What Is Fleet Management: Benefits, Challenges, and Digital Solutions

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Fleet management is an effective way for businesses to increase the productivity of their fleet operations, while also reducing costs associated with fuel consumption and vehicle maintenance. When combined with a digital solution such as Fleet Management Software, fleet managers are able to automate their driver and vehicle management to ensure maximum efficiency.

What Is Fleet Management?

Fleet management incorporates multiple processes that enable fleet managers to take complete control of their business’s entire fleet operations. Whether managing a fleet of commercial vehicles manually via spreadsheets or using an automated computerized system, the objective of fleet management remains the same; to maximize productivity and efficiency while reducing costs.

Managing a fleet of any size consists of various tasks that span from asset acquisition, vehicle maintenance, driver safety, route optimization, and compliance with transport regulations.

What Is Fleet Management?

Although seemingly overwhelming, the actions required for managing a fleet can provide managers with the data they need to make informed decisions. This data allows businesses to:

  • Reduce vehicle downtime through preventive maintenance
  • Ensure vehicles are scheduled for MOTs and services
  • Reduce fuel costs and consumption
  • Increase productivity through route optimization
  • Improve driver behaviour through key performance indicators (KPIs)

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The Challenges of Fleet Management

With numerous factors to consider and tasks to action, managing a pool of commercial vehicles – whether five or 500 – can be challenging for any experienced or new fleet manager.

As well as managing a team of drivers and ensuring general operations run smoothly, there are also uncontrollable external influences that affect the way a fleet operation works. These include consistently fluctuating fuel prices, an uncertain car market, and changes to transport and safety legalisation.

Besides dealing with external factors, typical challenges facing a fleet operation lie closer to home.

Tracking Vehicles and Drivers

Driven by the use of fleet telematics and GPS trackers, the ability to have complete visibility of an entire fleet in real-time is essential for businesses looking to maximize productivity. But, without these tools, visibility becomes blurry. Fleet managers have to rely on the word of drivers and customers to gauge a vehicle’s location, know if a delivery or service has been successful, and if a driver has kept to a pre-planned route.

Monitoring Driver Behaviour

From incurring speeding fines to excessive fuel usage, a driver’s behaviour can have a direct impact on the costs of any fleet operation. A driver can drive fuel expenditure by idling, harsh braking, harsh acceleration, and diverting away from pre-planned routes. These are factors that can’t directly be measured on a spreadsheet and won’t be made aware of until payments are due.

Typical costs of a fleet operation

Ensuring Vehicle Maintenance with Fleet Management

As well as scheduling MOTs and services, vehicles also need to be properly maintained to avoid any lengthy repairs and subsequent downtime. Ensuring maintenance is carried out on vehicles is essential for avoiding any delays that may hamper operations, as well as avoiding high costs. An estimated £727 is lost per day per vehicle in the UK because of maintenance downtime.

Staying Compliant with Transport Regulations

In preparation for audits and insurance claims, a paper trail for each vehicle is required. This means documents such as safety checks, service reports, and maintenance history records need to be stored. With regulations changing, businesses also need to keep on top of legal requirements. A recent law that came into practice in 2017 was the Electronic Logging Device (ELD) mandate, which requires commercial vehicle operators to record Hours of Service (HOS) electronically.

Preparing for Future Fleet Management Trends

On top of maintenance requirements, legal compliance, and driver safety, businesses also have to be mindful of future trends in the transport industry. This includes planning for the use of autonomous vehicles (AVs) and electric vehicles (EV).

What Are the Responsibilities of a Fleet Manager?

In order for a business’s fleet processes to run smoothly, a fleet manager or fleet director should be installed. This role is key for ensuring KPIs are met, productivity is maximized, and costs are kept under control.

A fleet manager’s responsibilities typically include:

  • Vehicle dispatch and scheduling
  • Reducing vehicle fuel consumption
  • Ensuring driver safety
  • Understanding transport regulations and compliance
  • Setting KPIs to measure success
  • Practising inventory and spare parts management
  • Ensuring vehicles are regularly maintained and serviced
  • Acquiring vehicles, drivers, and other assets
  • Ensuring fleet operations run as smoothly as possible

Being responsible for the management of a fleet, whether small or large, is no easy task and can be somewhat overwhelming. This is why, to ensure a fleet manager is able to optimize their processes, an automated solution is preferable. In fact, 75% of fleet managers will rely on a digital fleet management system.

The Benefits of Digitizing Fleet Management Processes

The purpose of Fleet Management Software is to automate and ease the multiple tasks associated with managing commercial vehicles. By providing a central database full of real-time data and performance metrics, a digitized management system helps fleet managers to make informed decisions based on reliable and accurate information.

As well as improving efficiency, productivity, safety, and overall quality of service, Fleet Management Software provides various benefits for fleet operations of all sizes. These include:

  • Tracking vehicles in real-time with fleet telematics
  • Setting and tracking KPIs for driver behaviour
  • Reducing reactive maintenance costs
  • Building preventative maintenance schedules for vehicles
  • Scheduling vehicles for MOTs and services
  • Reducing fuel consumption and costs
  • Planning efficient route and load optimization

The benefits that a business can reap from the introduction of Fleet Management Software are only possible with the right features. Although some SaaS packages come with the option to customize a software’s toolset, there are features that are common with all fleet management systems.

Real-time GPS Tracking

The use of GPS trackers and fleet telematics is essential to help visually monitor the location of vehicles and drivers in real-time. Prior to this, businesses would rely on word-of-mouth regarding a driver’s whereabouts and if a vehicle had successfully reached a destination on time. By using GPS technology, fleet managers are able to:

  • Track and locate vehicles in real-time
  • Optimize best routes for drivers
  • Identify obstructions such as traffic and roadworks
  • Know if a vehicle is idling for an excessive amount of time
  • Track unauthorised movement from a pre-planned route

KPIs

In an attempt to increase efficiency and reduce costs, fleet managers will set various KPIs for drivers. With real-time data collection from vehicles, they can see if drivers are meeting their performance targets. KPIs typically include metrics such as idling times, time on site, and driving behaviours.

Using fleet management tools to set KPIs

Route Optimization

Route planning is used to determine the shortest and most efficient route for drivers. Its purpose is to help save on fuel costs and minimize vehicle usage by reducing the number of miles needed to travel. There are various factors that determine a strategy for route planning, including:

  • Vehicle capacity
  • Road traffic
  • Drop points
  • Delivery windows

The tools found in a fleet management system also allow fleet managers to set up GEO fences, which alerts them if a driver has veered from a predetermined route.

MOT, Service, and Maintenance Scheduling

Ensuring each vehicle is routinely serviced and maintained is crucial for reducing repair costs and avoiding downtime. Computerized systems allow businesses to collect vehicle data and store it in a centralized system, creating an effective preventive maintenance schedule for all vehicles. Stakeholders can also be automatically notified when a vehicle’s insurance policy, warranty, MOT, or service is about to expire.

Installing a preventive maintenance schedule can be so effective that, in 2017, Royal Mail improved the downtime of their 50,000 vehicle fleet by 26%.

Fuel Management

Fuel management is used to monitor a vehicle’s excessive fuel burn and idling activities in a bid to reduce spending. Not only does this allow fleet managers to highlight the vehicles that are consuming more fuel than others, but it can also alert them to how much fuel is being used in real-time and when a company fuel card has been activated.

With fuel consumption being one of the largest expenses on a business’s balance sheet, any form of cost-saving is welcomed. According to the Energy Saving Trust, if a vehicle doing 12,000 business miles per year reduces its mileage by 10%, £150 could be saved in fuel costs alone.