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What is Fleet Management? The Essential Guide

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what is fleet management and what is its purpose?

Key Takeaway

  • Fleet management is the processes and systems used to control and optimize the operations, maintenance, compliance and overall performance of a company’s fleet of commercial vehicles, with the purpose of reducing costs, improving efficiency and increasing productivity.
  • Businesses that rely on transportation utilize fleet management to control costs, productivity, fuel management, and compliance. As such, fleet management is comprised of several different tasks to keep vehicles and operations running smoothly and efficiently.

    Fleet vehicle management best practices involve the use of technology and software solutions to help reduce costs, enforce driver safety, minimize risk, increase productivity, and schedule preventive maintenance to reduce downtime.

    What is Fleet Management?

    Because fleet management is all-encompassing, it is difficult to define. Essentially, fleet management refers to the processes involved in overseeing a fleet of vehicles and related assets, as well as optimizing efficiency while minimizing costs and risk. Thus, fleet managers are responsible for controlling costs, maximizing profitability, and reducing fleet vehicle risks.

    Benefits of Fleet Management

    The benefits of fleet management are multi-fold. Namely, effective fleet vehicle management yields fuel savings, increases productivity, improves customer service, and provides real-time visibility.

    • Fleet management provides real-time visibility–Fleet management software provides fleet managers with comprehensive historical data as well as real-time visibility into operations, allowing them to make data-driven decisions to improve safety, reduce costs, and maximize efficiency.
    • Fleet management reduces fuel costs–According to Verizon Connect, fuel accounts for nearly 40% of fleet ownership. GPS vehicle tracking solutions as part of your fleet management strategy can truck cabsreduce fuel costs by 20%-25%. These tracking solutions alert you to idle time per vehicle and deliver idle time averages across your fleet. They also empower you to monitor fleet performance, track how improvements affect idle time, and help educate drivers about the need to reduce idle times.

    GPS tracking solutions also reduce fuel by optimizing routes. Typically, companies that adopt these solutions reduce total miles driven by 5%-10%. Plan more efficient routes with access to maps detailing the location and destination of each fleet vehicle. You also can access driver and vehicle information while monitoring traffic and weather. Best of all, you can improve efficiency by sending the vehicle closest to the destination via the most direct route to improve customer service.

    • Fleet management increases productivity– Telematics solutions for fleet vehicle management also increase productivity. Robust telematics software features enhance productivity by helping you gauge maintenance, reduce idle time, downsize your fleet, improve your asset tracking and routing, monitor safety, and improve employee efficiency.

    One of the best ways that telematics solutions make fleets more productive is in tracking maintenance. Fleets can’t operate when vehicles are in for unscheduled maintenance or break down, and telematics helps you be proactive with preventive maintenance. You’ll know how many hours your vehicles run and get real-time insights into engine hour data to optimize preventive maintenance schedules. You’ll also know exactly when to replace vehicles.

    To learn more about fleet preventive maintenance, read our step-by-step guide on how to implement a fleet preventive maintenance plan and it comes with a printable checklist! Also, check out our big list of the best fleet maintenance software systems.

    • Fleet management improves customer satisfaction– You can use fleet vehicle management to improve customer satisfaction, especially with the aid of a GPS tracking solution. Your asset tracking solution will help ensure driver compliance to routes and schedules to avoid missing or delaying a delivery or appointment. You’ll also improve customer satisfaction by knowing which vehicle is closest to the job to minimize travel time and get drivers to customers more quickly.

    Fleet management GPS tracking solutions also help companies get drivers to appointments on time. You deal with new or canceled appointments regularly, but you don’t have to lose productivity because of them. Using real-time locations, you can send drivers to customers on time and serve more customer needs, despite unplanned schedule changes. You’ll also give customers better driver ETAs and avoid frustrating them with vague or inaccurate driver information when you use a GPS tracking solution as part of your fleet management strategy.

    Challenges of Fleet Management

    Any time you have to manage fleets, drivers, costs, and schedules, you face challenges. While technology and software solutions eliminate many challenges for fleet managers, you still need to solve problems quickly. Some of the largest fleet management challenges include driver safety and productivity, cost-reduction initiatives, and fuel price volatility.

