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Few organizations retain Mercury with the sole objective of lowering the costs they incur in operating their vehicle and equipment fleet. The ultimate objective of almost every consulting assignment is to enable our clients to achieve the best possible level of vehicle availability, reliability, and performance at the lowest possible cost. But dramatic drop-offs in short-term budgets and in long-term recurring costs virtually always result.

Understanding Cost Distinctions

Mercury’s clients often ask that we help them assess the cost-competitiveness of their fleet operation. We frequently find that fleet managers lack a full understanding of their program’s costs, cost analysis techniques, and the financial management principles that apply to fleet operations. There are many different ways that cost information can be characterized, interpreted, used, or misused.

For example, the following types of costs all accrue in fleet management operations. It is important to Mercury’s consultants that our clients understand the distinctions and similarities among these costs. The distinctions and similarities affect management and customer attitudes toward the fleet operation and can have a profound impact on the organization’s cost competitiveness:

The Fleet Operation’s Financial Structure

Mercury consultants also address the organization’s financial structure when analyzing for cost competitiveness. Key factors we consider include:

An internal service fund, which enables the organization to identify total costs associated with supporting the fleet operation, bring accuracy to overhead cost calculations, and other benefits.

Accurate charge-back rates, which make vehicle users accountable and lead to cost consciousness throughout the organization.

Vehicle management organizations that know their costs and have an appropriate financial structure are always well positioned to justify to decision makers and constituents that they are providing a high level of service at a competitive price.

Mercury Associates, Inc.
Professional Fleet Management Consultants
16051 Comprint Circle
Gaithersburg, MD 20877
301 519 0535 Office
301 519 0536 FAX
email: contactme@mercury-assoc.com

Fleet Management Consulting Services and Business Solutions, Simplified ™

© 2006 Mercury Associates, Inc.