Depending on the type of vehicles you have in your fleet, every single mile you drive could cost $3 or more.
More than likely, your trucks drive tens of thousands of miles a year, which means these costs add up. For costly business expenses like this, you obviously want to get the maximum out of your investment.
That’s where fleet management comes into play. It’s the discipline of managing, monitoring, and optimizing your fleet so that it gets the maximum amount of deliveries, field service visits, or other work done.
It involves a lot of different tasks and processes, spanning HR, maintenance, route planning, and more. In this article, we’ll explore all these different aspects of fleet management, including why it matters in the first place and how you can improve your own fleet management processes.
What is fleet management and why is it important?
Fleet management is the management of a fleet of vehicles like trucks, vans, cars, forklifts, etc., and related equipment like trailers and any cargo.
Core fleet management tasks involve monitoring vehicle status and scheduling any required maintenance, tracking and improving common fleet routes, and more.
The ultimate goal of a fleet manager (and the entire fleet management process) is to minimize running costs related to the fleet (like fuel consumption and maintenance costs) while maximizing the work output of the fleet — for example, through better routing or more efficient delegation.
It’s an integral part of businesses in a multitude of industries, from logistics to transportation, construction, landscaping, delivery services, and more. Any business that manages a private fleet or hires a large number of outsourced vehicles should invest in fleet management.
While fleet management teams used to rely on careful note-taking, phones, and actively contacting drivers, thanks to developments in telematics technology over the past few decades, things like tracking vehicle location, driving habits, and fuel usage can now be done automatically.
Why is fleet management important?
The average cost per mile for a truck in 2021 was $2.90, and with the spiking fuel prices, these costs are only getting higher as we speak.
While driver-based costs make up the majority of the expenses, fuel and maintenance costs alone add up to over 32%. And these costs can be seriously impacted by how well or poorly you manage your fleet.
For example, if your drivers don’t follow best practices when driving, rapidly accelerating, abruptly braking, and more, this can not only impact fuel usage (by between 15 to 30%) but the extra wear and tear will also increase your maintenance costs.
Implementing a program to promote safe driving habits (for example, implementing vehicle trackers to track and reward good performance) is a great way to tackle this issue.
Plus, promoting a culture of safe driving also reduces the chance of incidents and protects your company from unnecessary legal fees and unwelcome scandals.
And this is only the cost-reduction side of things. Improving “fleet utilization” — how effectively each vehicle in your fleet is used at any given time — is the other aspect of fleet management.
If you have no system in place, you’ll have a hard time assigning last-minute orders or work to the closest vehicle and staff. You also won’t have the data you need to analyze if there’s a better way to route your vehicles or if you’d be better off moving a distribution center, for example.
What is the purpose of fleet management?
In short, the purpose of fleet management is to effectively manage all fleet assets, eliminate unnecessary costs, and ensure that you get the absolute maximum viable output out of each vehicle and driver (without overworking any driver or machine).
That’s the big picture. Let’s take a closer look at what this looks like across the many key processes under the fleet management umbrella.
Vehicle and equipment maintenance
It’s pretty self-explanatory, but one of the key areas a fleet manager will supervise and optimize is the maintenance of all vehicles and equipment in the fleet.
This means scheduling routine preventive maintenance like oil changes and regular inspections, as well as analyzing driving metrics to identify any specific vehicles that may need corrective maintenance, like replacing tires based on an unusually high amount of miles driven.
Managing fleet costs
It’s also up to the fleet management department to keep track of all the costs related to the fleet, including new vehicle acquisition, fuel costs, vehicle maintenance costs, driver wages, and more.
If you don’t have this data, you have no way to evaluate the profitability of different contracts, clients, or even entire sections of your business.
In the past, this involved keeping detailed logs of planned driver routes and regularly checking in with drivers over the radio, but thankfully, today, all you need to do is glance at a dashboard.
Modern fleet management systems will display the real-time location of every vehicle in your fleet.
Improving driver safety is another key goal and responsibility of any fleet management team. One aspect of this is the proper maintenance of all vehicles and equipment. The other aspect is the facilitation of programs that help all drivers develop safe driving habits and solid scheduling practices that don’t lead to certain drivers being overworked or lacking sleep.
Driver hiring & retention
Whether interviewing new hires is your job as the fleet manager or it’s handled by another department, managing the culture of the fleet is your job, so you need to set expectations and guidelines for hiring.
And when the trucking industry is short 80,500 drivers in the US alone, you need those new hires to stick around.
So you also need to set up training programs and support systems that lead to improved driver retention.
If you have a private fleet, fleet managers will negotiate deals with manufacturers and schedule new purchases to ensure the safety of your drivers and the efficiency of your fleet without retiring old trucks and other vehicles sooner than they need to be.
Compliance (ELD, for example)
Depending on the types of commercial vehicles in your fleet, the type of work your company does, and your location, you have to uphold any number of compliance standards.
For example, the FMCSA (Federal Motor Carrier Safety Association) requires most vehicles in commercial fleets to include an ELD (Electronic Logging Device) and for drivers to follow strict rules for “hours of service” when on the road.
It’s the fleet manager's job to ensure compliance across the fleet, identify any potential issues, and fix them on an ongoing basis.
Scheduling & route optimization
Well-maintained trucks and well-trained drivers aren’t enough to make your fleet run like a well-oiled machine. The other part of the equation is whether or not you effectively divide loads or work orders between drivers and how effective the routes you assign to your drivers are.
You don’t want to pay overtime to 20 drivers while 12 vehicles sit in your company parking lot with nothing to do. And you don’t want vehicles to routinely get stuck in traffic on Tuesdays because of a route planning issue.
The day-to-day routine of a fleet manager
It may sound like a lot of responsibility, and it is, but today, most of these tasks are heavily supported by modern technology and software.
