What Are the True Costs of Fleet Vehicle Breakdowns?
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Vehicle breakdowns are inevitable in fleet operations. These breakdowns often come with heavy expenses, and on many occasions, fleet managers find it challenging to control and minimise costs effectively. Some of these breakdowns result from issues that can easily be avoided through careful monitoring and maintenance scheduling.
Maintenance costs form a significant portion of overall fleet expenses. Every breakdown leads to costly repairs, operational disruptions, and revenue loss.
Vehicle breakdown expenses go beyond repairs; there are other financial and operational repercussions. Take a look at this breakdown of the direct and hidden costs:
1. Direct costs of fleet vehicle breakdowns
Repair and maintenance costs
Unexpected repair expenses vs. scheduled maintenance Unplanned repairs due to the failure of vehicle parts typically cost more than planned maintenance. Suppliers often order vehicle parts in bulk, which can lead to longer waiting times in the case of emergency repairs. Depending on where the components are outsourced, some orders may be quick, while others could take longer to arrive.
When there are emergency repairs, the vehicle parts that need replacing might not be available. This leads to a rush in individual orders, which come at an extra expense. The mechanics will also need to work overtime to ensure the repairs are done as soon as possible, further straining the budget. However, with a planned repair service, you are certain to find the replacements there, and the mechanic ready for you.
Towing and roadside assistance
Expenses for emergency roadside services A vehicle that breaks down en route requires roadside assistance, such as emergency towing. Depending on the provider, this service may be covered by a monthly subscription to ensure fleet businesses do not have to worry about paying when it is time for assistance, or charged per incident. However, both options typically include a call-out fee which is separate from the labour costs. If the breakdown occurs after hours, charges may escalate. These charges also vary depending on location.
2. Indirect costs of fleet vehicle breakdowns
Lost productivity and downtime
Delays in deliveries and missed service appointments Sudden breakdowns reduce productivity levels and delay fleet operations. This results in late deliveries or missed service appointments. These unforeseen mechanical failures also pose security risks to fleet vehicles and cargo, as it might not be safe for trucks to be stranded for hours. Furthermore, if the driver is transporting temperature-sensitive goods, a breakdown could compromise product quality, leading to financial losses and customer dissatisfaction.
Idle driver wages and operational inefficiencies Certain vehicles not working means some drivers might be inactive for some time. Depending on company policy, the drivers still need to be compensated a fraction of their wages while on standby, creating unproductive labour costs.
Customer impact and reputation damage
Late deliveries lead to a dissatisfied client If we use the above-mentioned example of transporting temperature-sensitive goods, late deliveries can shorten the product's shelf life, causing financial losses for retailers and damaging supplier relationships. This creates a dent in your company’s reputation and may lead to the loss of contracts or penalties for service days.
Administrative burden
Extra time spent coordinating repairs An often overlooked aspect of vehicle breakdowns is the administration of it all. Fleet managers need to coordinate repairs and reschedule operations, which takes away from other daily tasks. It also increases the fleet manager’s workload and responsibilities.
Legal implications It is required by law that all vehicles must be roadworthy to ensure safety for all road users. For this reason, vehicles that fail to meet these standards may face legal consequences, such as fines or a potential lawsuit. This sometimes means regular court appearances, which take time away from other work but also add to the time spent on administration. The outcome could also result in heavy fines or the business being forced to close down.
3. Hidden costs that add up over time
Higher insurance premiums Increased claims can lead to higher premiums. Poorly maintained vehicles are more likely to experience mechanical failures. This results in more claims for services such as towing and start assistance. An increase in such claims leads to high premiums as vehicles are now flagged as more of a risk. Furthermore, if worn-out vehicles cause accidents, the victims of those accidents can claim from your company's insurance.
Fuel inefficiency Poorly serviced vehicles consume more fuel due to components such as air filters, fuel injectors, and spark plugs being worn out. Our article on how to reduce fuel consumption highlights vehicle maintenance as one of the contributing factors to fuel inefficiency. Regular maintenance of these vital components ensures optimal combustion and engine performance.
The article also points out the importance of tyre pressure and wheel alignment, stating that a 1% decrease in tyre pressure results in a 0.3 % reduction in fuel economy.
As fuel expenses take up most of a fleet business’s budget, this further proves how skipping maintenance schedules will lead to greater costs.
Unplanned detours and idling during breakdowns When vehicles experience mechanical failure, drivers might need to take detours to find a safe spot for repairs or towing. This increases the amount of fuel being used. While waiting for roadside assistance, vehicles sometimes idle for prolonged periods, which further adds to fuel usage.
Impact on driver satisfaction and retention The frequent breakdowns often leave drivers in a state of frustration as they also want to accomplish tasks with minimal disruptions, as this has a good reflection on overall performance. This affects employee morale and could result in lower driver retention and increased hiring costs.
How to prevent costly fleet vehicle breakdowns
The true costs of vehicle breakdowns have proven to be more expensive than scheduled repairs. However, due to the workload and nature of the fleet management environment, it is easy to overlook things such as maintenance schedules to prioritise meeting client expectations. This common challenge can be resolved using technologically driven solutions.
