The City of New York established its Fleet Federation to consolidate operations and reduce fleet expense. The comprehensive approach delivered on the promise of increased cost efficiency, with savings including $82 million in fleet costs, $187 million in capital costs and $99 million in operating expenses. Government institutions and finance professionals can consider this example and appreciate the many benefits of fleet management.
In 2010, the expense of New York’s fleet stood at an all-time high. The City operates the nation’s largest fleet— more than 25,000 vehicles that deliver needed services like securing streets, collecting garbage and maintaining parks. Fleet operations cost more than $600 million annually, and 10 departments—Police, Fire, Correction, Sanitation, Transportation, Environmental Protection, Parks and Recreation, Education, Health and Human Services, and Citywide Administrative Services—operate more than 90 percent of the vehicles.
The City created an action team, the Fleet Federation, to determine how to generate cost savings without impacting services. The Fleet Federation teamed with the Mayor’s Office of Operations and the 10 departments to review operations and implement changes over the span of five years.
The Fleet Federation was tasked with increasing reporting of metrics on all aspects of the fleet, centralizing fleet management decisions within the Citywide Services Department and decreasing expenses by improving overall cost efficiency.
By treating the fleet as one common resource rather than a dozen operations associated with separate municipal agencies, the Fleet Federation significantly improved the use of City resources. Initiatives included:
New York City’s outcomes represent the kind of efficiencies that can result from fleet management. This example, while achieved by the government’s own finance team, can help any organization consider potential options for reducing fleet costs.
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