    Stobart Fleet

    Driver safety– Effective fleet management prioritizes driver safety. To address this challenge, rely on safety education programs, regulations, and predictive analytics to work toward eliminating preventable accidents.

    Cost-reduction initiatives– Because of changing budgets and forecasts, it is difficult for fleet managers to reduce costs. The right software and tools can help, but fleet managers need the experience to become skilled at forecasting.

    Fuel price volatility– Even the best cost-reduction strategy can fail because of the volatility of fuel prices. Taking steps to increase fuel efficiency, decrease idle time, and optimize routes help reduce fuel consumption, but fleet managers cannot guarantee accurate fuel forecasts.

    Fleet management involves operational cost-effectiveness, vehicle maintenance, driver and asset management, vehicle safety and compliance, and operational efficiency. Effective fleet management helps you reduce fuel costs, optimize routes, increase productivity, and enhance customer satisfaction. Fleet managers also face the challenges of ensuring driver safety, reducing costs, and forecasting fuel prices.

    How Does Fleet Management Work?

    Fleet management involves the creation of a complete system for organizing groups of cars, vans, trucks, trains, or marine vessels that are used to transport goods. For this system to work properly, a business or government entity must establish set practices and clear expectations that are standardized. The core components of a fleet management system are:

    • Management Software. A software platform should be used and, in most cases, a Fleet Vehicle Management System is used. This centralized software provides connectivity between the other components and the staff that are managing the operation.
    • GPS or Cellular. Connectivity is another important component of a fleet management system. A GPS or cellular data connection is often used in conjunction with a tracking device for the transmission of important fleet data.
    • Tracking Device. A tracking device can be attached to a vehicle, trailer, or other equipment to provide fleet data. In some cases, applications can be installed on mobile phones and used as a source of tracking data. In other situations, personally may also carry portable GPS devices that can be taken in any vehicle.
    • Vehicle or Vessel. Each vehicle may have unique transportation needs and fleet management solutions are available for different truck sizes. You will also find devices and software that are optimized for use with truck fleets, ocean fleets, or other unique applications.
    • Operators and Engineers. Fleet management systems will provide real-time data for an entire fleet. This allows drivers, maintenance engineers, and office staff to coordinate their work tasks and collaborate in a more efficient manner.

    What Does a Fleet Manager Do?

    A fleet manager is responsible for overseeing every aspect of fleet operations. Fleet managers oversee fleet vehicles and drivers, ensure driver safety, optimize fleet costs and efficiency, manage fuel programs, and manage regulatory compliance.

    They also work in collaboration with other department managers to ensure that the necessary vehicles are available and operational to allow for on-time deliveries and distribution. Here’s a list of common fleet manager tasks and responsibilities:

    • Hiring, managing, and retaining drivers. Fleet managers are responsible for recruiting and hiring drivers, overseeing driver training processes, managing existing drivers, and implementing strategies to retain drivers. Sometimes they also hire a fleet management service provider for additional support.
    • Managing driver safety. A fleet manager manages driver safety by ensuring that all drivers receive adequate training, monitoring driving behaviors, identifying and addressing risky driving behaviors to improve safety, and optimizing safety procedures.
    • Vehicle acquisition. It’s the fleet manager who is tasked with evaluating needs for new vehicles, whether additional vehicles are needed to meet current needs or older vehicles must be replaced.
    • Ensuring the fleet is fully operational. Coordinating preventive and corrective maintenance activities, managing work orders and repairs, and overseeing other vehicle operational needs are all processes fleet managers oversee to ensure that all fleet vehicles are fully operational.
    • Implementing and managing fuel programs. Fleet managers are responsible for developing policies for refueling fleet vehicles, identifying preferred fueling locations, developing processes for drivers to document and report fuel purchases, and tracking, monitoring, and reporting purchases and overall fuel usage.
    • Managing regulatory compliance. Fleet managers must ensure that all fleet vehicles and drivers are in full compliance with all applicable regulations at all times. This includes managing hours of service (HOS), licensing requirements, vehicle inspections, electronic logging devices (ELDs), equipment maintenance logs and other regulatory requirements.
    • Reducing operational costs. Fuel program management, preventive maintenance, and other fleet management processes are developed with the goal of reducing operational costs while maximizing fleet efficiency. Fleet managers assess needs and identify opportunities to reduce maintenance costs, cut fuel spending through efficient route optimization and other strategies, and reduce other operational costs. Fleet managers often use fleet management software and fleet tracking solutions to manage processes and analyze data to uncover opportunities to optimize performance.

