With the assistance of modern technology such as fleet GPS devices or vehicle tracking systems, fleet management has now become much easier and cost effective. Fleet management is an important and often overlooked part of many private organizations. Due to the economy, private fleet operators today are under more pressure than ever to control expenses. Optimizing your fleet’s operations can improve your company’s productivity, reduce costs and have a positive impact on the bottom line.
Fleet management includes a diverse set of tasks including vehicle financing, vehicle maintenance, fleet tracking and diagnostics, fuel costs, driver management, and health and safety management. Fleet management minimizes the risks associated with investing in and operating fleet vehicles, and helps to ensure that overall transportation expenses are kept to a minimum. Fleet management can either be assigned to someone in-house or it can be outsourced to a company that specializes in optimizing fleet operations.
Implementing an integrated fleet management system often times makes good financial sense, even for small fleets of only a few vehicles. Today’s modern fleet management software & systems create new opportunities to significantly decrease transportation and workforce costs. Despite the upfront costs of purchasing and installing fleet management software, return on investment typically occurs in less than six months. If your fleet can finance the purchase or set up a payment plan, then it may be possible to see a return on your investment in the first month.
Vehicle tracking is one of the most important components of fleet management. Modern GPS tracking devices make tracking and diagnostics easier than ever before, which will you’re your fleet more efficient and put money back in your pocket. Vehicle tracking provides a fleet manager with real time location data that can tell you exactly where each vehicle is at all times. This makes routing and dispatching much easier as it gives you the opportunity to plan the most efficient routes. This can also help to reduce waiting time for customers and therefore improve customer service.
Because fleet GPS tracking systems reduce many operational risks, your insurance premiums can be reduced. Vehicle tracking provides safety and crime prevention measures by allowing a silent alarm to be triggered if one of your vehicles is stolen or involved in an accident. If someone hijacks one of your vehicles loaded with thousands of dollars of merchandise, a GPS tracking system will enable the vehicle to quickly be apprehended by law enforcement. Or if a driver is in accident the police and emergency medical teams can respond much quicker as they will instantly be notified.
Vehicle tracking data can be used to identify high risk driving behaviors such as speeding, “jack rabbit” quick start & stops, and driving in reverse more often that necessary. Identifying and controlling these poor driving habits can reduce the chances of accidents and can also help to reduce fuel costs. Fleet managers can track individual driver profiles to identify and improve irresponsible, high-risk driving and to identify and reward safe driving habits. Speeding burns excessive fuel and by monitoring the average speed of the vehicle, even smaller fleets can achieve substantial savings in their annual fuel expenses. Also, putting an end to bad driver behavior will help your company’s public image, especially if your fleet vehicle is driving around town displaying your company’s logo.
Good investments should always pay for themselves, and with fleet management software, return on investment can come quickly. Consider a typical scenario for a fleet of 20 trucks being used 6 days per week, and traveling 120 miles per day. Average fuel consumption is twelve miles per gallon. With diesel fuel at $2.99 a gallon, as of today August 9, 2010, this distributor is spending over $3,588 a week on fuel. An easily attainable reduction in mileage of ten percent results in a savings of $359 per week. This works out to $18,658 per year in savings!
Fleet management systems also create and maintain electronic driver records which help to eliminate employee overtime costs. Let’s say drivers are paid $15 per hour, plus time and a half for overtime. Eliminating one and a half hours of overtime per driver per week can produce a savings of nearly $450 per week. This works out to $23,400 per year in savings. An overall savings of $42,058 is substantial and should be enough to start considering investing in a GPS fleet management system.
If drivers leave engines idling to stay comfortable in summer and winter months, the fleet operator is stuck with the bill. Diesel engines burn approximately one gallon of fuel per hour during unnecessary idling. Once fleet managers start monitoring, they typically find that drivers allow engines to idle needlessly for up to two hours per day. In this scenario, this behavior would cost the company $717 per week – another $37,284 per year.
Vehicle maintenance comprises a large component of fleet management. The systematic scheduling of regular servicing and repairs plus providing cars with new tires gives rise to the need for administrative software to track and record car details. By recording maintenance logs and reports, a fleet operator can easily manage a large volume of vehicles by setting notification alerts for each important milestone such as vehicle mileage. This can help to extend the life of the vehicle and keep vehicles in pristine condition until the time of disposal. It is much cheaper to maintain a vehicle than it is to replace it. Also, when it does come time to sell the vehicle, it will command a higher sales price because it has detailed service records to prove the vehicle is in excellent condition.