Fleet managers must grapple with many ongoing expenses. Fuel and maintenance are the most obvious and often costly of these, but other, less immediately evident factors make a substantial difference, too. While easily overlooked, tolls can cost fleets considerable time and money.
A dedicated toll management process can help reduce these ongoing costs and their impact, but some fleet managers may not know where to begin. Here’s a closer look at these strategies, what they can do and what they should entail.
Why Fleets Need Toll Management
Fleet management may seem like an unnecessary complication at first, but it can offer critical savings for many operations. Truckers paid $4.2 billion in tolls across the 21 major U.S. toll systems in 2018. These expenses are higher than almost all other industry cost-per-mile metrics, with commercial vehicles paying 45 cents per mile in tolls.
Toll management can help avoid these payments in some situations by finding routes with similar delivery times that avoid toll roads. Even when fleets must make these payments, toll management can still help by reducing them.
Many fleets pay more than they need to on tolls, thanks to errors like misclassification and forgoing discount programs. Ongoing expenses could reach unnecessary heights without a dedicated program to manage these factors, and workers may spend too much time trying to minimize them without a standardized process.
Considerations for a Toll Management Program
Toll management programs are crucial for any fleet with high toll costs, but they require careful consideration to deliver on their promise. Here are some things fleet managers must keep in mind when establishing these strategies.
Outsourcing vs. Managing Tolls in-House
One of the biggest questions is whether to handle toll management in-house or outsource it. Managing tolls internally can help reduce dependencies and simplify supply chains, but it’s not always the best option.
In addition to lowering toll costs, third-party toll management services can minimize ongoing expenses through a reduced administrative burden. These solutions significantly reduce the paperwork employees must file, minimizing the time and money fleets would otherwise spend on these tasks.
Third-party toll managers may also be more familiar with benefit programs and other cost-reduction strategies. Large fleets with busy operations hubs stand to gain a lot from this outsourcing. However, these solutions may be unnecessary if a fleet is small enough and doesn’t spend much on tolls.
Fees and Discounts
Fleet managers should also review applicable fees and discounts to see what they can gain from various strategies. Different toll systems take unique approaches to how they charge tolls and what bulk discounts they offer. Consequently, effective toll management often changes between routes.
The E-ZPass program offers a 20% discount for monthly tolls above $3,000 and smaller discounts for other high volumes, but not all roads use this system. Similarly, some roads and bridges raise rates at peak hours, so minimizing these costs may be a matter of timing. Fleet managers must consider all these factors to find the most cost-effective option.
Given how complex these calculations can be, large fleets with routes across the country may want to outsource them. Otherwise, the administrative work involved in finding optimal cost-saving strategies for each trip may outweigh the actual savings.
Location
Where a fleet is and where its routes cross can also impact toll management. Toll roads extend across the nation, but they’re more common in some places than others. Some states, like Arizona, have little to no highway tolls at all, so toll management is unnecessary in fleets confined to these areas.
These locational differences can also provide cost-saving opportunities. In some cases, it may be best to route a truck through an area with little to no tolls than to send it on a more direct but toll-heavy path.
Fleet managers should review their usual routes and nearby alternatives to better understand the expenses they face. If avoiding tolls is relatively easy for their operations, they may not need in-depth toll management. Conversely, a dedicated solution is likely necessary if they face high fees or a wide variety of discount programs.
Violations
Another part of toll management that can go easily overlooked is managing violations. Tolls aren’t the only expenses fleets may encounter when using toll roads. Incorrect billing and failure to pay can also introduce complications and unforeseen costs.
Part of having a reliable toll management strategy is a plan and process to deal with these violations. The best approach can vary depending on the system at hand. Some transponder programs provide an app that makes managing issues fairly easy. The process can be long and complicated in other cases, requiring more care and proactive action from fleet managers.
Managers may want to dispute violations to save money in some circumstances, but this can also be a long process. Having a clear record of everything will help streamline these actions, but it’s also important for managers to pick their battles.
Human Error
Managing tolls is about more than just finding loopholes and understanding how different toll systems work. Fleet managers must also realize how common human error is in these processes and how much it can cost them.
Some companies have paid more than $15,000 in toll overcharges because of mistakes like misclassification. Fleet managers that hope to avoid these costly errors must improve visibility and create standardized processes for toll management. It’s easier to find and fix mistakes when people can see things like how each truck is classified, where transponders are and who does what.
The risk of human error is another reason outsourcing may be ideal for some companies. The more complicated a fleet’s toll considerations are, the better it is to let an expert third party handle them.
Transponder Abuse
Fleet managers must also tackle transponder abuse to make the most of a toll management program. An in-state transponder can reduce toll fees by as much as $2, so it can be tempting for employees to use work transponders in their personal vehicles. An effective toll management strategy includes steps to prevent that.
Roof-mounted or license plate transponders are harder to remove, so they can help prevent abuse. Monitoring invoices closely and comparing them to completed routes will also help, and this requires visibility. Dedicated management software may be necessary to enable that transparency and avoid fraud.
Toll Management Is Crucial for Many Fleets
Tolls are unavoidable in many routes, but that doesn’t mean their cost is inflexible. Toll management strategies and services can help minimize these expenses.
Fleet managers should review their operations and options to see what their toll management strategy should look like. Some will require more in-depth approaches than others, but these strategies can provide crucial help for almost all fleets.
