For companies that rely on their fleet of vehicles to stay in business (e.g., transport agencies, car rental companies, shipping and delivery services, public transportation organizations, utility companies, food distributors, etc.), fleet-related costs are mostly their largest business expense, which makes effective fleet management vital to keeping a healthy bottom line.
But what exactly is fleet management and why is it important?
Fleet Management: Why It Matters in Transit Operations
Fleet management goes beyond just owning and operating a vehicle. In a nutshell, it is the complete management and coordination of an organization’s fleet of vehicles and covers every stage of a vehicle’s lifecycle (from acquisition to utilization, from maintenance to retirement) with the aim of reducing operational costs, improving efficiency, mitigating risks, ensuring fleet safety and reliability, and staying compliant with regulatory standards.
In transit operations, keeping vehicles and related assets in tip-top shape, as well as services on schedule and under budget, is vital to customer and stakeholder satisfaction.
Fleet Management: Challenges and Solutions
Fleet management, however, is no easy feat. Below are some of the challenges fleet managers face and how to solve them.
Lack of Visibility Into the Location of Your Vehicles
Do you know where your vehicles are? Do you know what to tell your customers when they phone in to ask for updates on the whereabouts of their rides? Are you confident your vehicles haven’t been stolen or stuck in the middle of nowhere?
GPS-powered fleet management systems track your vehicles’ location in real time, affording you the peace of mind that comes from knowing your vehicles are where they should be. In the case of vehicle theft, which, according to the FBI, amounted to a nationwide loss of $5.9 billion in 2016, you have a better chance of recovering your properties when you know where they are.
Geo-fencing, which is a useful vehicle tracking feature that leverages RFID or GPS technology, alerts you whenever drivers enter or leave a virtual geographic boundary. This helps with notifying customers that their rides have arrived or letting drivers know that they’re entering a no-go zone.
Inefficient Routing Schedule
Are your drivers arriving at onboarding and deboarding points on time? Do they know which roads to avoid and which to use at certain times of the day to get to their destinations faster? Are you able to make adjustments if incidents such as vehicle breakdowns, driver shortage, or customer cancellations occur? Can you accommodate special requests from customers at short notice?
In the face of rising consumer expectations, particularly in a competitive industry such as transportation, maintaining a strong reputation is key to longevity. Helping to ensure timeliness of services is just one advantage fleet management systems provide. The data they track allows you to optimize routes, maximize driver journeys, and make necessary dispatch adjustments on the fly.
According to data from the U.S. Department of Transportation’s Fatality Analysis Reporting System (FARS), in 2016, 37,461 lives were lost on U.S. roads, a 5.6% increase from 2015. Although 2017 data found that roadway fatalities went down almost 2% to 37,133 from the previous year, speeding, driving under the influence, and distracted driving
Meanwhile, data collated by the Federal Motor Carrier Safety Administration (FMCSA) showed that 4,440 large trucks and buses were involved in fatal crashes in 2016, a 2% increase year-over-year.
It is important, therefore, that fleet managers make driver safety a priority. Doing so reduces the chances of your drivers becoming involved in preventable accidents, prevents your company from getting sued, and eliminates vehicle repair expenses and downtime costs.
Fleet management software tracks not just the location of your vehicles, but also alerts you of driving incidents that can jeopardize driver, commuter, and pedestrian safety. These incidents include heavy braking, hard acceleration, and speeding, among other things. The data gathered about driver behavior can be used to develop individualized coaching and training programs.
Keeping Costs Down
There are many aspects to fleet management, which means there are various ways to lose money (or save on costs, if you employ the right strategies and solutions).
- Asset Utilization: Lack of visibility into the whereabouts of your vehicles won’t help you maximize their usage. Meaning, your vehicles aren’t used enough even while they depreciate, employees get paid, and insurance payments are made.
- Vehicle maintenance: You know the old adage, “An ounce of prevention is worth a pound of cure.” An efficient vehicle maintenance schedule ensures your vehicles are always at their peak. But without the ability to conveniently view maintenance histories, you will more likely find yourself reacting to vehicle breakdowns instead of proactively preventing them.
- Driver abuse: If you don’t know where your vehicles are, would you know if your drivers are where they say they are? Vehicle misuse and privilege abuse are not uncommon among fleet drivers and, if left unchecked, can cost you in terms of lost staff productivity, vehicle wear and tear, and excessive fuel consumption.
- Customer satisfaction and retention: Customers need to get to work or their appointments on time, but if your vehicles are always late, they’ll turn to more reliable service providers. According to statistics, acquiring new customers is 25 times more costly than retaining existing ones.
- Regulatory compliance: The ability to prove compliance with various federal,
state,and local laws governing fleet activities can save you thousands in penalties. This means certifications, licenses, registrations, insurances, and inspection reports should be readily available when the authorities ask for them.
- Safety: Ill-maintained vehicles pose a threat to the safety of pedestrians, drivers, and the riding public. One accident alone can cost you more than the price of a vehicle.
Bottom line, fleet management software helps overcome challenges and solutions driving better business results through greater efficiency.