The benefits of a strong fleet management program cannot be overstated.
Fleet activities are such a large cost center for most businesses that failing to manage them correctly can cost a business thousands, even tens of thousands, of dollars or more each year. And that figure only goes up as fleets grow.
Essential technologies (i.e., fleet management software, telematics, and fuel card software) play a crucial role in keeping everything running smoothly and controlling costs, but those aren’t the only benefits that the business can enjoy.
In this article, we discuss the benefits of effective fleet management and the best practices that help make it all work.
Table Of Contents
- Benefits Of Fleet Management
- Fleet Management Best Practices
Benefits Of Fleet Management
1) Appropriate Fleet Size
An effective fleet management program recognizes that the number of vehicles on the road and the size of those vehicles can have a direct impact on many of the largest expenses that a business will face (e.g., fuel, maintenance, compliance, etc.).
Fielding the appropriate size fleet for a business can help reduce costs pretty much across the board and make it easier for managers to utilize vehicles to their full potential.
2) Reduced Fuel Costs
One of the biggest benefits of effective fleet management is the reduction in fuel costs that can come when owners and operators use fleet management software, telematics, and fuel card software to control the expenses inherent in putting vehicles on the road.
Even if the only tech that a fleet uses is fuel card software, the business will enjoy extensive control over everything fuel-related and will likely see a significant reduction in overall fleet expenses.
3) Increased Productivity
Implementing a fleet management program can help improve efficiency in all aspects of an operation and help the business increase its overall productivity.
In many cases, these increases in productivity are made possible by technologies that allow managers to monitor all aspects of fleet activities quickly and easily, including:
- Fleet management software
- Telematics
- Fuel card software
- GPS
- Vehicle diagnostics and maintenance software
- Driver monitoring systems
- Electronic logging devices (ELDs)
4) Improved Driver Safety
Telematics technology can monitor driver behavior and provide real-time feedback on potentially dangerous vehicle operation, including:
- Speeding
- Heavy acceleration
- Harsh braking
- Fast cornering
- Extreme variable speeds
- Small following distance
With safety as a priority, businesses can work to avoid costly accidents and protect not only their vehicles, but also their drivers and those who share the road with them.
5) Increased Transparency
Transparency is important for businesses of all types and sizes.
An effective fleet management program that includes essential technologies such as fleet management software, telematics, and fuel expense software makes it possible to achieve transparency in three key directions:
- From drivers to management
- From management to drivers
- From business to customers
This type of full transparency can provide managers, employees, and customers with the information they need and help them interact more effectively so the business runs as smoothly as possible.
6) Extended Vehicle Lifespan
Another major cost center for fleet-based businesses is managing vehicle repair and overall lifespan.
Fleet management systems can help businesses use technology to design and implement repair programs based on numbers such as mileage or engine hours rather than a vague notion that it’s time to change the oil.
This proactive approach can help prevent small issues from becoming bigger (and more costly) issues and make it easier for businesses to avoid the catastrophic breakdowns that can cripple a fleet.
7) Real-Time Tracking
Real-time tracking in the form of GPS, telematics, and driver monitoring technology allows managers and dispatchers to see what’s happening to business assets and employees while they’re on the road.
This can be helpful for all manner of cost-cutting and process-improving activities, including:
- Warning of adverse weather conditions
- Avoiding traffic
- Rerouting
- Changing destinations
- Providing accurate ETAs
- Deterring theft
Real-time tracking is especially important in effective fleet management because it can help prevent unnecessary travel and the fuel costs and wear and tear that come with it.
8) Enhanced Route Optimization
Fleet management software can help managers analyze traffic data in real time with an eye toward customizing routes that save time and fuel while also improving on-time delivery and arrival rates.
While the variables that affect route optimization are many, modern technology allows fleet managers and dispatchers to consider important factors like:
- Traffic conditions
- Approved roads (for semis and other large vehicles)
- Fuel requirements
- Deadlines
- Driver proximity
- Number of stops
- And many more
With these factors in mind, a business can create static and dynamic routes that work best while still having the option to monitor things in real time and redirect if necessary.
