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Fleet Management

Fleet Services: The Complete Guide For Managers

Fleet services help a business manage their vehicles and control costs. Discover the benefits of this service and whether it’s right for your company.

If you manage a business that includes the use of cars, trucks, vans, or other vehicles as part of its daily activities, you’ve probably heard the term ‘fleet services’ once or twice.

For someone who works every day to keep drivers and vehicles on the road, maintain safety, and control costs, a lot could go into those two simple words. So, what exactly are fleet services, and should you engage them for your business?

In this article, we’ll answer those questions and introduce you to an aspect of fleet services that will help you manage your vehicles better on your own.

Table Of Contents

Fleet Services Defined

Fleet services are resources offered by some leasing and management companies that help a business select, maintain, optimize, and manage their vehicles.

In essence, engaging fleet services is like hiring a dedicated fleet manager to handle the day-to-day activities and requirements of all the drivers and vehicles in the field.

Components Of Fleet Services

Virtual map experience

1) Vehicle Selection

Selecting and acquiring the right vehicles for your business is one of the first solutions that fleet services provide to most businesses.

It all starts with analyzing the day-to-day activities of your company to determine what type and size of vehicle best fits the needs of your drivers and customers. Consider the following questions:

  • Do the demands of your business necessitate hauling a lot of tools and supplies in a work van?
  • Does your business need the expanded cargo and towing capacity of a pickup truck?
  • Would the heavy-duty towing and hauling capacity of a semi-truck be more useful?
  • Does a car or SUV provide enough features and capabilities that you don’t need to spend money on these larger options?
    What will the future needs of your business be?

The answers to those questions will directly affect your bottom line in the form of vehicle payments, fuel costs, registration procedures, maintenance, and a whole host of other variables, so it’s important to perform a thorough analysis before making a decision.

Fleet services will know how to go about finding the best vehicles — or combination of vehicles — for businesses of all types and sizes.

2) Fleet Acquisition

Fleet services from a commercial van

Once you’ve decided on the cars, trucks, vans, or semis that are right for your business, fleet services will also work to find and acquire those vehicles for you.

And, more than just finding the right commercial vehicles, fleet services also help you get the best possible price for everything you need.

3) Fleet Insurance

In many cases, fleet services will also help your business obtain the right insurance for the vehicles you choose. That can be a difficult job because fleet insurance is significantly different from regular insurance.

Many variables affect what you’ll end up paying for coverage, including:

  • The types of vehicles in your fleet
  • The age of the vehicles
  • The condition of the vehicles
  • The value of the vehicles
  • The intended use of the vehicles
  • The advanced options you choose

And then your business has to decide on how much insurance to get. Does it need only bodily injury or only property damage? Or, would it be better served with a combined policy that includes collision, comprehensive, and uninsured motorist?

Fleet services will be able to help you settle on just the right policy for your expanding fleet.

4) Maintenance And Repairs

A big part of keeping a fleet of vehicles on the road is developing a plan for their maintenance and repair.

This goes beyond just fixing them when they break down to include the types of maintenance that can prevent small issues from becoming larger, more expensive issues.

With fleet services, you can create a plan for your fleet based on the two most important variables that affect daily-use vehicles: miles traveled and date since last service.

Keeping track of these variables can be a full-time job in and of itself, and the more vehicles your business operates, the more difficult and complicated the job gets.

For example, a semi-truck that runs between Chicago, IL and Boulder, CO on a regular basis will need more maintenance and service more often (i.e., a mileage-based plan) than a delivery van that is only on the road two or three days a week.

That’s why it’s so important to create and abide by a plan that is right for the type of vehicles your business uses (e.g., cars, SUVs, vans, pickups, semis).

Fleet services may even go a step further and help you create more specific plans for each of the different individual vehicles that your business operates.

So, instead of having one plan for all the vans and another plan for all the semis, you will have different plans for van A, van B, and van C, as well as different plans for semi A, semi B, and semi C.

With help from fleet services, your business will be better equipped to keep all its vehicles safe, compliant, and in good working order for as long as possible.

