Fleet sizing & mix

A company that runs its own deliveries has to decide how many vehicles to keep, of which sizes, and how many to hire when needed. Too few, and orders wait or expensive market trucks fill the gap. Too many, and vehicles sit idle while their EMIs, insurance and drivers’ wages keep running.

The usual answer is to own or lease for the base load and hire for the peaks. If a distributor needs 20 trucks on a normal day but 32 during the festive season, owning 32 means 12 trucks idle most of the year. Owning about 20 and hiring market vehicles for the peak usually costs less, provided hired capacity is reliably available when everyone else needs it too.

The mix matters as much as the count. Small vans move easily through narrow city lanes and suit small drops; big trucks are cheaper per tonne on long hauls but waste space on light loads. Matching vehicle size to route type, such as two-wheelers for quick commerce, small vans for kirana routes and 20-foot trucks for warehouse transfers, cuts cost per drop.

Fleet sizing is usually worked out by simulating routes over a typical year, day by day, with different fleet sizes and mixes, then comparing:

cost of owned vehicles (capital, insurance, maintenance, drivers) + cost of hired vehicles for overflow + cost of late or missed deliveries

Two numbers tell you whether the fleet fits: utilization (how many hours or kilometres each vehicle actually works) and cost per drop or per tonne-km.

The own-or-hire break-even

Owned vehicles carry fixed costs whether they move or not; hired vehicles cost more per day but only when used.

The demand curve tells you how many to own

Rank the days of the year by how many trucks are needed. Each additional owned truck is used only on the days demand exceeds the trucks already owned. Keep adding trucks while the next one would still work more days than the break-even; hire beyond that.

Matching the mix to the routes

The peak is when hiring is hardest

Everyone needs extra trucks at the same time, during festive seasons, harvests and sale events, so market rates jump and availability drops just when the plan depends on hiring. Ways to secure peak capacity:

• Seasonal contracts with transporters, agreed months ahead.
• Dedicated fleets from a 3PL, with guaranteed vehicles for an agreed period.
• Flattening the peak: moving some deliveries earlier, building stock at regional warehouses before the season.

Electric fleets

Electric vans and two-wheelers have higher purchase prices but lower running costs (energy and maintenance), which makes them attractive for predictable, high-mileage urban routes with depot charging. The comparison is a total cost of ownership over the vehicle’s life, including charging infrastructure, range limits, battery life and resale value, plus any incentives. Long-haul electric trucks are at an earlier stage.

Telematics and utilization

GPS and vehicle data show how many hours and kilometres each vehicle actually works, idle time, fuel use and driving behaviour. Utilization data often reveals that a fleet is larger than needed on most days, or that some vehicles sit idle while others are overloaded. Better dispatching can then cut fleet size without hurting service.

When to replace a vehicle

As vehicles age, ownership cost per year falls (depreciation is spread) but operating costs rise (repairs, fuel, breakdowns). The economic life is the age at which the average annual total cost is lowest. Replacing on a fixed calendar, or running vehicles until they fail, both miss it.

Drivers

Fleet capacity is also driver capacity. Driver shortages, long hours away from home and safety concerns limit how many vehicles can actually run, especially in peaks. Better working conditions, relay operations (drivers swapping at midpoints so they return home) and planned rest raise both availability and safety.