    How to Improve Fleet Management

    There are several ways to improve your fleet vehicle management processes and improve fleet efficiency, from implementing fleet tracking best practices to implementing the right fleet management software that includes asset management tools for efficient fleet monitoring. Here’s a look at proven strategies to improve fleet management.

    1. Implement Fleet Tracking Software

    Manual fleet tracking methods are time-consuming and prone to inaccuracy. Fleet tracking software enables you to optimize fleet tracking processes by storing all vehicle and driver information in a central location, track vehicle locations in real-time, manage driver safety records, and track driving behavior to identify risky behaviors and improve fleet and driver safety. With easy to understand dashboards, automated reporting, and data analysis features, fleet tracking software provides essential insights and tools to streamline documentation and management processes.

    2. Integrate Data Across Systems

    Integrating your fleet management software with other tools such as GPS devices, ELDs, fuel cards, and telematics provides a more comprehensive view of everything that’s going on with your fleet. For example, if your drivers use an app to conduct digital vehicle inspections, integrating this data with your fleet vehicle management system allows fleet managers to proactively identify and address safety concerns and potential vehicle issues. If you use a separate solution for fleet maintenance management, integrating it with your fleet tracking solution helps you better manage preventive fleet maintenance activities based on vehicle condition, miles traveled, and other data.

    3. Optimize Fuel Costs

    GPS-based fleet tracking systems enable fleet managers to assess the efficiency of the routes drivers are taking and identify the most efficient routes to minimize costs. These systems also allow for tracking metrics like idle time and speed, which can help to pinpoint target ranges for optimal economic efficiency. Conducting route analysis and integrating Google Maps data enables fleet managers and drivers to identify the fastest route to a destination based on traffic patterns and other data.

    4. Manage Safety Compliance

    Regulatory compliance is a key component of effective fleet management. In addition to monitoring driving behaviors to improve safety, fleet managers should also leverage tools to streamline processes like hours of service (HOS) documentation, vehicle inspections, monitor the statuses of licenses and permits, and provide a central storage location for easy access to the documents fleets must have on hand at all times, such as HOS records, proof of insurance, records on vehicle inspection, maintenance, and repairs, driver training records, incident and accident reports, and other documentation.

    4 Ways Fleet Management is Evolving

    Advances in technology have radically transformed the fleet management industry. Even with this incredible progress, new innovations are being made each year to push the industry further. These are some of the most promising trends that could add significant value to fleet management practices.

    • 5G Network Connectivity. Many wireless carriers have started introducing 5G connectivity, which has speeds that are 100 times faster than existing 4G technology. These speeds can radically increase the bandwidth used for Internet of Things (IoT) devices and hardware used for fleet management.
    • Autonomous Vehicles. We are already seeing autonomous vehicles being used in niche logistics and military applications. These integrated devices rely upon many of the components present in a fleet management system and may offer unprecedented standards for safety and efficiency.
    • Mobility-as-a-Service (MaaS). The MaaS movement is enabled by other major trends including the sharing economy and the rise of subscription services. Mobility-as-a-Service can bring new opportunities for lower-cost access to transportation services that include rental, public transportation, and sharing offerings.
    • Telematics. Telematics helps operators by displaying real-time vehicle diagnostics that can improve decision-making and efficiency. As technology such as artificial intelligence (AI) continues to improve these capabilities are likely to become far more impressive and enable new standards for data collection and visualizations.

    Looking for how to improve your fleet vehicle management? Try implementing a fleet management system. Not sure where to start? Read through our recommendations of the best fleet management software to find the right fleet management solutions for you.

    Images via Flickr by Raymondo166and Raymondo166

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