5) Fuel Cost Controls

Fleet fuel card being used

Another significant component of fleet services is the ability to help your business control fuel costs — the largest ongoing expense that most fleet-based businesses will face.

Those controls may run the gamut from simple to complex and include such strategies as:

  • Monitoring tire inflation
  • Cleaning vehicles more often
  • Cutting the weight of the vehicles (e.g., how much weight they regularly carry)
  • Incorporating aerodynamics
  • Stepping down to smaller vehicles if business needs change
  • Reducing the total number of vehicles in your fleet so all get maximum use

While monitoring tire inflation and cleaning vehicles more often aren’t that difficult to implement, incorporating some of the other strategies requires a detailed analysis of the way your fleet operates.

Many businesses don’t have the experience or the technical know-how to make this happen. Fleet service businesses do. They can even help your business identify driver behaviors that, once changed, can result in significant fuel savings.

For example, you may discover that your drivers are idling their vehicles a lot and accelerating quickly from a dead stop. Both of those behaviors use more fuel than necessary.

Thankfully, with a little training, drivers can change those behaviors fairly easily and, in the process, save money at the pump.

Engaging fleet services to help reduce and control fuel costs in this way is one of the most beneficial steps that most businesses can take.

6) License And Title Management

Operating a fleet requires that you comply with all local, state, and federal registration and license requirements.

If these details aren’t kept current, your business can face hefty fines and disciplinary downtime from a number of local, state, and federal organizations.

For a manager dividing their attention between supervising a fleet and another sector of your business, it can be easy to lose track of license, registration, and inspection deadlines.

Fleet service professionals, on the other hand, can focus exclusively on fleet-related issues so that annual, semi-annual, or quarterly events like this don’t go forgotten.

7) Equipment Leasing

fleet services

Another component of some fleet services that can help your business get ahead is equipment leasing.

In some cases, your business may have the money ready to pay for (i.e., purchase) the fleet vehicles it needs. But does that make the most financial sense for the organization?

From an accounting standpoint, a lease is now considered committed capital (the same as ownership). But, with a lease, you don’t have to part with all the money all at once as you would if you purchased the vehicles outright.

So, the choice between outright ownership and leasing comes down to cash flow and how your business can benefit from redirecting capital into other sectors.

The financial flexibility that leasing may provide can help your business keep up with changing technologies and opens the door to tax advantages that you might not have had access to otherwise.

Other advantages may include:

  • Lower monthly payments when compared to a loan
  • A fixed financing rate instead of a floating rate
  • Access to more working capital
  • No need for high down payments

Keep in mind that not all fleet service providers offer leasing programs. But a quick internet search will reveal leasing options in your area — including major vehicle manufacturers, such as Ford, GMC, and Chevrolet.

8) Fleet Monitoring And Data Analysis

Some comprehensive fleet services programs also offer fleet monitoring in addition to the other components on this list.

This service can alleviate a lot of the stress and strain that goes into managing your fleet because it allows you to focus on the day-to-day issues that your business is facing rather than the sometimes-overwhelming amount of data that your vehicles produce.

Fleet monitoring involves collating GPS and on-board diagnostic data (provided by telematics) and analyzing the data for a wide variety of purposes, including:

  • Optimizing routes
  • Monitoring driver behavior
  • Scheduling preventative and mandatory repairs
  • Managing fuel consumption
  • Keeping up with compliance requirements (more on this in the next section)

This data also allows you to calculate two very important fleet variables: total cost of ownership and vehicle cost per mile.

Total cost of ownership (or TCO for short) is all the expenses that go into operating a single vehicle — including both fixed vehicle costs (e.g., payments, insurance, licenses, and permits) and variable vehicle costs (e.g., fuel, tolls, and maintenance).

Conducting a total cost of ownership on every vehicle in your fleet gives you all the information you need to then figure out the total cost of operation for the entire fleet (e.g., TCO for vehicle 1 + TCO for vehicle 2 + TCO for vehicle 3, etc.).

With that information, you can then figure out vehicle cost per mile (Total Cost Of Ownership / Total Miles Driven) and work on ways to lower that number in order to reduce the overall expenses that your fleet accrues every day.

