Victorian Government Could Slash Fleet Costs By $20 Million Per Annum

Victorian Government could slash fleet costs by $20 million per annum

Melbourne: The Victorian Government could slash its fleet operating costs by $20 million and release more than $200 million in capital simply by optimising management of its 8800 - strong vehicle fleet.

Adam Trevaskus, Director of Sales & Marketing at leading fleet solutions company FleetPartners, said that by adopting industry-best practice the Government could potentially save Victorian tax payers $20 million a year in fleet operating costs.

The comments follow a damning report by the Victorian Auditor-General into the Victorian Government's management of its vehicle fleet valued at $200 million-plus. The report found that control systems were completely missing, agency fleet data was limited and lacked detail with four out of the five agencies reviewed not monitoring and reporting on all their fleet costs.

"The Auditor-General's report reveals a range of issues with Government management of fleets as well as significant opportunities for improvement.

"By considering alternative funding methods rather than owning fleet vehicles, the five agencies named in the study could release around $215 million worth of capital tied up in a depreciating asset money that could be used instead to retire debt, improve social services or cut taxes.

In addition, better vehicle selection and management of Government fleets could slash fuel costs and reduce CO2 emissions, Mr Trevaskus said, and could increase annual savings beyond $20 million.

"Releasing the capital tied up in these fleets is just the first step. It is also possible to significantly reduce operating cost through more efficient funding methods, better choice of vehicles and more strategic management practices. The net result is a highly optimised fleet that is cheaper to run, better for the environment and that more closely aligns with the needs of employees and the state," Mr Trevaskus said.

Mr Trevaskus said private business was already moving to strategic fleet management practices, but the Auditor General's report indicated that the Government had been slower to adapt to the new environment.

"This report highlights a growing gap between the performance of private versus Government fleets."

"The tightening economic market has forced the private sector to look carefully at their costs and adopt more strategic management practices for large assets such as fleets."

"Of particular concern is the finding that none of the agencies reviewed had a comprehensive suite of relevant performance indicators with appropriate targets against which to assess the costeffectiveness of their fleet management. Moreover none could demonstrate, where applicable, that they monitored compliance with vehicle use or fuel policies."

Mr Trevaskus said even small steps could make a big impact on fleet costs and emissions.

"There are a range of things Government fleet managers could consider in order to reduce costs, including switching to more efficient vehicles, better asset management, improved supply chain strategies and even driver training."

"It is a case of small changes can lead to big improvements," Mr Trevaskus said.

Mr Trevaskus said Government departments could benefit greatly from increased collaboration with the private sector.

This year FleetPartners unveiled a new and unique fleet diagnostic tool, as a result of a joint collaboration with accountancy firm Deloitte. An Australian first, the Fleet Optimiser model enables fleet operators and owners to benchmark their fleet performance, identify potential cost savings and areas for improvement.

"Fleet Optimiser operates a bit like a fleet health check. It gives you the confidence to continue those things you are doing right and maybe even enhance them, whilst also identifying factors that can improve your efficiency," Mr Trevaskus said.

"We have assisted our clients in achieving significant savings and operational benefits, by using Fleet Optimiser to understand and build a strategy around their fleets. By applying the right strategic framework supported by the right strategic tools, all the issues identified with the Victorian Government fleet by the Victorian Auditor-General could be addressed and a balance between cost, choice and responsibility could be achieved."

For further information contact:
Genevieve Brannigan
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T: (03) 9642 4107
M: 0411 037 109
E: [email protected]

Julie Guest
FleetPartners
P 03 8416 5470
F 03 8416 5303
M 0412 172 747


SOURCE: Fleet Partners