9) Decreased Administrative Burden
Fleet management systems that include telematics and fuel expense software can automate and streamline many of the administrative tasks that monopolize managers’ time, including:
- Tracking fuel receipts
- Maintaining mileage logs
- Renewing vehicle registration
- Monitoring maintenance schedules
Automating these tasks can free up a big portion of a fleet manager’s time so they can focus on other important issues having to do with the business.
10) Streamlined Maintenance Scheduling
Fleet management software in combination with the data provided by telematics can streamline the maintenance scheduling process so that essential repairs and checkups don’t fall through the cracks.
Preventative maintenance can save businesses both time and money and help ensure that vehicles are available where and when they need to be to keep operations running efficiently.
11) Valuable Data Collection
Fleet management software, telematics, and fuel card software can be set up to collect valuable data about:
- Vehicle location
- Vehicle performance
- Current vehicle condition
- Driver behavior
- Fuel consumption
- And many more
Armed with this data, managers and administrators will be better positioned to identify positive and negative trends, improve efficiency and productivity, and make better decisions for the fleet and the business as a whole.
12) Better Customer Service
When a business can harness the power of essential fleet technology to track vehicles in real time, optimize routes on the go, and provide real transparency into its activities, customer satisfaction may improve in the process.
This overall boost to customer service can benefit the business in many ways.
Fleet Management Best Practices
1) Track KPIs
Fleet management software can provide a lot of data — so much so that those trying to put it to use can get lost and lose sight of what’s important.
Rather than leaving it all up to chance, owners should first establish key performance indicators (KPIs).
KPIs can help managers and administrators find what they’re looking for in the mass of information that will come rolling in when technologies go online. KPIs can also help managers evaluate whether or not the changes they implement are effective.
For more harnessing the power of data in a fleet-based business, take a few minutes to read this article from the Coast blog: 16 Crucial Fleet Management KPIs Managers Should Track.
2) Streamline IFTA Reporting
Abiding by the rules and regulations put forth by the International Fuel Tax Association can be complicated and, if done incorrectly, can lead to unexpected expenses that can cut into a business’s bottom line.
Managers should be encouraged to use fuel expense software to streamline IFTA reporting so that it doesn’t fall through the cracks and potentially cost businesses money in fines and penalties.
For more on the ins and outs of IFTA regulations, check out this article from the Coast blog: International Fuel Tax Agreement (IFTA): Fleet Owner’s Guide.
3) Simplify Fuel Purchases
Fuel purchases are essential for the continued operation of a fleet. But those purchases don’t have to (and shouldn’t) be difficult for drivers to execute.
Yes, managers want to maintain control over expenses and keep accounts secure, but the process of putting fuel in the tank shouldn’t be a major roadblock in a driver’s workflow.
Advanced fleet and fuel cards (and the software that comes with them) can help businesses simplify fuel purchases with easy-to-manage distribution and card activation so drivers don’t have to jump through hoop after hoop and can just focus on filling up and getting back to work.
4) Calculate Total Cost Of Ownership
One of the best things fleet owners and managers can do to build an effective fleet management system is to calculate total cost of ownership (TCO) and use it as a benchmark to help control business activities.
Total cost of ownership is calculated with the following formula:
Total Cost Of Ownership = Fixed Vehicle Costs + Variable Vehicle Costs
Fixed vehicle costs typically include things like lease payments, insurance, and permits, while variable vehicle costs include things like fuel, tolls, maintenance, and repairs.
Easier, More Effective Fleet Management With Coast
One of the best ways to build an effective fleet management program is with Coast.
The Coast fuel card and associated fleet software gives owners and operators everything they need to keep the total cost of ownership under control, including:
- Open-loop capability
- Fuel discounts
- Rebates
- EMV chip
- Secondary security verification
- Card-level controls
- Easy assignment and distribution
- Responsive customer service
- Automated receipt collection
- Virtual cards
- Customizable spending rules
- Integrations
- And much more
To learn more about how Coast can help make fleet management easier, visit CoastPay.com today.
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