A company with a 3 000-strong fleet of vehicles, based mainly in Gauteng, this year paid between R400 000 and R500 000 a month extra on its toll fee bill, owing to the start of e-tolling on the Gauteng freeway network at the end of last year, says Standard Bank fleet management head Dr David Molapo.
Some companies operating fleets mainly in Gauteng have seen their toll bills increase by as much as 30% this year.
Molapo notes that 59% of the fleet vehicles under Standard Bank’s management have been registered for e-tolling, and 32% of its customers.
The bank’s fleet customers, however, are not only based in Gauteng.
Molapo says e-tolling introduces added complexity to fleet management, as it requires detailed reporting to monitor spending, and to differentiate between private and business mileage.
He adds there is a lack of appreciation on the magnitude of costs involved, in general, in owning and running a vehicle in South Africa.
A Volkswagen Polo, for example, retails at R224 800, but total cost of ownership over 48 months runs at R318 817, with payments making up 53% of this number, fuel 33%, maintenance 12% and tyres 2%.
Increases in the price of fuel, the biggest single operating expense in fleet management, have seen the average fuel cost per transaction of Standard Bank fleet customers increase from R515 in January 2010, to R890 in April 2014.
This is a 73% increase, pushing the average cost of running a vehicle to more than R4 000 a month.
In the current environment of rapidly rising costs, only fleet managers who increase efficiency will stay afloat, emphasises Molapo.
Although the cost of maintenance has not shot up as sharply as fuel costs, it is still under heavy inflationary pressure.
Standard Bank statistics show that the average maintenance bill for a vehicle currently stands at R3 600, up 26% from 2010.
With all the expenditure associated with large corporate operations, one would expect vehicles in smaller operations to operate more efficiently, but the opposite is true.
Statistics show that large fleets run their vehicles more cost-effectively because they have dedicated and focused fleet managers.
In smaller fleets, where the management of the fleet is not seen as central to the core function of the company, the cost of running the fleet is routinely underestimated, and the fleet management function is often left to junior staff members. As a result, many opportunities for improving fleet performance are missed.
Large fleets are also often equipped and willing to spend money in order to save money, says Molapo.
“The wide range of solutions available to fleet managers require an initial investment, such as driver training, telematics and, crucially, the appointment of dedicated managers who are able to analyse the huge amounts of data generated by fleet management systems and telematics.”