Owning a fleet of commercial vehicles is more than just keeping them gassed up and maintained. Like any other business asset, your vehicles are a contributor to your bottom line – perhaps by a significant margin. That means you need to know how to manage your fleet to reduce costs, maximize efficiencies, and ensure compliance with all the regulations you may be subject to.
As your fleet expands, the study and implementation of these effective fleet management practices becomes more and more crucial. But what exactly is fleet management? Who does the managing, anyway? And what are some common fleet management KPIs?
If you find yourself asking yourself these types of questions, you’ve come to the right place. In order to create the definitive fleet management guide, we’ve compiled all our research regarding the how, what, and why of owning and operating multiple commercial vehicles. With the right tools, you’ll be well on your way to making the most out of your entire fleet.
- What is Fleet Management?
- Who Manages a Fleet of Vehicles?
- What Does a Fleet Manager Do?
- Benefits of Fleet Management
- What Is Fleet Management Software?
- What Are the Most Important Fleet Management KPIs?
What Is Fleet Management?
Fleet management is an umbrella term that encapsulates all aspects of owning, maintaining, and operating vehicles in use for business. It doesn’t matter whether you own a pest control company with two small vans or a construction firm running a fleet of 100 heavy-duty trucks – when it comes to keeping your vehicles compliant with local laws and running in good condition, it’s imperative to have a comprehensive fleet management plan in place.
Who Manages a Fleet of Vehicles?
If a company has more than a few vehicles to look after, they typically employ a dedicated fleet manager. These managers are logistics experts and software pros – using an arsenal of the latest digital tools, they ensure the commercial fleet is maintained, compliant, and always at the ready. They also have to be staffing extraordinaires, as companies usually rely on fleet managers to hire and train a full roster of qualified drivers and operators.
What Does a Fleet Manager Do?
The fleet manager has a number of responsibilities, nearly all of which fall into one of four main buckets: compliance, maintenance, staffing, and tracking. Consider this quartet of subsets like a four-legged stool – take one leg away and the whole thing quickly topples over. It’s no exaggeration to say that these factors alone can ultimately determine the legality and effectiveness of your fleet. Let’s consider a fleet manager’s core responsibilities in more detail:
Fleet maintenance is exactly what it sounds like: the regular servicing of all your company’s vehicles. It’s important to note here that this kind of planned maintenance isn’t about chasing down and repairing existing mechanical issues; it’s about following the factory-recommended service intervals and taking a preventative rather than a reactionary approach to mechanical upkeep.
As a business acquires new trucks, tractors, and other four-wheeled machinery, the fleet manager must stay atop oil changes, safety inspections, and other recurring maintenance procedures for all vehicles, regardless of where they’re at in their life cycle. This might sound easy enough, but keeping up with and scheduling servicing for dozens or more vehicles – especially when they’re needed on the road every day – quickly becomes a challenging responsibility.
Depending on your home state, area of service, fleet type, industry, and other factors, your company may be subject to various regulatory standards, such as FMCSA, NHTSA, and similar regulations. For example, vehicles and trailers meeting certain criteria are required to be labeled with data plates or rating plates that indicate the gross vehicle weight rating (GVWR), the gross axle weight rating (GAWR), and gross combination weight rating (GCWR). These rating plates must be made of durable materials, such as Metalphoto® anodized aluminum, and contain specific details to identify the vehicle and its specifications.
Fleet managers must stay up to date with all the most recent laws and governance while also ensuring their vehicles – and drivers – are compliant at all times. Failing to establish the protocols and procedures required for compliance purposes can lead to pricey fines and even pricier downtime periods.
Another major component of fleet management is vehicle tracking. Not only does fleet telematics provide real-time location and travel data, but it can also shed light on fuel usage, vehicle downtime, driver performance, and other metrics. All this data can then be used to further streamline your operations, modify routes, or even determine the most effective scheduling options for drivers and deliveries.
This data also helps fleet managers with another key task – purchasing new vehicles. Vehicles are a major investment. A used, light-duty commercial truck will run in the tens of thousands of dollars, while larger, more specialized models may cost six figures, even pre-owned. Knowing when to pull the trigger on a purchase is an essential skill.
