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Top 10 Benefits of Fleet Management
Published date:
November 15, 2022
Top 10 Benefits of Fleet Management
A fleet consists of countless moving parts that must work together to function properly. You can think of it like an orchestra, filled with different musical instruments that rely on a conductor to turn the potential chaos into harmony.
In that regard, the benefits of fleet management—the acquisition, budgeting, vehicle maintenance, and monitoring of a group of big rigs—can’t be overstated. Fleet management is essential for a fleet operation seeking long-term success, and modern fleets depend on fuel card management systems to make the business engine run.
Here are 10 reasons why fleet management practices and technologies matter.
#1 Remote Fleet Management
With fleet management software, you can remotely control daily fleet operations from a central command hub, even as fleet vehicles disperse across the country. GPS fleet tracking gives fleet managers real-time visibility over every vehicle.
The ability to monitor fleet movement as it happens makes it possible to:
- Redirect vehicles as needed
- See job completion status at a glance
- Estimate arrival and delivery times
This visibility can result in better customer service and save time, since you no longer need to radio drivers or have them check in to receive status updates.
#2 Better Insights
Every single vehicle in your fleet can generate massive quantities of data. But all of that information is irrelevant if it’s not properly organized and then directed to the corresponding channels.
Remote fleet management systems can streamline data flows so that you receive timely and accurate information. From there, you can analyze the data—from both a high-level and a granular perspective—to produce actionable insights you can apply to create a competitive advantage.
Meanwhile, automated insights enable you to make better decisions in order to hit KPIs—the over-time metrics that determine fleet performance at a peak capacity. If there are areas for improvement, reports give professional drivers specific, actionable steps they can take to hit their benchmarks.
Additionally, fleet management technology provides an array of tools, charts, and customizable dashboards that fleet managers can leverage to continuously optimize each level of operation. Within the system, you can see how much each vehicle costs, how much value it provides, and then make improvements or changes as needed.
#3 Accounting Software Integration
Instead of manually transferring relevant fleet information via data entry, modern fleet management systems can automatically integrate tax and reporting information with accounting software.
This integration can result in the following benefits:
- By cutting back on manual data entry, accounting software can improve efficiency and reduce employee frustration.
- With less time spent on data entry, employee productivity increases, allowing them to focus on tasks that actually require their expertise.
- Manual data entry is prone to human error, but automated accounting can improve your data accuracy. Accurate data enables you to make the best decisions and ensure you pay all the taxes you owe.
- Digital accounting makes it easier to retrieve data quickly without sacrificing security.
#4 Fuel Consumption Control
Do you know exactly how much your operation is spending on fuel?
Fuel cost tends to be one of the largest expenses within a fleet’s budget. Strict control of fuel consumption is critical to sustainable fleet fuel management and logistics. But it can be difficult to track and budget for fuel with fluctuating prices, among other variables. In addition, the calculus involved goes far beyond a simple miles-per-gallon metric.
For example, consider the impact idling can have on fuel consumption. In some cases, idling may be completely justified, while in others, it could be excessive. Parsing the difference between the two is impossible without the relevant fleet tracking data.
Similarly, if a driver regularly exceeds their daily mileage limit, it could occur for one of several reasons—including dangerous driving, poor route planning, or unexpected route changes.
A fleet management system puts you in the cab with the driver to provide fuel usage insights. Your operation can then leverage these insights to improve your fuel cost management by:
- Improving driver behavior
- Changing idling behavior
- Optimizing fleet routes to reduce total miles driven
- Monitoring traffic and weather conditions
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#5 IFTA Compliance
If your fleet operates within Canada or the contiguous United States, you’re legally required to abide by the International Fuel Trade Agreement (IFTA). 1
What is IFTA? It is a fuel tax collection and sharing cooperative agreement between the U.S. and Canada that requires that every motor vehicle “used, designed, or maintained to transport people or property” take the following actions:
- Apply for an IFTA license – This must be done in your home state—the place where the vehicle is registered and the fleet is managed by the corresponding fleet operator.
- Place decals on the truck – IFTA decals must be placed on both the passenger and the driver side of the cab.
- File quarterly reports – The vehicle owner must submit an IFTA report every 90 days.
- Pay taxes – Owners are expected to pay IFTA taxes by the relevant deadlines.
Efficient fleet management companies help simplify the documentation and reporting processes, making it easier to file quarterly reports and ensure that you are paying the right amount of taxes. Interested in learning more about who qualifies for the fuel tax credit? Read our blog about it.
#6 Managing Preventative Maintenance
The importance of fleet maintenance goes hand-in-hand with expert fleet management.