Preventative maintenance involves practices that fleet managers can do to address maintenance concerns before they become bigger issues. It can be done in two ways:
The role of IoT technology in predictive maintenance
IoT-based predictive maintenance is an approach that involves using the Internet of Things (IoT) to gather and analyse data about vehicles, assets, and machinery. This technology consists of sensors or devices that are installed in the vehicles to collect and convert the data into valuable information. Through this, fleet managers are able to receive the information in its simplest form and make informed decisions.
Cartrack’s preventative maintenance solutions in action
Cartrack caters for fleets of any kind. Let’s have a look at how our preventative maintenance solutions helped a construction fleet reduce downtime.
Case Study: Concord Cranes
Concord Cranes specialises in crane hire solutions. They have over 180 cranes and provide mobile cranes for hire, professional rigging, transport, and specialised lifting projects. Their main challenge was that they found it difficult to accurately record the hours each crane worked, making it difficult to maintain and deliver them to their clients on time.
How we helped them:
Our IoT device and specialised power take-off sensors make it possible for Concord Cranes to accurately monitor their cranes' on-site working hours and the mileage travelled. The information they receive from this allows them to monitor the conditions and usage of their cranes so they can form preventative maintenance measures for their clients and increase their fleet lifespan.
Using insights from our fleet management platform, Concord Cranes now reduces maintenance costs by minimising the number of cranes sent for avoidable and expensive fault-related repairs. This also helps them minimise unplanned downtime.
Our fleet management and maintenance system has improved their overall brand reliability with their customers, ensuring their cranes are always safe and in working order. Additionally, detailed maintenance schedules have reduced the number of unexpected breakdowns and allowed them to plan ahead to ensure vehicle availability and minimal disruption during the delivery of cranes to customers.
“Using Cartrack’s advanced fleet management, we have been able to increase our operational efficiency to deliver a better service to our customers, as well as effortlessly establish a maintenance cycle that reduces our costs and increases our fleet longevity.” | Gareth Langley, Concord Cranes operations manager
Reduce the costs of fleet vehicle breakdowns with Cartrack
The Cartrack telematics technology provides vehicle diagnostics so you receive real-time alerts of vehicle maintenance issues such as engine faults, water fluctuations, and oil level levels. This information helps you make necessary arrangements on time so you can avoid unplanned fleet inactivity. Our platform also gives you reminders of maintenance schedules so you can warn drivers in advance and keep workflows undisrupted.
Here are other Cartrack solutions that you can add to your preventative maintenance strategy:
Route optimisation Know where your vehicles are at all times using our GPS tracking technology and ensure drivers follow efficient routes using our route optimisation tool. The more kilometres a vehicle travels, the more it is likely to have worn-out parts that need to be replaced. Through an analysis of traffic conditions and historical travel trends, our route optimisation tool suggests the most cost-effective routes that drivers can use to get to their destinations. By using this feature, you reduce the long routes and detours that increase fuel consumption and vehicle mileage.
Driver monitoring Harsh events: Aggressive driver behaviours such as excessive idling and harsh braking have proven to be some of the factors contributing towards greater vehicle wear and tear. Our IoT device alerts you of these driving habits and gives you a detailed insight into each event.
AI Cameras: The Cartrack AI Multivison camera solutions make use of artificial intelligence technology to protect your drivers from accidents that could lead to major repair costs. The cameras monitor distracted driver behaviours such as drowsiness, cellphone use, and smoking. Once detected, drivers will receive real-time audible alerts so they can instantly correct their actions. As an extra layer of protection, these cameras also help drivers detect blind spots and keep a safe following distance.
Driver Scorecards: Encourage better driving habits using our Driver Scorecards. This feature rates each driver based on their harsh events and adherence to planned routes. You can use this information to reward those with high ratings, boost employee morale, and identify those who need more training on good driving habits.
Stop breakdowns before they start—explore Cartrack’s preventative maintenance services!
Monitoring vehicle performance using telematics helps detect issues early. By investing in our fleet management solutions, you ensure that your vehicles are always fit for the road. Reach out to our fleet consultants to get the most out of your fleet, increase vehicle lifespan, reduce downtime, and, most importantly, save costs!
Frequently asked questions about fleet maintenance
Q. What is the biggest challenge in fleet management?
The biggest challenge in fleet management is managing high operational costs. The day-to-day expenses of running a fleet include fuel, maintenance, repairs, and compliance fees. In the absence of proper management, these daily expenses can significantly impact the business's total profit.
Q. What are the benefits of total preventive maintenance?
Preventative maintenance enhances drive safety, reduces downtime, increases efficiency, improves vehicle performance, boosts customer satisfaction, and helps you save costs.
Q. What are the different types of maintenance strategy
There are four main types of maintenance strategies:
Reactive maintenance: Also known as breakdown maintenance, this is when you fix things only when they break. This method only works well on low-cost equipment that is not essential for operations.
Preventative maintenance: This approach relies on following predefined schedules in order to detect problems and fix them before they become bigger issues.
Predictive maintenance: Uses real-time data from advanced technologies such as IoT sensors, artificial intelligence, and machine learning to analyse potential problems such as engine temperature, oil conditions, battery conditions, and brake performance.
Reliability-centred maintenance (RCM): This is a process of determining the most effective maintenance strategy for each of your assets by combining all the other methods.
Vehicle breakdowns affect fleet costs beyond repairs. They can lead to increased downtime, missed deliveries, and legal implications. Find out how to reduce these expenses.
