The Hidden Costs of Not Upgrading Your Fleet Tech

Introduction

For companies reliant on fleets of vehicles, upgrading to the latest fleet technologies like telematics, dash cams, and fleet management software can seem a sizable investment. However, not upgrading your tech can come with many hidden costs that actually make the upgrade financially beneficial. In this article, we’ll look at some of the major hidden costs of sticking with outdated fleet tech.

The Hidden Costs of Not Upgrading Your Fleet Technology

For UK companies that rely on fleets of vehicles, upgrading to the latest fleet technologies like telematics, dash cams, and fleet management software can seem a sizable investment. However, not upgrading your tech can come with many hidden costs that actually make the upgrade financially beneficial. In this article, we’ll look at some of the major hidden costs of sticking with outdated fleet tech.

Hidden Cost #1: Increased Fuel Costs

One of the biggest hidden costs of outdated fleet tech is increased fuel consumption. Modern telematics systems allow fleet managers to closely monitor driver behaviours that impact fuel economy, like speeding, rapid acceleration and deceleration, and excessive idling.

By controlling these behaviours through driver coaching, fleets with telematics can improve fuel economy by up to 20%. With the average HGV managing just 8-10mpg, a 20% improvement represents massive fuel savings.

Fuel Costs

Fuel costs have a significant impact on the transport and trucking industry. Here are some statistics and insights based on data up to January 2022:

1. Fuel Expenditure: For many trucking companies, fuel represents one of the largest operational costs, often accounting for as much as 20-30% of total operating expenses.
2. Fuel Price Volatility: The transport and trucking industry is particularly sensitive to fuel price volatility. Fluctuations in fuel prices can significantly impact profitability, especially for smaller companies with tighter margins.
3. Fuel Efficiency: On average, long-haul trucks (those travelling more than 100,000 miles annually) consume about 20,500 gallons of fuel per year. Given the high consumption, even a small improvement in fuel efficiency or a slight decrease in fuel prices can result in substantial savings.

Hidden Cost #2: Excess Mileage and Unnecessary Trucks

In addition to wasting fuel, outdated dispatching and routing technology can result in lorries driving excess mileage or even entire unnecessary trucks being used.

Route optimisation software can generate the most efficient delivery sequences and maps based on factors like current traffic, vehicle weight, road attributes, and more. By upgrading to modern software, fleets typically see mileage reductions of 10-20%.

Fewer miles driven means that the same cargo can be delivered with fewer overall trucks. If a fleet upgrade allowed a reduction of 15% of total annual mileage, some trucks could be taken off the road entirely.

5 Benefits of Accessing Telematics with Rugged Tablets

Here are 5 benefits of how truck drivers can use telematics on their tablets to improve their daily work:

1. Drivers can use telematics to find the nearest rest stop or fuel station.
2. Drivers can use telematics to check traffic conditions and plan their route accordingly.
3. Drivers can use telematics to see how much fuel they have used and to identify areas where they can improve fuel efficiency.
4. Drivers can use telematics to track their hours of service and ensure that they are in compliance with regulations.
5. Drivers can use telematics to communicate with dispatchers and other drivers.

Average Annual Fuel Savings with Telematics

Potential Fuel saving with Telematics for a fleet of 50 Trucks

By having access to a mounted tablet, Drivers can use the navigation to follow a route that is optimised to reduce Excess Mileage and potentially allow for a reduction of 15% of total annual mileage, some trucks could be taken off the road entirely

Hidden Cost #3: Reactive Maintenance

The preventive maintenance enabled by telematics and fleet management systems provides major cost savings over reactive maintenance.

Telematics sensors can track problems like high engine temperature, sudden tyre pressure drops, and increased vibration. This allows fleets to proactively address issues before they become major repairs. Regular maintenance saves an estimated £0.15 per mile versus reactive maintenance.