The best way to feel confident about such an expenditure? Let data guide the decision. Managers can use their extensive cache of vehicular data to determine – with a high degree of accuracy – when it’s time to buy. Alternatively, a fleet manager can decide to sell a vehicle that is no longer needed, past its useful life, too expensive to maintain, or otherwise obsolete.
The final element – and perhaps the most critical – is staffing. After all, who’s going to drive your fleet of trucks if you have no trained and qualified individuals you can trust behind the wheel? And with a significant trucker shortage persisting across all industries, staffing has become more critical than ever. If a fleet manager can find a way to recruit and retain top talent, it could mean all the difference between expansion and frustrating stagnation.
The other component of staffing is training. In nearly all states, vehicles of a certain size and weight class require specialized licenses and continued training and certification. Ensuring the drivers piloting these larger vehicles are legally qualified falls under the purview of the fleet manager. This could mean arranging training, documenting certifications, or even limiting vehicle access to only those who meet the qualification criteria.
Benefits of Fleet Management
There’s a long list of benefits that can result from effective fleet management plans. Some of the most compelling reasons, however, include enhancing employee safety, reducing operating costs and revenue losses, and improving customer service through more accurate travel estimations and more efficient routes. Here’s a closer look at each of these factors:
Enhancing Employee Safety
Employee health and safety isn’t simply limited to fleet management – it’s an overarching goal across every facet of your organization. Of course, with the nature of motorized vehicles, fleet managers are likely thinking about this topic more often than most. Luckily, proper management of a fleet can go a long way in reducing the risk of injury to drivers or others. The solution is twofold: regular maintenance and sufficient training.
Let’s start with maintenance. When your vehicles aren’t up to date with servicing, there’s a greater chance of a mechanical failure while an employee is behind the wheel. What if you put off replacing the pads and rotors in a company truck and the brakes fail? What if a brittle hydraulic line or aging tire blows out on the highway? You can minimize your risk of dealing with these kinds of unfortunate occurrences by scheduling regular maintenance. If you’re replacing tires before they dry rot, and changing brakes before the pads wear thin, you’ll reduce the likelihood of a sudden failure, thereby protecting drivers and others from undue harm.
The other piece to driver safety is training. Like any other equipment, it’s imperative that drivers and vehicle operators continue to illustrate and certify their understanding of the machines they’re operating. This type of continuous training will reinforce best practices, ensure compliance, and, most crucially, reduce the risk of letting an unauthorized, untrained driver behind the wheel. By using training as an internal control, you can improve both driver safety and compliance in one easy swoop.
Maintaining State & Federal Compliance
Without a proper fleet management strategy, it becomes dangerously easy to lose sight of where you stand in terms of compliance with all relevant laws and statutes. Are all your drivers trained, certified, and legally authorized to use your vehicles? Are all operators filling out any mandated driving logs? Are your vehicles properly registered, authorized, and inspected up to Department of Transportation standards? You likely won’t know the answers to these questions unless you have ready access to the right type of data – and sufficient methods for acquiring it in the first place.
Compliance can be a slippery slope, because it’s critical to stay atop of it and yet surprisingly easy to fall behind on. This is doubly true for those without an effective plan in place to manage their fleet. When you establish an effective compliance strategy, however, you’ll be able to stay up to speed on any potential issues. Did somebody’s certification expire yesterday? Were a driver’s logs not filled out? Fleet management systems can detect these situations and alert you immediately, allowing you to rectify the problem before it can grow out of hand.
Maximizing Efficiencies & Profits
Company vehicles directly impact revenue. Every hour a truck is or isn’t on the road correlates to money being made or lost. With that in mind, you can use software and other tools to optimize routes and streamline maintenance scheduling, which ultimately results in maximizing your profit per truck and even profit per mile,
This is possible thanks to the vehicle tracking available in today’s fleet management software. Using real-time data, you can compare the efficiency of various routes, taking into account factors like fuel usage, elapsed time, distance traveled, time spent on and off the road, and so on. Having access to telematics data for all your vehicles allows you to make everyday decisions around key operational factors like staffing, route choices, and truck counts.