The more miles a vehicle has on its odometer, the more wear and tear its various parts will accrue. As time passes and the mileage ticks up, a vehicle is more likely to break down, especially if it’s not properly cared for.
In most cases, it’s much cheaper to perform proactive maintenance than wait for a part to break. Part failure can have negative downstream effects throughout the entire vehicle. For example, a small issue with the tires can damage the axles, which then impacts the brake suspension, and so on.
Preventative maintenance prevents minor problems from eventually wreaking so much havoc that they render the vehicle inoperable. In turn, you can avoid excessive downtime and costly repairs—or even vehicle replacements—which would help you figure out how to reduce fleet expenses.
Effective fleet management solutions can help commercial fleets prevent such issues from growing beyond your control. They rely on artificial intelligence to collect and analyze data about repairs and planned services.
Equipped with that data, you can set maintenance controls and schedules for specific parts according to:
- Mileage
- Time utilization
- Load utilization
- Driving behavior
- Road quality
- Weather conditions
- Pre and post trip inspection protocols
#7 Improved Driver Safety
Your professional drivers are the lifeblood of the company—they’re your most valuable commodity. Without them, you can’t operate.
Fleet management systems help to improve fleet safety in two main ways, including:
- Safer vehicles – Properly managing your fleet’s preventative maintenance ensures that professional drivers’ big rigs are safe and running as expected. A well-maintained vehicle is less likely to break down in the middle of a delivery, reducing the incidence of accidents and helping protect everyone on the road.
- Safer driving behavior – Fleet management systems often provide built-in driver management and behavior monitoring integrations that let you set customized alerts any time a driver makes a driving error. Perhaps they’re speeding or braking sharply. From there, you can analyze the behavior to see if there are confounding factors within the route that cause this behavior to occur, such as traffic or poor road conditions.
The fleet management practice of improving driver safety goes far beyond protecting your bottom line. It demonstrates that you value your employees and their safety. This can lead to higher levels of driver satisfaction, increased retention rates, and lower turnover.
#8 Better Purchasing Decisions
A big rig isn’t cheap. The average cost of a new semi-truck will typically run between $100,000–$200,000. 2
So, how do you make decisions about replacing an existing vehicle, or adding more trucks to your fleet?
For such an expensive investment, you can’t make this call on a whim or by using your gut instincts. You must instead rely on data to inform your decision-making, especially if you operate a large fleet with significant maintenance costs.
Fleet management systems arm you with the data you need to make optimal purchasing decisions. They can tell you the ROI of every fleet vehicle and driver, enabling the fleet manager to chart the wisest fiscal course of action to further reduce fleet cost.
#9 Improved Customer Service
Fleet management systems can make a substantial difference for your internal operations—but they can also have an impact your external customer relationships.
Fleet management systems ensure that drivers follow their schedules, stick to their routes, and deliver their cargo on time. These systems also make it possible to simplify bookings and appointments. Even further, they allow customers to track their goods and receive status updates.
Improved communication and visibility lead to a better overall customer experience, which means they’ll be more likely to work with you again if they are thoroughly impressed by overall fleet performance.
#10 Identify Fraud or Driver Inefficiency
You should always give your drivers the benefit of the doubt until they give you a reason not to. That said, driver fraud is a familiar problem within fleet logistics.
A recent study discovered that: 3
- 93% of fleet managers believe that some of their drivers are committing fraudulent activity.
- 41% of fleet managers believe that more than 10% of their drivers are committing fraudulent activity.
To that end, the most common fraudulent activities that drivers commit include:
- Misuse of their driver fuel card
- Misuse of vehicles
- Theft of vehicles
- Theft of cargo
Fleet management systems allow you to track your assets and improve driver management in real-time. In addition, they can restrict what drivers can purchase with fuel cards and flag data anomalies that might indicate fraudulent behavior.
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If you aim to continue improving and expanding your business, organizing your operations with fleet management systems isn’t just a good idea—it’s a requirement.
Want an easy way to improve your overall fleet management?
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Sources:
1 IFTA. IFTA Articles of Agreement (January 2017).
https://www.iftach.org/manuals/2017/AA/Articles%20of%20Agreement%20January%202017.pdf
2 Costowl. How Much Does a New Semi-Truck Cost?
https://www.costowl.com/automotive/commercial-construction/auto-semi-truck-new-cost/
3 Shell. Fraud Matters: United Kingdom.
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Reviewed by
Vedant Khamesra
Vedant Khamesra is the driving force behind product management at AtoB. Specializing in strategic partnerships, SMB solutions, and new product development, Vedant seamlessly navigates P&L responsibilities while leading product execution and strategy. He is fueled by AtoB's mission to empower truckers and fleets with intelligent financial tools and services, making their lives easier and more rewarding.
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