How to Pay for Fleet Automation in 180 Days




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How to Pay for Fleet Automation in 180 Days

How to Pay for Fleet Automation in 180 Days man using computer with gantt chart of business plan Routeware

Justifying the cost of a fleet automation solution to business stakeholders can be a challenge. Though Routeware provides an ROI calculator customized to every company and municipality we work with, sometimes it’s just easiest to show you the money. In the simplest terms possible, here is how to pay for a new fleet automation solution within your first 180 days of using it:

  1. Reduce vehicle time on the road by providing photo documentation of what was out at the curb – or not – when Customers call in requesting a go-back. Since a garbage truck costs, on average, $1.67 per minute to run, companies can easily save by eliminating unnecessary go-backs. Assuming per route per day go-backs took around 15 minutes on average for a 25-truck fleet running 6 days a week, a company could, just by keeping their trucks off the road, realize a Savings of $97,500 in 180 days.
  2. Use fleet automation software (instead of cumbersome and easily-misplaced paper documentation) to record extras with your pickups. Assuming a 3x logging increase in extras at $2 per extra (not uncommon for our Customers) per route, the same 25-truck hauler could see Additional revenue from logged extras: $6/truck/day, adding up to $46,800 in 180 days.
  3. Find efficiencies in your fleet by increasing service time and decreasing breaks, timers, and landfill time. The easiest way to see a driver’s day at-a-glance is with Routeware DPO, our Big Data application that identifies operational inefficiencies…and what to do about them. Additional revenue from 5 mins/day of increased service time for a 25-truck fleet: $11/truck/day, adding up to $37,050 in 180 days.
  4. Stop serving customers that didn’t pay by having accurate, up-to-the-moment information in the cab and available to the driver so s/he knows to skip the pickup. Since up to 20% of customers may have unpaid bills, that is lost revenue that may not be fully recognized if the drivers are still picking up. By having fleet automation software in the cab that displays the customer’s status and enforces a skip, waste haulers can signal to their customers that it’s time to pay or suffer a missed collection. When Waste Management began enforcing this, they found that 75% of their delinquent customers were prompted to pay their bills in full. In the above example for Waste Management, with 225 customers paying their bills current, the minimum realized revenues were about $11,250 after a single delinquent billing cycle. Minimum increased revenue from stopping collections and prompting bill payment: $11,250
  5. Coach your struggling drivers and reward your best drivers to stay employer of choice during the industry-wide driver shortage. Calculating the savings from not having to recruit and train driver replacements works out to around $2,260-$10,550 per driver (adjusted to today’s dollars). With waste haulers experiencing up to a 50% turnover rate in the first year of a driver’s employment, the costs of replacing drivers can quickly add up. In our example above, assuming a 25-truck operation hires 13 drivers, within 1 year they can expect to lose 6 of those drivers (or 3 drivers every 6 months). Average savings not having to recruit 3 drivers in a 6-month period: $6,405 per driver, or $18,135 every 6 months.

The Bottom Line

Adding all these numbers together, a hauling operation with 25 trucks running 6 days a week, with 30 drivers, can see a total of:

  1. $97,500 saved by eliminating 15 mins/route/day for go-backs
  2. $46,800 additional revenue from a 4x increase in logged extras
  3. $37,050 additional revenue from 5 more minutes of service time/truck/day
  4. $11,250 by skipping pickups for 25% of your non-paying customers, prompting 75% of them to pay up
  5. $18,135 saved from not having to recruit drivers

TOTAL = $95,100 in additional revenue, and $115,635 in savings realized in the first 6 months/180 days.

If fleet automation solution software works out to less than $421,470 in the first year of ownership, then it’s easy to see how the software pays for itself.

Want to see the specific calculations for your unique business? Let Routeware take you through our customized ROI calculator so we can literally show you the money. Give us a call at 1-877-906-8550 to set up your appointment now.

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