Does your business rely on vehicles to serve its customers? If it does, then fleet management is something you should care about.
We’re not picky about what a “fleet” means, either. A fleet could mean just a few company vehicles. Or it could be thousands of automobiles operating under one business.
Managing fleet vehicles can get complicated fast. Without a plan, you risk compromising your vehicles’ efficiency and productivity.
In this article, we’ll talk about fleet management, its benefits, and some best practices. We’ll also explain how you can develop your own fleet management plan.
Let’s get started with the basics.
What Is Fleet Management?
Fleet management is the process of overseeing and optimizing the efficiency of a fleet of vehicles. It’s a broad term encompassing several different activities.
Here are some examples of common fleet management practices:
Fleet management starts with acquiring the vehicles themselves.
This can be done in bulk purchases or incrementally as fleet demands grow. The important thing is to determine the type of vehicle you need to serve your specific purpose.
Base your purchase strategy on the way your company will be using your vehicles. You’ll also want to consider other important factors, such as the vehicle’s running costs, durability, resale/replacement value, and safety rating.
Vehicle trackers tell you where each vehicle in your fleet is at any given moment.
Tracking devices use GPS systems to triangulate the vehicles’ locations and log their movements.
Basically, you get real-time and historical data on each vehicle’s whereabouts. Some advanced trackers can monitor the vehicle’s health and performance as well.
Vehicle tracking is an essential fleet security feature.
In fact, most trackers give you some level of remote control over the vehicle. For instance, the system can warn the driver or shut down a vehicle if it veers off course or overloads with cargo.
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Dispatch and Route Management
Dispatching vehicles and planning their routes are crucial parts of fleet management.
The goal is to optimize your fleet vehicles’ movements and schedules for maximum efficiency. It generally comes down to picking the ideal vehicle routes, cargo, and departure times.
With the ever-rising cost of fuel, minimizing your fleet’s fuel consumption is a must.
Modern vehicle telemetric systems can give you valuable insight into each vehicle’s fuel efficiency. These systems mostly analyze driver behavior and the vehicle’s performance. Then, it converts various data points into a miles per gallon (mpg) value.
Here’s some of the data a telemetric system will use to calculate a vehicle’s fuel efficiency:
- Fuel stops
- Engine exhaust quality
- Braking frequency
Driver Safety and Behavior Monitoring
Did you know that human error is the cause of most road accidents?
According to the General Services Administration, 98% of car accidents are caused by human error.
That’s why, to ensure the safety of your fleet and crew, you must train your drivers and observe their behavior on the road.
Vehicle vigilance systems and other driver monitoring tools can help you identify risky driver behavior within your fleet. Such behavior could include multitasking, texting, falling asleep, or dangerous overtaking.
Safety is a top priority in fleet management. And it begins with whoever sits behind the wheel.
Just like any equipment, taking care of your company vehicles is crucial. Proper vehicle maintenance ensures your fleet’s longevity, safety, and efficiency.
Most companies outsource vehicle repair, routine maintenance, and upgrades to third-party mechanics. This is usually cheaper and far more convenient than hiring full-time mechanics.
But for large fleets, it might make more sense to have an on-site workshop. Especially if you’re operating in the commercial transport sector.
Vehicle rotation can mean one of two things:
- Distributing vehicle use evenly throughout your fleet
- Replacing older vehicles when they’re nearing the end of their economic life
Rotation aims to keep the fleet vehicles as “new” as possible. This helps you reduce maintenance costs and optimize fleet performance.
Your ideal rotation schedule will depend on the type of vehicles you use and how often you use them.
The economic side of fleet management deals with the financial aspects of your fleet. These include things like general operational efficiency, costs, and gains.
To evaluate your fleet’s economic efficiency, you’ll need to calculate the expenditure vs. profits and acquisition cost vs. lifetime value. This gives you an idea of the fleet’s worth to your company.
Safety and Compliance Management
The Federal Motor Carrier Safety Administration (FMCSA) enforces various standards for all commercial/fleet vehicles. The standards are generally centered around vehicle, driver, and road safety.
Compliance with U.S. fleet regulation is a continuous process. It requires you to do things like
- Document various fleet activities
- Maintain a conducive work environment for drivers
- Check emissions and energy usage
- Ensure vehicle and driver health
If you don’t comply, you can be subject to heavy fines and other penalties.
Why You Need Fleet Management
So, why does fleet management matter anyway? Aside from avoiding those annoying fines we just talked about.
Well, to get the most out of your commercial vehicles, you must ensure that the entire fleet runs efficiently as a unit. Fleet management entails all the administrative practices necessary to do this.
Here are the top benefits of fleet management:
- Improves driver and road safety
- Optimizes fleet operations (on-time deliveries, optimal routes, fast dispatch, etc.)
- Helps reduce fleet costs while boosting profits
- Enhances overall visibility into fleet activities
- Generates important compliance data
- Stretches the vehicles’ lifespan
- Improves fleet security by discouraging theft, fraud, and vandalism
- Helps lower fleet emissions and fuel consumption
- Enhances work experience for the fleet crew
- Ultimately improves customer satisfaction
5 Vehicle Fleet Management Best Practices
Okay, okay—you get it. Fleet management is important for the success of your business.
But how do you go about it?
