet work van with a 30-gallon gas tank gets 10 MPG while driving 25,000 miles per year. This van will require almost 85 fill-ups per year at gas stations.

If that same fleet work van had a 25 percent increase in MPG, then that van would require just 65 fill-ups per year. By increasing the MPG of the van, 20 fill-up events are avoided.

If each fill-up event takes, say, 15 minutes (fill tank, use bathroom, buy snacks/drinks, take a break, etc.), then the higher MPG van will create five hours of greater efficiency per year. Assuming a $50 loaded labor cost for that driver, that’s $250 of annual value created.

Over a 10-year fleet vehicle life, that is $2,500 of value per vehicle/driver.

For a 10,000 vehicle fleet, that is $25 million of value. Wow!

Another way to calculate this value of greater vehicle fuel efficiency would be to take a company’s average revenue-per-minute per driver, and multiple that by the total time saved from reduced number of fill-ups. The results would be similar and significant.

More and more, the above metrics are being adopted by fleet industry leaders that recognize the importance of overall vehicle efficiency, and the resulting productivity of drivers. When it comes to increasing driver productivity, all aspects of a fleet vehicle are now on the table for efficiency improvements.

Does your driver use computer systems in the cabin? Does your driver need to quickly access tools and equipment in the cargo area? Does your driver exit and enter the vehicle hundreds of times a week? Does your driver need to be routed in a specific way to reach all daily destinations in a certain time period? Does your driver take a route with lots of heavy stop-and-go traffic that lowers MPG?

If the answer to any of these questions is “Yes” and you are fleet manager, then you are probably investigating and deploying a range of cutting-edge solutions (e.g. various telematics, easier-to-access bin packages, automatic door systems and ergonomically-designed cabin electronics) in the pursuit of greater vehicle efficiency to help your drivers get more revenue-generating work done.

What is the best place to start improving vehicle and driver efficiency? XL Hybrids recommends start by boosting your vehicles’ MPG.

Many XL Hybrids customers are seeing a 25% improvement in MPG. In addition to thousands of dollars in reductions in annual operating costs, such as fuel, our customers are helping their drivers improve productivity in the field.

All the more reason increasing driver productivity by managing MPG is a trend fleet managers should follow.

Companies, Stop Losing Revenue to Low MPG Vehicles!

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