Fleet News

Pay by delivery time’ model, will it work for your business?

By looking at your individual customer needs, a fleet can gain great insight into its clients’ business.  If a fleet then understands what drives its customers and is aware of the situations and issues that they look to avoid, a fleet management company can add great value to its full range of clientele, big and small, and ultimately look to better manage its own operations and increase profit margins too.

For example, if a fleet company delivers goods to a customer on a daily basis during peak hours, should they pay the same for the use of your fleet as a client that is happy to receive goods at a non-peak time of the day?

Understandably, a fleet that is operating during peak hours and looking to deliver on behalf of a client during rush hour will face increased fuel costs and more time on the road.  As such, many would argue that the customer should pay more for delivery in these peak periods but perhaps struggle to open such conversations with long standing existing relationships. 

To date, it has been difficult to gain clear intelligence into estimated road traffic throughout the day, but technological developments and more advanced traffic solutions are in a place to allow fleet management companies to develop flexible payment models for their customers.  We are now entering an age where fleet management companies can take the delivery time and preferred journey route into detailed consideration ahead of providing a cost against the requirement.

By offering customers flexible payment options, and cheaper estimates for more cost efficient deliveries later in the day for example, it could be argued that a percentage of peak hour road congestion could be relieved.  If cost estimates directly mirror the behaviour on the roads, it would be safe to say that many customers would be open to discussions about reducing their outgoings.

What’s in it for the fleet management company?

By taking control of the situation and offering transparent pricing to your customers, fleets are likely to experience a shift in their working day, perhaps shifting the hours that their fleet are on the road.  By doing this, a fleet could expect to experience a reduction in its overheads, reduce time on the road and perhaps even free up more time to take on additional projects on smaller scale deliveries for local deliveries in conventional ‘busy periods’.

To summarise, some companies will always have peak time requirements, and that is understandable, but greater insight to the cost implications to both the fleet and the customer offer smarter planning and pricing discussions.  If nothing else, ensure that you have a good understanding of the implications, whether you are managing a fleet, making a request for a delivery or thinking about operating at different times of the day.

For more information on the traffic solutions that INRIX provides fleets, please visit: http://www.inrix.com/fleet.asp

Author: Hans-Hendrik Puvogel, General Manager, INRIX Europe

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