Fleet size optimisation: the underutilisation problem
Fleet size optimisation: the underutilisation problem
The instinctive response to service delivery pressure in fleet operations is fleet expansion.
The data-supported response is utilisation measurement first.
Frost & Sullivan’s analysis of commercial fleet operations in emerging markets, published in 2023, found that the average fleet in their study population was carrying 22% more vehicles than its measured operational demand required — because utilisation had never been formally assessed before procurement decisions were made.
The utilisation benchmark framework
| Fleet type | Utilisation rate |
|---|---|
| Well-managed commercial fleets | 72–85% |
| Industry average | 54–62% |
| Unmonitored fleets (no telematics) | 38–52% |
For a typical medium commercial vehicle with $40,000 in annual total cost of ownership, operating at 40% utilisation rather than the 75% benchmark means paying $40,000 for the productive output of a 40% utilisation vehicle when a well-managed equivalent produces 87.5% more output at the same cost.
The FMASA study found that in 60% of fleet rationalisation exercises — where utilisation was formally measured for the first time — the existing fleet could meet operational demand with fewer vehicles, not more. The average reduction identified: 17% of fleet size.
On a 60-vehicle fleet with $40,000 average annual cost per vehicle, a 17% reduction represents 10 vehicles and $400,000 per year — from measurement, not from purchasing.
The business case for a new vehicle should begin with one question: what is the current utilisation rate of the existing fleet, and where specifically is it insufficient?
Sources
Frost & Sullivan Emerging Market Fleet Management Research (2023); Fleet Management Association of Southern Africa Utilisation Benchmarking Study (2023).
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