Let’s look at what it takes to properly manage a fleet of commercial vehicles.
1. Develop a Solid Fleet Management Plan
Every bit of business management starts with a plan.
A good fleet management plan will be your roadmap for making fleet-related decisions. It should also outline what’s needed to run your fleet safely and profitably.
Here’s a quick step-by-step guide to creating a successful fleet management plan:
Step 1: Review Your Current Fleet Assets
Start by assessing your existing fleet. Catalog all your vehicles based on features such as purpose, hauling capacity, fuel consumption, etc.
This should give you a bird’s-eye view of what you’re working with.
Step 2: Set Your Fleet Management Goals
What exactly do you want to get from your fleet?
Perhaps you’re struggling with driver accountability. Or maybe your profit margins are dwindling. You could be dealing with security issues or not having enough vehicles.
Set realistic goals to solve these problems and improve your fleet operations.
Step 3: Run the Numbers
Achieving your fleet management goals can sometimes be costly upfront.
You may need to increase the number of vehicles you have. Or update your existing vehicles with modern fleet management solutions. Some goals may even require you to overhaul your entire fleet.
Run a reality check on your goals and propositions from an economic standpoint.
Start by making a list of actionable priorities based on what’s economically possible. Make a list of both short-term and long-term priorities.
Step 4: Draft Strong Fleet Management Policies
Once you know what you need to do to improve your fleet, you can begin to execute.
Create and enforce fleet management policies that address all your fleet issues. Your practices should also help you get closer to achieving your goals.
Ensure the policies cover all the bases. This includes everything from the drivers’ responsibilities to safety compliance.
Step 5: Get Everyone on Board
The final step in putting your fleet management plan in place is to get your team on board.
Explain your plan to other decision-makers and those involved in fleet operations. Be sure to share your fleet goals, so they can help you refine your plan to meet them.
Getting all the drivers, supervisors, and managers on board with the new fleet management policies makes for frictionless execution.
2. Go Digital
Digital solutions save time and money in many areas of business operation. And vehicle fleet management is one of them.
Ditch the outdated spreadsheets and punch cards for modern fleet management software tools. Automating your route planning, dispatch processes, and scheduling will drastically simplify your fleet management practices.
Plus, you’ll minimize errors and gain access to valuable fleet data. This data will help you further improve your management style.
There are countless fleet management systems in today’s software market. Premium fleet management platforms can seamlessly automate and centralize all your fleet operations.
Here are some examples of top vehicle fleet management platforms:
3. Screen Your Drivers
Until fully autonomous vehicles hit the road, drivers will remain essential to your fleet.
But you can’t trust such a significant part of your business to just anybody with a driver’s license. It takes more than driving qualifications to become a good fleet driver.
In addition to having a valid driver’s license, each driver must be a perfect fit for your fleet and company.
Check each candidate’s industry experience level and work history. Evaluate their soft skills, too, such as their capacity to work in teams and under minimal supervision.
4. Consider Appointing a Dedicated Fleet Manager
As your fleet grows, managing it will likely get more complicated and time-consuming.
That’s okay for business owners who can handle the increasing workload. However, the problem arises when fleet management begins eating into your other business activities or personal time.
If fleet management becomes a burden, consider hiring or appointing a fleet manager. Fleet managers assume all fleet management responsibilities. This frees you and your team to focus on other business processes.
And since they’re experts in the field, a fleet manager may also help solve your fleet’s thorniest pain points.
5. Measure Your Fleet’s Success
It’s important to continuously measure your fleet’s performance. The best way to do that? By analyzing your fleet data.
Looking at cold, hard data is the only way to tell whether your fleet management methods are leading you to your goals. Track key data points such as expenses, income, vehicle health, and driver/customer experience.
These insights will help you understand how well your fleet management is doing.
Here are 10 important key performance indicators (KPIs) worth tracking:
- Adherence to the fleet’s budget
- The vehicles’ return on investment (ROI)
- The nature and number of safety incidents
- Vehicle utilization figures
- Total fleet downtime vs. uptime
- Fuel consumption and fueling costs
- Level of compliance with regulatory, safety, and industrial standards
- Customer trust and confidence
- Driver competency levels
- Scheduling and routing performance (timely and mint deliveries, mileage, working hours, etc.)
The point of tracking these metrics is to help improve your fleet management plan.
Since fleet management is a continuous process, you must be evaluating and refining your plan constantly.
Get Started with Proper Fleet Management
How well you manage your vehicle fleet can truly make or break your business.
But if you follow our vehicle fleet best management practices, you can be sure your fleet will deliver the results you need.
Here are a few things you can do right now to get started optimizing your company fleet:
- List your fleet goals. If you don’t know what you want for your fleet, it’ll be hard to evaluate it. Make a list of short and long-term goals for your company’s fleet. This will give you a benchmark for where your fleet efficiency is now and where you need it to go.
- Compare your goals to your current fleet. Now you know what you want to accomplish with your fleet. That means you’re ready to assess whether your vehicles are there, or you need to make some changes.
- Identify what it will take to achieve your goals. Goals decided? Check. Current fleet evaluated? Check. Now, you can determine what needs to be done to achieve those goals you listed. Starting with a rough list of action items will help you put together an effective fleet management plan.