Fleet managers know the struggle of managing maintenance data. With so many new technologies and devices now sending data from the truck to the shop, managing it all can be a big headache. It won’t be long before you notice a significant gap in your fleet management duties. Budget items will run together, and you’ll find it harder and harder to distinguish between budgeted maintenance costs and costs that came as the result of accidents and fleet abuse.
Fleet managers and shop technicians know that a lot of their time is spent on things that aren’t considered routine maintenance. The push and pull of unexpected activities drag technician attention away from routine maintenance. Many times, fleet managers have no idea what those costs are, but they need to get a handle on them because they normally don’t budget for those types of circumstances.
When these situations become too many to handle, it might be time to implement a fleet management software solution, which opens the door to a whole new world of maintenance data you otherwise cannot access. This data allows you to institute a pre-existing system of maintenance standards that you can use to categorize your fleet’s expenses (both planned and unplanned), streamline work orders for vehicle service, and better understand the overall health of the fleet’s assets and bottom line.
Data Gaps and Fleet Management
Fleet managers all over the country experience the pitfalls of data gaps in a fleet operation. In fact, many fleets have trouble effectively anticipating fleet costs and capturing valuable information. They get this information from vehicle service to help them better prepare for future budgeting of time, money, and resources.
In today’s modern world, fleets come in many different shapes and sizes. Whether you are a one man or woman owner-operator or a large long-haul motor carrier, you are considered a fleet regardless. Regardless of your size or operating procedures, you’ve got to develop a comprehensive fleet management program. It quite simply is the best way to run an efficient fleet operation.
Fleet management is, at its core, the policies and procedures associated with all aspects of a fleet operation, from maintenance to budgeting, training, recruiting and retention. Depending on how large or small your company is, your fleet management software and practices will vary.
We talk a lot about “fleet manager” as a generic term, but whether the term is in your title or not, managing a fleet and implementing a fleet management program is something any trucking manager can, and should, do.
Primary Fleet Management Responsibilities At-A-Glance
There are specific requirements involved with establishing, managing, and utilizing a fleet management program. First, you want to make sure you record and maintain accurate data on all aspects of your fleet operation, whether it’s one person or one hundred. Fleet managers are often responsible for keeping detailed maintenance histories for each and every vehicle in the fleet.
Fleet managers must also ensure they assess, manage, and mitigate safety and maintenance risk levels. Programs should include screening policies and strictly enforced safe driving policies. Data profiles should also be calibrated to provide this information.
Safety and maintenance data should be thoroughly analyzed. Issues need to be extrapolated from the data and solutions implemented before problems seep into the rest of the fleet. Proactive fleet managers have a detailed plan of action for situations their truck drivers may face out on the road. Whether it’s a vehicle breakdown, problematic inspection, or traffic accident, you need to have a policy in place to address it and utilize the data that it generates.
Why is Fleet Management Important to the Fleet?
Excellent fleet managers and – by proxy – great fleet management systems can boost your company’s overall well-being. Not only will you see lowered costs and greater returns, but you’ll help eliminate inefficient business practices. Better fleet management reduces fuel consumption and increases productivity.
Proper utilization of fleet management data helps you increase overall business efficiency. Customers get the goods they ordered, and bills get paid on time. Regular vehicle maintenance can also lead to reduced instances of breakdowns, which inevitably hit the bottom line.
Let’s also not forget about employee satisfaction. Fleet management systems allow you to create an impartial structure and establish fair and accurate policies. In the end, this will strengthen corporate peace of mind. Those in the c-suite or on the company’s board (if it has one) can rest assured that the company is maximizing success and minimizing risk.
If your fleet requires a few vehicles to function, then you need some form of fleet management software or an effective fleet manager. You will determine your needs by the size of you fleet. Let’s take a closer look at how businesses of different sizes should manage their fleets.
Fleet Management for Businesses of Different Sizes
Small businesses have unique needs. But what is a small business? Well, the U.S. Small Business Association (SBA) considers a small business in the transportation sector as one that does $27.5 million or less in average annual receipt for tractor/trailer transportation and $15 million or less for transit and ground passenger companies.
Large businesses have a specific number of employees. Companies with more than 500 employees are considered large businesses. And while there is no established threshold for the number of vehicles in a large fleet, many consider it to be a minimum of 200 commercial motor vehicles or more.
When mapping out your fleet management program, you want to evaluate things like business classification. Does your company fall within the small or large business category? What industries does your business operate in and will this impact your classification?
In the end you’ve got to know how many vehicles you will need. In an ideal situation, how many vehicles would you like to add to your fleet, and why? There will be a big difference in how you manage your fleet depending on whether you use delivery trucks, big rigs, or otherwise.
Focusing on Procurement
One of the primary jobs of fleet management companies is to ensure consistent and affordable procurement of commercial motor vehicles. Trucking should invest in fleet management systems that provide access to databases and other tools to ensure you establish a basic list of preliminary fleet requirements. Start with how you select your fleet.
First, make sure you select the most appropriate type of vehicle for the operation you run. A residential cleaning service might need sedans or minivans instead of flatbed trucks. A last-mile delivery company might also need vans or other urban delivery vehicles. Whereas a long-haul trucking company would need Class 8 tractor trailers.
You’ll also need to consider your primary acquisition options. Purchasing and leasing are the two primary fleet procurement method trucking companies use to fill out their fleets, but they aren’t the only ones. For some trucking companies, there may be some financial benefit for alternating between procurement methods. Many trucking companies use a hybrid procurement model.
Examining Vehicle Purchasing and Leases
When you purchase a commercial motor vehicle, the company acquires a vehicle or set of vehicles from a trusted source. This could be a dealership, auction house, or other verified independent reseller. Fleets who buy their vehicles outright get the luxury of applying their branding and logo on all their vehicles. Even better, OEMs and dealerships often offer discounts to trucking companies interested in purchasing vehicles in bulk. Obviously, this method requires a lot of financial investment on the front end.
Vehicle leases, on the other hand, allow you to sign a lease agreement with an organization or business. They own the vehicles you want to lease. The agreement would cover the terms of the lease, as well as monthly payments, maintenance requirements and mileage stipulations. When you lease your fleet vehicles, you tend to lower your monthly costs and, as a result, can give your fleet a spruce every few years.
Still, this doesn’t mean every fleet should lease their vehicles. One of the biggest downsides to leasing your vehicles is damage responsibility, which you could be responsible for. And while insurance can slightly mitigate this risk, fleet managers must consider it when they decide whether to purchase or lease.
Now, do you feel ready to implement your own fleet management system? Or, perhaps you want to improve your skills as a fleet manager or owner-operator. We hope our handy guide covering the topic has helped!