The majority of business owners and fleet managers think that investing in GPS fleet tracking technology is an expense. If the technology is used as is intended to be, this couldn’t be further from the truth. The mindset that it is an expense is the thing that holds back more businesses than anything else and that is the biggest myth out there.
GPS tracking service is one of the best dollar-for-dollar ROI’s a business can receive. Depending on fleet size, thousands if not millions of dollars are returned to your bottom line. The ROI can come from better intelligence in many different parts of your fleet operations.
Over 100% return on your investment can be found just from making small adjustments to the way your fleet operates such as optimizing the routes, cutting idle time, and reducing a few labor hours a week per employee.
Imagine if you had an extra few thousand dollars a year. What could you do with that money? Surely, the answer is “a lot”.
Let’s pick a fleet of 10 mid-sized vehicles averaging 10 MPG with an employee making $15.00 per hour and reduce each vehicle’s miles driven on a daily basis by just 2 miles due to better routing/dispatch a GPS fleet tracking system will provide.
1. Reduced Vehicle Wear & Tear
20 miles per day saved (10 trucks x 2 miles saved) or 440 total miles saved per month (22 working days per month x 20 miles saved per day). That equals $374 saved each month (440 miles x $0.85 average vehicle cost/maintenance per mile driven)
2. Reduced Mileage
Minimum $6.50 or 2 gal of fuel saved per day (10 trucks each saving .2 gal per day x $3.25 per gal). That equals at least $143 Saved per Month in Reduced Mileage ($6.50 x 22 working days)
3. Reduced Idle Time
15 minutes reduced per truck per day (equivalent of three, 5 minute idle stops), 55 hours of reduced idling per month ((15 mins x 10 trucks)/60 x 22 working days), 27.5 gal saved per month (0.5 gal per hour fuel burned x 55 hours). That equals $89 Saved per Month in Reduced Idling (27.5 gal per month x $3.25 per gal)
4. Labor time savings
5 Minutes of labor time saved per day (25 minutes per week or 1.7 hours per month) or $25.50 saved per employee/per month (1.7 hours x $15 per hour). That equals $255 Saved per Month in Reduced Labor ($25.50 x 10 employees)
If the client from this example signs a 1-year contract with iTrack America he should pay $259.90 for 10 vehicles per month, but the calculations show that he will save an average of $860 every month. That results in more than 200% Monthly Return on Investment!
In this example, we used average numbers to show you that small adjustments have a huge impact on your bottom line. We did not include quite a few other factors that drive even more ROI. These include:
- Reduced accidents due to improved safety
- Improved customer billing accuracy
- Increased new/return business due to improved customer service
- Insurance discounts due to implementing GPS tracking
- Vehicle theft recovery