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How does fleet management work?

fleet management software
(Image credit: Photo by Rodrigo Abreu on Unsplash)

According to MarketsandMarkets, the fleet management market, including GPS tracking and telematics, is expected to grow from $19.9bn in 2020 to $34bn by 2025 at a compound annual growth rate of 11.3% during the forecast period. The MarketsandMarkets report suggests that the key reasons for growth are the strict government regulations, an increase of cloud-based solutions being used, growing Internet of Things (IoT) use and rising demand of big data analytics.



So what is fleet management and which businesses use it?

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.

Work vehicles are a huge part of the economy and are used in almost every industry in some way. Companies with fleets include hauliers, couriers, sales, repair and service industries, utilities, public transport, oil and gas delivery, and emergency services. Even if a particular business does not have its own fleet, it is likely that it relies on a fleet for some part of its supply chain and may outsource this to another company.

The components of fleet management

There are many components of a fleet management technology solution. Here we look at the main parts:

Fleet tracking

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.

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.

Telematics

Telematics are usually black boxes installed inside a vehicle which track its location, performance and also give the fleet manager an idea of how the driver is driving. For instance, it can tell them if a driver is accelerating too much or braking hard, resulting in additional fuel costs. Operational data collected by telematics systems include: vehicle speed, miles per gallon, fuel consumption, weight of load, gear, braking intensity and driving style. In addition, some telematics systems can inform the fleet manager if the ignition is on, if a vehicle’s doors are open and if the panic alarm has been activated.  The data is sent to the company’s servers directly, or to a vendor’s server, which an organisation has access to.

Security and safety

Security is usually embedded into the solution rather than as a standalone application or feature.

As the use of technology has grown so have the cyber security risks, so it is imperative that a fleet manager vets software and hardware products before selecting them. Those with encryption policies, identity and access management, and security validation are more likely to have the right security in place to secure the software. It is also important to know the type of infrastructure they’re using and where data will be stored, as well as third-party providers being used.

Most other security aspects are around maintaining the driver and vehicle’s safety.

One of the features available in some solutions is driver identification, so that drivers can identify themselves when they’re using a vehicle by using biometrics or a key fob. This will help if there are speeding tickets or third party insurance claims.

In addition, vehicles can be set to only be started by authorised drivers, and there can be notifications of when doors are opened and closed, alerting the fleet manager to suspicious activity.

Tracking technologies such as telematics and GPS tracking can help to detect dangerous driving patterns, anticipating a potential accident and enabling the fleet manager to intervene. They can also help to locate remote assets or vehicles to ensure that the contents and the asset itself is safe.

Maintenance tracking

As vehicles are one of the biggest investments for a fleet manager, it is essential that there is a proactive approach to maintenance.

Maintenance software, often included as part of fleet management solutions, allows organisations to plan and track the servicing and repairs of vehicles. They can also create purchase orders for parts and suppliers, and send invoices to customers through this platform. In addition, other documents such as warranties, claims, details of providers and maintenance history can all be stored.

Using GPS fleet tracking, fleet managers can track mileage, fuel use and engine hours automatically, so that they can be alerted when a vehicle is due for repairs or servicing. This is also a strategic move as it can allow them to plan how they’re going to use their assets, budget and staff in the most efficient and cost-effective way. In addition, the vehicle’s ROI will subsequently go up.

The difference between active and passive trackers in GPS tracking

When selecting GPS tracking for fleet management, there are two different types: active and passive. Depending on your needs, either of these fleet tracking systems could work for your business.

Passive tracking systems can store GPS location, vehicle speed and other data around driver behaviour. Think of them as a data logger – similar to the GPS trackers on many fitness watches, they can record the information and this data can then be downloaded and accessed once the vehicle is reconnected to the fleet management software.

For fleets that want to track mileage and more basic information, without needing real-time tracking data, passive tracking systems are ideal.

Instead of having to manually download and access the data, active systems use cellular networks – 4G and 5G – to send the data directly to the server. This means that businesses don’t have to connect the device to the server to download the data, instead it is processed and delivered in real-time. For fleet managers that want to make sure their drivers receive notifications and alerts anywhere, have a better grasp of real-time location and vehicle information. This subsequently allows them to have more strategic control over their fleet; for example public transport systems or delivery companies can reroute their drivers in real-time to make them more efficient.

Businesses that want to set up a geofence – a predetermined area on a map – can do so on active tracking systems. This means if the vehicle arrives in or departs from the geofenced area, the fleet manager will be alerted.

There are more security measures in place for active tracking systems as they allow fleet managers to track the vehicle’s location if it is stolen.

As a result of the additional features in active GPS trackers, they are more expensive than passive trackers. However, the software providers will argue that the additional productivity and efficiencies gained would offset the difference of being able to access real-time data.

To summarise, passive trackers are used to record and store important data, which can be downloaded at a later time, while active trackers record and store the same information, but also transmit this information in real-time, opening up further possibilities of how fleet managers can act on this data.

Main features and benefits of fleet management software, GPS tracking and telematics:

  • Many administrative duties such as quoting, invoicing, identifying and dispatching drivers, expense management and keeping customers informed can be simplified or automated
  • Fleet managers can 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.
  • Improved accuracy of data – telematics data would help to cut out redundant entries in fleet management databases
  • 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 dealing with changes as a result of the Covid-19 pandemic).
  • Fleet management products also integrate with other software providers, making other tasks more seamless such as payments, route-optimisation, and HR tasks.

Overall, fleet management software, GPS tracking and telematics can help fleet managers to automate, optimise and ultimately lower costs.

Further reading