A typical fleet manager’s day starts with a morning check-up on drivers’ locations and workloads, identifying potential issues like poor fleet utilization or a potentially overworked driver. Then, the fleet manager might look at data that highlights individual drivers’ driving habits to check how the safe driving initiative is going.
After a lunch meeting discussing the necessity of expanding the fleet with new trucks and drivers for the upcoming holiday season, the fleet manager checks in with the dispatch team to ensure that the day has gone smoothly.
Finally, they work on a report for the administration that details all quarterly expenses related to the fleet, as well as the cost savings and efficiency improvements they’ve been able to accrue.
Why fleet management software is a crucial part of the puzzle
In the past, fleet management teams required a lot of personnel who manually collected a variety of data points and created impeccable maintenance schedules ahead of time.
Not only was it a big payroll expense, but it was also almost impossible to dissect the data and identify areas of opportunity for improvement — just imagine trying to sort through dozens of filing cabinets’ worth of data manually.
Modern fleet management software has rendered giant teams obsolete and made it easy for smaller teams (or in smaller companies, even solo fleet managers) to effectively manage large private or hired fleets.
Here’s a sneak peek of just some of what a fleet management system brings to the table:
- Real-time location tracking: instantly locate any vehicle or driver and identify patterns that affect delivery or response times.
- Fleet utilization data: find out how evenly you’re distributing work across the fleet, identify any overworked vehicles or drivers, etc.
- Smart scheduling of maintenance based on live data: instead of rigid scheduling that’s the same for each vehicle, you can rely on the data to schedule preventive and corrective maintenance at the ideal time.
- Better routing: your dispatchers can say goodbye to manually planning routes based on the different stops for each driver.
And this is just the tip of the iceberg. The right software and technology are the foundation of any efficient fleet management team in this day and age.
If you’re looking to take advantage of this in your own company, we cover how you can utilize it in the next section.
How to use fleet management software to optimize your fleet
Want to spend less on fuel and maintenance and get more work done with the same number of fleet vehicles? The right fleet management system can help you achieve that.
Find the right software and hardware
The right solution depends on your industry, fleet size, whether your fleet is private or not, and a variety of other factors.
The first thing you should consider is whether the system offers unique features that can help your company improve the efficiency of your operations.
For example, if you want important data points like actual fuel usage, braking, idling, engine fault codes, etc., it’s important to invest in physical fleet trackers in addition to cloud-enabled software, not the cheapest app-based solution.
- Automated ETA notifications to your customers (that improve the customer experience and reduce the number of incoming service calls)
- Automated maintenance notifications based on mileage and other usage data. You can also set up alerts for specific engine fault codes
- Ability to automatically schedule work more efficiently to utilize your fleet better and keep your staff happy and healthy
- Accessible from any device, anywhere
If you set up video telematics with CalAmp Video-Based Safety, our software will automatically record and tag video clips based on events like sudden braking or rapid acceleration.
Use the data to identify potential efficiency issues
Of course, just setting the software up isn’t enough. Once you get access to all these new data points, you need to use them to your advantage.
Here are a few places to start:
- Look at the fuel efficiency of your drivers. If it’s inconsistent or bad in general, dive into the data. If you see high instances of rapid acceleration, sudden braking, and jittery driving, it may be time to start a safe/efficient driving program.
- Analyze the routes that your drivers take to fulfill key routes for long-term clients or common deliveries. Try to identify a better path. Any minute you can save will compound over the months and years.
- Check that you’re evenly distributing orders and that your drivers all have manageable workloads.
Streamline scheduling and communications with automation
Once you’re up and running, you should also take full advantage of any automated schedule optimization features and automated notifications to help make your operation more efficient.
For example, instead of dispatchers guessing the location of a vehicle and driver, they can set a geofence and get notified when a vehicle enters or exits a specific geographic territory.
Boost safe driving rates with video telematics
While collecting quantitative data is a good place to start, video is the essence of qualitative data. By seeing how your drivers react in high-pressure situations, you can identify potential issues and fix them before they lead to real problems or accidents.
Overcoming common fleet management challenges
Even with brand-new software installed, you still have your work cut out for you with rising fuel costs, driver shortages, and other issues. Here’s how you can overcome some of the most common challenges within fleet management.
Rising fuel costs
In 2022, the average diesel prices in the US hit historical highs of over $5 per gallon, which means that fuel is starting to make up a disproportionate part of the cost per mile.
That means it’s more important than ever to improve fuel efficiency. Here’s what you can do from a fleet management perspective:
- Promote efficient driving habits (slow and steady acceleration, maintaining lower speeds to reduce drag, etc.)
- Identify the optimal routes for each vehicle to reduce the required mileage.
- Automatically schedule tire pumping and preventive maintenance to maintain the ideal level of tire inflation for each vehicle.
With the shortage of drivers across multiple industries, it can be hard to maintain a fully staffed fleet at all times. Here’s how to get the best from your team:
- Efficiently distribute orders, so no driver is overworked (and no driver is underworked).
- Create a positive culture and work environment where drivers feel respected and heard, rather than faceless extensions of the vehicle they sit in.
- Create a fleet safety program that rewards drivers with exceptional driving behavior using Driver Scorecard technology.
Fleet management is a crucial discipline for companies in a wide variety of industries. It can help them cut operational costs while simultaneously getting more work out of their vehicles and staff.
One of the best ways to kick-start your goal of efficient truck fleet management is to invest in fleet management software.
CalAmp Fleet Telematics is a state-of-the-art fleet management solution that leverages our telematics device, cloud platform and easy-to-use application to deliver real-time data and help you optimize fleet utilization and maintenance using smart scheduling and automated reminders.