Cost Saving Calculation per Truck with Regular Maintenance

Cost Saving Calculation for 50 Trucks

Hidden Cost #4: Higher Insurance Premiums

Insurance companies offer discounts for fleets that use fleet safety technology. Video telematics can provide evidence in the event of an accident which reduces liability and claims. Some insurers offer premium discounts of between 3-7% for equipped fleets. This can save a 50-lorry fleet £6,000-£11,000 per year in premiums.

Potential Insurance Premium Savings

Combined savings per truck and a fleet of 50 trucks

1. Fuel Savings: We previously calculated a potential fuel cost savings of up to £180,540 for a fleet of 50 trucks. We’ll use this to derive the savings per truck and then for a fleet of 5.
2. Maintenance Savings: With regular maintenance, there’s an estimated saving of £0.15 per mile. For 100,000 miles, that’s £15,000 saved per truck.
3. Insurance Premium Savings: Assuming an average insurance premium of £200,000 for a fleet of 50 trucks, with a potential saving of up to 7%, we can calculate the insurance savings per truck and then for a fleet of 50

Combined Savings Table

The Costs of Upgrading

First, let’s review the typical costs for a 50-truck fleet:

Initial Hardware Costs

•   Rugged Android Tablets: estimated (£799 x 50) trucks
•   Handheld Barcode Scanners: estimated (£479 x 50) trucks
•   Dash Cams: estimated (£225 x 50) trucks
•   Telematics: estimated (£60 x 50) trucks

Summing these gives the total initial hardware costs.  

Total Cost over 5 Years: 50 Trucks

1. Initial Hardware Costs: £78,150
2. Recurring Software Fees (Monthly): £3,500
3. Total Cost over 5 Years: £288,150
4. Cost per Truck over 5 Years: £5,763

Potential Costs per Truck

That may sound expensive, but once we examine the savings these technologies unlock, you’ll see how the investment pays for itself.

• Reduce maintenance costs by up to 20%.
• Reduce truck downtime by up to 10%.
• Improve fuel efficiency by up to 5%.
• Reduce accidents by up to 20%.

In addition to the hidden cost savings discussed above, there are a number of other benefits to upgrading your fleet technology. These include:

Here are some additional benefits:

• Enhanced Safety: By monitoring driver behaviour, telematics can identify risky driving patterns. This allows companies to provide targeted training, ensuring drivers operate vehicles safely.
• Optimized Routes: With real-time data on traffic conditions, telematics can help identify the quickest and most fuel-efficient routes. This not only saves fuel but also ensures timely deliveries.
• Reduced Downtime: With predictive maintenance features, telematics can alert operators about potential mechanical issues before they become severe. This proactive approach reduces the time trucks spend in repair shops.
• Regulatory Compliance: Telematics systems can help ensure that drivers adhere to hours-of-service regulations, reducing the risk of fines and penalties.
• Environmental Benefits: Improved fuel efficiency and optimized routes mean fewer emissions. By reducing their carbon footprint, trucking companies can contribute to environmental sustainability.
• Enhanced Customer Service: With real-time tracking, customers can receive accurate delivery estimates. This improves transparency and increases customer satisfaction.
• Data Analytics: The vast amount of data collected by telematics systems can be analysed to gain insights into operations, driver behaviour, and more. These insights can drive further improvements and innovations.

For trucking companies looking to remain competitive in today’s digital age, investing in telematics isn’t just a good idea—it’s essential. The convergence of technology with traditional trucking operations promises a future of increased efficiency, safety, and profitability. As more companies recognize the manifold benefits of telematics, its adoption rate is expected to surge, paving the way for a smarter, more sustainable trucking industry.

Conclusion

Upgrading fleet technology requires an initial investment but the long-term savings from fuel, repairs, and insurance quickly offset the cost. With the average HGV costing £120,000-£150,000, any technology that extends the usable life of a lorry also generates a significant return on investment. Fleet managers considering an upgrade should look past the sticker price and focus on the long-term savings new tech can unlock.

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