How to achieve fleet cost savings across Latin America
Among the focuses of Fleet LatAm Conference 2021 on Thursday (22 April) was achieving cost savings in your Latin America fleet, a key differentiator impacting the total cost of ownership (TCO) in your fleet and increasing the bottom line in companies today.
While establishing ways to make your fleet more efficient is crucial to cutting cost, some of the major aspects of fleet management which needs to be kept under control include fuel usage, maintenance costs and the impacts of accidents and theft, the latter two directly connected to insurance premiums.
“One of the main building blocks of our fleet strategy entails having a well implemented safety culture which reflects on the daily behaviour of our drivers," Mariana Costa, Latam Fleet Service Delivery Manager for international farming company Syngenta said at the event.
Another way to cut costs is to optimize vehicle acquisition strategies, and this means selecting the right models for your fleet all while taking advantage of economies of scale. The latter can be achieved by matching proven global strategies up with local customs and developing a standard fleet management policy across multiple countries.
According to Rodrigo Fernandez who is Region Procurement Head for Indirect Materials at multinational construction firm Hilti, "when seeking vehicles, adapt global IFA [International Frame Agreements] to local needs and when it comes to leasing contracts, put together flexible kilometer agreements to get the best bang for your buck."
Besides selecting the right vehicle, reducing accidents, and increasing safety, cutting costs also means reducing fleet idleness, cutting down on emissions, and improving driver experience," added regional procurement manager Vasco Fernandes of food and beverage company Nestlé in the America.
Rodrigo Fernandez (Hilti) and Vasco Fernandes (Nestlé) (source: handouts)
The main things that impact total cost of mobility (TCM) are innovation (to what extent telematics and real time data reports are used), contract details (mileage, extensions, modifications), model selection (volume bundling, fuel consumption of models), and driver behaviour.
Electrification, a viable option?
Considering electric vehicles (EV) could be a solution to cutting costs for some companies, depending on the profile of your fleet.
Besides improving the environment by reducing harmful emissions by some 20%, fleet managers – on average - can benefit from a 40% reduction in vehicle taxes and a 30% savings on fuel consumption by using hybrid vehicles, according to LeasePlan executives Karla Flores (Commercial Director) and Edgard Torres (Customer Success Director).
Karla Flores and Edgard Torres (LeasePlan) (source: handouts)
“Keep an eye on LCVs, SUVs and pickups as we have been seeing OEM offers for these types of vehicles increasing more and more lately. Fleet managers, start making the transition from fuel management to energy management,” said Element Fleet Management strategic consultant manager Javier Cabrera.
Javier Cabrera (Element Fleet Management) (source: handout)
“Once you go EV, you will never go back to ICE [internal combustion engines],” said Aditya Jairaj during the event, who is Nissan Motor Corporation Director & Chief Marketing Manager for Electric Vehicles in North America.
Although on the rise, the transition to EVs still faces challenges in Latin America, according to Marcelo Tezoto who is General Motors Senior Manager for Direct Fleet Sales in Brazil and South America.
“For now, the trend to a more sustainable fleet involves vehicles with smaller engines,” Mr. Tezoto said, citing examples such as 1.0 and 1.2 turbo-charged engines in South America.
In the end, these were just a few of the cost-cutting tips for fleet managers that were addressed during the event. Stay tuned next time as we will be hosting the Global Fleet Conference on 12 May. See you then!
Read more about the 2021 Fleet LatAm Conference
Image: Mariana Costa (Syngenta)
