November 14, 2022

Reducing emissions - Turn a green issue into a money issue

Sustainability is an increasingly important factor in how organisations operate. Governments throughout the world are pursuing efforts to mitigate greenhouse gas emissions (120 countries have announced net zero pledges). Consumers are also more aware of their role in making greener choices with products and services. Inevitably, both these factors are influencing the managers and stakeholders within organisations as they seek to keep ahead of government legislation and respond to consumer concerns.

Reducing the sources of CO2 emissions within an organisation is now, or will soon be, on the radars of organisations in New Zealand and Australia. For many, the focus will fall on fleet operations, as vehicles are an obvious target for 'easy' emissions reductions.

Are electric vehicles the only answer?

Often, addressing fleet emissions concentrates on the transition to Electric Vehicles (EVs). And while EVs are absolutely an important piece of the sustainability puzzle, they aren’t the whole story. This is because EVs may not be suitable replacements for certain roles, are generally still more expensive than their ICE (Internal Combustion Engine) counterparts and are in short supply due to the impact of COVID-19 and the microprocessor shortage.

Given these hurdles, some Fleet Managers could be forgiven for thinking that a more sustainable fleet is beyond them at the moment, but that isn’t the case. Reducing your fleet’s emissions doesn’t have to be an all-or-nothing approach where EVs are the only answer. By reframing the discussion of reducing emissions to one around improving productivity, you’ll quickly see that there are likely a range of ‘quick wins’ that your organisation can action right now.

The approach of improving productivity to simultaneously improve your bottom line and reduce emissions is the win-win strategy that helps the organisation and the planet.

Why are we talking about productivity?

It might seem counterintuitive to be talking about productivity when the outcome we’re after is one of sustainability and reducing emissions. But this isn’t the case at all. When we talk about productivity, we’re referring to your fleet’s ability to meet your organisation’s operational requirements. This is measured against the various inputs required (vehicles, employees, running costs, etc.) and the outcomes achieved for that input. Therefore, if you can meet your operational demands while reducing the inputs required (vehicles and fuel), you are creating the conditions for productivity improvement alongside reductions in emissions.

Improving productivity. Reducing emissions

Naturally, there will be multiple factors unique to your situation that determine exactly what you can do, but the overall strategy is still the same:

  1. Lift fleet management to a level where waste is reduced
  2. Interrogate current vehicle use
  3. Generate savings that can be re-invested back in the fleet to finance the adoption of EVs and/or hybrids

Organisations that have followed this strategy have experienced similar evolutions in productivity and sustainability, with gains generating a cycle of ongoing improvement.

The two stages of emissions reduction, as a consequence of improved fleet management

Immediate outcomes

The first set of productivity outcomes related to reducing emissions centre on reducing fuel by managing various factors that are within your control. Fuel reductions can be realised by tackling harsh driving, speeding, and excessive idling. This can be achieved by using GPS tracking to monitor driving behaviours and the reporting that’s generated to educate drivers.

In addition to addressing driver behaviours, you should also look at operations to ensure efficiencies are maximised. By implementing geofences you will be able to accurately identify a range of aspects. This will include knowing when a vehicle is actually in use (left home base) and how long it’s at an off-site task (worksite or customer’s location). This information will help you to judge whether vehicles are being productively utilised, and whether there are opportunities to rationalise fleet size.

The reporting data on vehicle trips is also valuable as it highlights opportunities to improve task scheduling. Is excessive speeding a result of poor scheduling, are vehicles getting caught up in rush-hour traffic, will trip reporting and geofence information combine to drive further efficiencies? There is also the benefit of understanding whether a trip is really necessary and if a video conference call would have sufficed.

These insights, together with real-time tracking of vehicles will result in the leaner, more agile fleet that delivers productivity gains and savings.

Secondary outcomes

Tackling fuel-intensive behaviours and bringing in more efficient journey and task management reduces fuel costs and improves overall vehicle utilisation. This leads to a second set of productivity outcomes when the savings generated are re-invested in EVs or more fuel-efficient vehicles such as hybrids. This starts the cycle of capitalising on the work you have already done.

You could be tempted to leave it at that, but there is more your greener fleet could be doing by using the thinking that’s been driving the growth of the sharing economy. Consider alternative transport options such as electric bikes or scooters, and whether including public transport is a viable offering to employees for certain trips.

These strategies will enable a shift away from a vehicle-centric fleet and ensure that vehicles are utilised as the appropriate mode for a particular trip rather than being the default option. This may sound like a move too far from a conventional fleet but there are organisations that have already made just this type of transition. An energy supplier in Belgium, Luminus, offers its 2,000 employees transport options that include taxis, scooters, shared cars, and public transport.

It's also worth noting that we have arrived at this point by focusing on productivity improvement; your fleet is on the verge of becoming a ‘future fleet’ simply by mastering skills that are really core fleet management capabilities.

What can you do today?

Right-size your fleet: Do you know if you have too many vehicles? Are you keeping excess vehicles in your fleet to cater for the rare occasions when you hit peak demand?

Right-shape your fleet: Do you know for certain that the vehicles in your fleet are being used for the right purpose? GPS tracking can answer whether the expensive 4WDs and SUVs are only being driven in urban areas and can be replaced by more efficient sedans or hatchbacks.

Reduce or eliminate unnecessary travel: Can the meeting be done virtually, or resolved in an email or Microsoft Teams chat?

Increase fuel efficiency: Monitor driver behaviour and keep on top of maintenance.

Use alternative modes of transport: Could employees take advantage of public transport or rideshare services like Uber? Rideshare should certainly be on your radar an easy way to satisfy peak demand.

Real-world examples

Saint Vincent’s Health in Sydney reduced the fleet’s vehicle count by 20 with no adverse impact on operational capability. They did this by bringing in fleet management tools that included an integrated key management system and an online booking solution for the 400 users of the pooled fleet. This was especially important as it provided 24/7 access

New Zealand’s Plunket organisation which looks after pregnant women and provides early childhood care used the insights provided by Smartrak to reallocate vehicle resources more efficiently. This allowed Plunket to reduce the number of vehicles in the fleet while supporting growing staff numbers and providing services to more clients.

Ready to start turning a green issue into a money issue? Get in touch with Smartrak today to start reducing emissions and improve your fleet's productivity.

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