You know you need to automate and manage routes with technology to be more efficient and effective, but how do you build the business case for an investment in the smart truck tools you need?
Oftentimes, pointing to time and associated cost savings can be enough to tip the scales.
With inflation taken into consideration, the real cost to operate a waste collection vehicle in North America is now an estimated $180 per hour. That’s about $3 per minute, meaning that savings of a few minutes per truck, per day can add up quickly.
Here’s a quick example: A fleet of 25 trucks operating six days a week for a year — each saving five minutes a day — will recoup $117,000 in a year. The same fleet saving 10 minutes a day will save $234,000.
For many municipalities and haulers, fleet automation and onboard computers pay for themselves in a matter of months. Such was the case for the City of Lexington, Kentucky, which realized a return on investment in under one year while eliminating 10 trucks from its fleet.
The time-savings formula
Here’s how to calculate the yearly savings to a waste management business by saving one minute per truck, per day:
Number of trucks x Number of operating days per week x 52 weeks in a year x $180 per hour / 60 minutes
Annual time-savings examples
The average hauler using fleet automation tools reports saving about 30 to 60 minutes per route per day. Using the formula, here a few more examples of what annual savings could look like:
$702,000 in savings per year
- 25 trucks
- Operational 6 days per week
- Savings of 30 minutes per day, per truck
Other ways to save
Fleet automation helps haulers shave time off routes, but that’s not the only way they help add to the bottom line. Smart truck tools also provide service verification and reliable documentation of extra collections, increase overall fleet efficiency, collect and report on individual driver behavior to help supervisors coach and reward great team members, and give customer service teams the ability to easily pause service until payment is made.
Eliminating unnecessary go-backs with service verification
Save $175,500 in six months*
Go-backs zap resources. Yet many municipal and private haulers return to residences and businesses after a phone call because they can’t show their customers what was at the curb — or not — the first time a driver stopped to collect.
With service verification and photo and video from the collection point, the customer service team can quickly verify service (or an attempt) and share documentation with customers who call. This allows teams to eliminate go-backs or charge for them.
*Assumptions: Garbage trucks cost an average of $3 per minute to operate. Go-backs per day take 15 minutes on average for a 25-truck fleet operating six days per week.
Recording extras — and charging for them
Save $46,800 in six months*
Without a way to document and charge for extra collections, many municipalities and haulers struggle to get paid for the level of service they provide.
Using paper to record extras is cumbersome for drivers and doesn’t create transparency for customers, who often request evidence of services rendered before paying for them. Smart truck tools help drivers log extras and document them with photo and video, that way customer-facing teams have the evidence they need to help callers understand what they’re being billed for.
*Assumptions: Commonly, extras increase by 300 percent at $2 per extra, per route, with a 25-truck fleet.
Coaching and rewarding great drivers
Save $18,135 every six months*
The driver shortage is real, and waste haulers experience up to 50 percent turnover in the first year of a driver’s employment.
Fleet automation tools help stem the tide by providing supervisors with information that enables them to coach drivers who need help while rewarding top performers.
*Assumptions: Not recruiting/training one driver saves $2,260 to $10,550. If an average 25-truck hauler hires 13 drivers/year, they may expect to lose about six of those drivers — or three drivers every six months.
Effectively stop service until payment is made
Get 75% of delinquent accounts to pay in full*
On average, about 20 percent of customers have unpaid bills. When Waste Management stopped providing service to a group of unpaid accounts, about 75 percent of them (225) paid in full, resulting in $11,250 in increased revenue.
Smart truck tools help by letting drivers know who to skip. Once an account is brought up-to-date, back-office staff can easily ensure that collection resumes in a timely manner.
The bottom line
The business case for fleet automation isn’t all about the numbers: It’s hard to measure customer delight, trust in your organization, and enhanced brand reputation, but they’re all real outcomes of providing enhanced, digital-first service.
Still, the numbers make a compelling case for the investment in smart truck tools: Taken together, a hauler with 25 trucks operating six days a week with 30 drivers could potentially realize over $600,000 in lowered costs and increased revenue the first six months.
Fleet automation no longer just pays for itself: It’s the way forward for municipal solid waste organizations charged with balancing budgets, stewarding taxpayer dollars, and adding value to their communities through responsible resource management. For private haulers, smart truck features support profitability and provide a competitive edge.
Learn more. Speak to one of our representatives to find out how much your organization could save with fleet automation technology. Let’s talk.