Two urgent cost pressures confronted this large, American energy company in spring 2020: the global oil price war followed immediately by the global pandemic. This forced the company into emergency mode, needing to rightsize their fleet strategically to fit the sudden change in business environment. After conferring with the field, a goal was set. For the following 12 months, the fleet needed to cut their fleet size and total fleet spending 25%, and to reduce monthly spending 10% for each remaining vehicle.
Finding savings in the details
The client and Wheels started by identifying which vehicles were underutilized. A search for pickups that had used less than 45 gallons of fuel in the prior three months resulted in over 40 being sent to auction.
Wheels Remarketing then analyzed book value vs. fair market value for all remaining vehicles. By analyzing sales from the previous three years, Wheels found that 3/4-ton trucks cost $0.11 more per mile to operate than smaller 1/2-ton units. Twenty-three of the 3/4-ton units were sold. The remainder of the reduction came from 1/2-ton pickups with high mileage and positive equity, most through the Wheels auction network to take advantage of soaring used truck prices.
Every goal exceeded
By the target date of May 2021, the fleet was downsized 25.5%. Its total spend was reduced 27%. And monthly spending per truck was reduced by 10.5%. Through meticulous attention to detail, the company and Wheels utilized thoughtful fleet management tactics to better align their fleet to the new business environment.