Work vehicles are a huge part of the economy and are used in almost every industry. Companies with fleets include hauliers, couriers, sales, repair and service industries, utilities, public transport, oil and gas delivery, and emergency services. As well as cars and trucks, fleet management technology is also used for maritime vessels.
As organisations have scaled up, they have seen the benefits of trying to co-ordinate and keep track of their fleet of vehicles. In fact, just three years ago, Gartner said the fleet management industry was worth $16bn and was still growing. In this article we explore why fleet management is an important strategic tool for many organisations, what its benefits are, how the software works, and what the challenges are.
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The purpose of fleet management
Put simply, fleet management is the organisation and administration involved in coordinating business vehicles. The ultimate aim is for companies to be able to control the entire lifecycle of the fleet, and this would subsequently allow them to improve efficiency, reduce costs, increase productivity, reduce risks, and ensure compliance with government regulations.
Fleet management encompasses vehicle tracking, mechanical diagnostics monitoring and driver behaviour analytics. By having a grasp of these three different areas, businesses can control their costs, oversee performance and maintenance, remain competitive in their sector and manage customer demand and expectations.
Fleet managers may have different tasks depending on the size of their business, but their responsibilities can include keeping track of fuel consumption and associated costs, managing drivers, health, safety and compliance, route planning, and vehicle acquisition and maintenance.
The challenges faced by fleet managers
Fleet managers have many time-consuming tasks which are often hard to justify from a return-on-investment perspective. Many of the responsibilities for fleet managers overlap, and this can create an added layer of complexity. Here are some of the main tasks and challenges they have to deal with:
1. Fuel management
Fleet managers have to budget for fuel costs, and this isn’t easy as there has (up until recently) been a constant rise in fuel costs. Even modest fluctuations can veer managers off course, and as prices do fluctuate because of external factors there is little managers can do but ensure they have everything else in place to make fuel consumption and costs adaptable.
Diesel was the forerunner for many years, but due to its harmful NOx emissions, and additional surcharge to tax, it is not always the most cost effective option. Petrol is the market leader but there is growing competition from electric and hybrid vehicles and governments around the world are pushing for an electric future. However, there are higher costs to purchase an electric and hybrid vehicles.
Maintenance teams should be keeping track of fuel usage, if it is wildly fluctuating, the team could check for issues that can be resolved. In addition, telematics can tell the team whether or not a driver’s behaviour is having an effect on fuel costs.
The challenge is then not just the consideration of the best cost at a specific time, but the likely long-term costs. Cost benefit analysis assessments need to be made periodically, before any purchases and there then needs to be monitoring using technology as part of an overarching fleet management strategy.
2. Vehicle acquisition
As part of any assessment the fleet manager has to make, they need to keep track of vehicle legislation, determine the suitability of vehicles and perhaps most importantly negotiate deals with vehicle manufacturers. Additional costs such as tax, insurance and maintenance need to be considered, as does resale value.
3. Driver shortages
While the demands for freight transport are increasing, there are not enough driver applicants to meet this demand. The alternative is that organisations are hiring inexperienced drivers which increase risks from a number of perspectives, most prominently health and safety, but also from a lack of knowledge around favoured routes, best practices, and fuel usage. Driver behaviour monitors can help to ensure that these drivers – and others on the fleet are all kept safe and are following company policies.
4. Connected, electric and autonomous cars
Cars and technology are becoming more intertwined. As mentioned, electric cars are the future, and many manufacturers and technology companies are pouring money into making vehicles autonomous too. Fleet managers will need to keep a close eye on which trends are genuinely going to make an impact both for their own organisation and in general. There are already applications that can track routes, notifications for maintenance, tech that can monitor the way a driver responds to certain situations, and IoT sensors. These technologies will also then need to come equipped with the right cyber security safeguards, data back-up and disaster recovery solutions.
5. Sifting through data
The role of a fleet manager is changing in line with advancements in technology. With that, there will be more that they have to manage as time goes on including asset management, environmental and sustainable initiatives, mobility management and keeping track of all of this new data coming at them. It’s worth noting that picking out which data is of use to them and the overall business is critical, and fleet managers will require some support with this as well as in many different areas, so delegation in large enterprises is key. Not all information is equal, and not all software is equal either; fleet management software is a large part of their job, so getting the right vendors, products and services in place are also crucial.
6. Compliance requirements
As well as keeping up to date with vehicle legislation, fleet managers also have to ensure there are ways to meet other compliance requirements from simple daily checks and inspection sheets, to MOT, insurance and driver checks. There needs to be enough data – which is also backed-up securely, in case of an accident.
7. The impact of COVID-19
New challenges are arising as a result of the pandemic. For instance, fleet managers will require the ability to monitor vehicles remotely – increasing the requirement for a cloud-based fleet management software product. Other requirements include the ability to scale-up or down dependent on demand, enabling tachograph data to be downloaded remotely, managing the risk of company cars being used for other purposes.
What is fleet management software?
Fleet management software enables a manager to have all of the information they need about the fleet in one place. It effectively acts as a database, which can help organisations keep track of everything from expenses, dispatching drivers, sending updates to customers, compliance tasks, driver behaviour and fuel consumption. Some of these will require different applications as part of a suite, but the data could be pulled in from the overall database, making the administrative process far more efficient and fleet managers more productive.
Fleet tracking uses GPS to monitor assets – vehicles, workers or equipment. It uses telematics technology to collect data in real-time so it can provide actionable insight for fleet managers straight away. That way, a manager can know which vehicles to dispatch, where a vehicle is positioned, and when a vehicle is returning, for instance.
Here's a summary of some of the key benefits of fleet management software:
- Many administrative duties such as quoting, invoicing, identifying and dispatching drivers, expense management and keeping customers informed can be simplified or automated.
- Track fuel consumption, check vehicles and drivers when there are cases of fuel overuse and monitor driver behaviour. By doing so, fleet managers can manage fuel fare more effectively. For instance, by analysing driver behaviour, managers can get insight into idle times which may be contributing to a large expense on fuel.
- Fleet management software can come equipped with workflow automation software, offering managers regular service and maintenance reminders based on factors such as date, mileage or time of use. By monitoring maintenance scheduling, managers can act before a vehicle shows signs of malfunction.
- Simplification of the way drivers are managed in the field with an application to communicate with them through messages and orders. In addition, vehicles can feed back updates in regards to the order and the estimated time of arrival.
- Regulatory and legal compliance can be better monitored as all of the information is kept up to date and notifications on expiry dates can be used.
- All of the above can help fleet managers to become a more strategic part of the overall business, as they can help with budget and forecasting, sustainability efforts, and management of big changes (such as the pandemic lockdown).
- Fleet management products also integrate with other software providers, making other tasks more seamless such as payments, route-optimisation, and HR tasks.
- Modern software suites will also support mobile apps, which can be used by staff to input and access data remotely