By being able to have such unparalleled insight into the performance of your fleet, you can cut back and double down where needed. Does the data show that Tuesdays are routinely a low-volume day? Cut out a truck and allocate logistics across the remaining fleet. Leveraging data to make these decisions on a regular basis is only possible thanks to the use of today’s modern fleet-tracking software. This technology can help companies discover big gains in efficiency with little, if any, downside.
What Is Fleet Management Software?
You may have noticed that we’ve referenced fleet management software more than once throughout this article. That’s no coincidence – in today’s connected world, there are a host of digital solutions that allow you to accurately compile, track, and analyze real-time data across dozens of metrics. To a fleet manager, these software applications are a godsend, as they take out much of the manual legwork once necessary to track key information. These systems also store this data so that it’s easy to access when you need it – such as when the DOT auditor is knocking on your door.
Fleet management software is more than just a way to organize and collect data, though. When used effectively, these programs can pave the way toward superior fleet tracking and compliance reporting, which, in turn, provide the opportunity to cut costs significantly. Here’s a closer look at what fleet management software can do for you:
For those unfamiliar with the power of these software applications, the sheer potential for data collection and real-time tracking is astonishing. With their help, you can determine not only where your vehicles are at any given time – you can also review how well a driver is obeying the rules of the road, how long they are taking to complete scheduled stops or deliveries, their driving style, and even their fuel economy. This data provides you with a clearer look at the effectiveness and efficiency of your drivers than if you were sitting in the passenger seat with them.
The other big benefit of incorporating a fleet management software is dramatically improved compliance reporting. No longer will you need to manually determine when and where trucks crossed state lines or how much fuel was consumed – with the power of integrated telematics, this data can all be uploaded in real-time. Automating the collection of this type of data isn’t just convenient – it also reduces the likelihood of clerical errors and improves the quality of record-keeping in general.
Certain software providers also provide specialized solutions explicitly for compliance purposes. Rand McNally, for instance, offers their IFTA reporting tool that can help fleet operators track exactly when and where drivers were across state lines, what direction they were headed, and for how long they were over the border. Having such precise reporting at your fingertips makes it easy to ace DOT audits and other regulatory reporting requirements.
Along with passive vehicle tracking through telematics, drivers can also typically engage directly with fleet softwares to upload key reports, receipts, paperwork and other data. As an example, Fleetio offers solutions that simplify and digitize the process of completing daily driver inspection reports. Rather than document their daily vehicle checks using paper forms, drivers can directly upload their findings onto the company’s online software, enabling easy, paperless reporting. Integrating such solutions into your business can help dramatically reduce costs and errors related to compliance.
One of the primary benefits of fleet management software is that it can expose where poor maintenance practices, noncompliant reporting, bad driving, or other inefficiencies may be hampering financial and operational performance. By casting a stark light on just how effective a fleet is or isn’t, these programs allow fleet managers to question current practices and make changes to reduce costs. Should I redesign routes? Add or remove vehicles from the fleet? Take a new approach to maintenance or compliance? While these systems can’t provide easy answers, they can show you the data you’ll need to know to make informed decisions.
What Are the Most Important Fleet Management KPIs?
When you first create a fleet management plan, it’s important to choose the correct key performance indicators (KPIs). If you don’t track the right data, you won’t know just how effective – or ineffective – your plan is relative to your original goals and mission. The following are some example KPIs that would be a great choice for a variety of businesses to begin with:
- Vehicle Total Cost of Ownership
- Cost per Mile
- Fuel Costs
- Available Hours of Service
- Average Maintenance Downtime
- Total Vehicle Breakdowns
- Repair Turnover Rate
- Vehicle Utilization
- Road Safety Compliance
These KPIs cover a range of fleet management concerns for good reason. When you’re creating your initial operational benchmarks, you want to make sure you’re at least touching on the most critical elements of fleet management: vehicle costs and maintenance, compliance requirements, and driver performance.
Of course, there may be other, more relevant indicators specific to your industry. But with the right KPIs, a quality digital solution, and a thorough understanding of just what it takes to effectively oversee a fleet of commercial vehicles, you’ll be running a watertight operation in no time.