Without the insight that fleet monitoring and data analysis can provide, your job would be much more difficult, take up much more time, and leave you with fewer opportunities to improve the way your business works.

9) Compliance

Fleet managers and their staff have a lot to do to keep the business running smoothly and managing the compliance of all your vehicles can be a full-time job in itself.

Fleet services can make that job easier by reducing the workload that falls on your shoulders and ensuring that all the commercial vehicles you operate are safe and up to government standards.

If a vehicle in your fleet is out of compliance, the Department of Transportation (DOT) and the Federal Motor Carriers Safety Administration (FMCSA) can impose hefty fines on your business that can cut into your profits.

In addition to DOT and FMCSA regulations, drivers and fleet managers have to contend with Commercial Vehicle Safety Alliance (CVSA) compliance checks.

If an asset doesn’t reach their standards for operation, your business can accrue some rather serious fines, and the vehicle can be removed from service until you complete the necessary repairs or maintenance.

Having vehicles out of service — when they could be on the road making you money — is something that every business wants to avoid.

You can ensure that all your vehicles are compliant with federal standards with the help of a fleet services company that offers it as part of their program.

Should You Use Fleet Services?

Fleet of vans

The answer to the question, “Should you use fleet services?” is different for every business and depends on what’s right for you, your team, your customers, and your company.

You could, of course, hire your own dedicated fleet manager or, if your fleet is small enough, continue to employ an existing manager (e.g., an HR, manufacturing, or inventory manager) to do the job on top of their other responsibilities.

The latter, however, is only viable up to a certain point, after which, your business will be better served by hiring a fleet manager or engaging fleet services.

How do you know when your business has reached that point?

Here are some of the signs.

1) Your Fleet Consists Of 10 Or More Vehicles

For many fleet-based businesses, when the number of vehicles on the road reaches 10 or more, coordinating those vehicles can become so complicated and time-consuming that one person can no longer deal with it on a part-time basis.

So, for example, if a manager in your HR department has been coordinating fleet activity in addition to supervising the customer service side of the business, when your fleet reaches or exceeds 10 vehicles, the workload may become too much for them to handle.

It’s at this point that you may want to consider hiring a full-time fleet manager and, in some cases, even contracting with a fleet services company to help manage the logistics, vehicle readiness, and day-to-day operations of your business.

This rule isn’t set in stone — your staff may be able to handle 10 or more vehicles — but it provides a good metric you can use to decide if it’s time to look into implementing some type of fleet services.

2) Maintenance And Repair Costs Are Rising

As your fleet grows and vehicles age, maintenance costs can begin to rise. If you notice that those expenses have gone up in recent months, it may mean you need to develop better programs to stay ahead of major breakdowns.

That’s where fleet services come into play.

By analyzing vehicle data and business needs, a fleet service program may be able to come up with ways to keep maintenance and repair costs down. That’s good for your fleet and your bottom line.

So, whether the solution is creating better preventative maintenance schedules, finding different mechanics to do the work, or hiring an in-house crew to keep the vehicles in good working order, fleet services can give the issue the time and energy it deserves.

3) You’re Consistently Missing Vehicle Parts And Supplies

check engine light on

If you find that your fleet vehicles are often short on the parts and supplies they need to operate safely and efficiently, it may be time to contract with outside services.

One of the first things to fall by the wayside when an employee is pulling double duty — i.e., coordinating the fleet and overseeing another part of the business — is keeping parts and supplies in stock.

This is especially true as shortages and delays in pretty much every market make this task even more complicated.

In many cases, maintaining inventory of parts and supplies can get pushed off until tomorrow so the employee can deal with something else in the business that needs their more immediate attention.

If this happens often enough, it can become extremely difficult for your drivers to do their jobs.

A fleet service company doesn’t have to spend time managing another part of the business. They can focus on keeping your fleet in good working order and making sure that your drivers have what they need to do their job right the first time.

4) You’re Starting To Miss Compliance Deadlines

We discussed the importance of compliance earlier in this article and how it involves juggling a lot of moving parts.

If details such as local, state, and federal registration and inspection requirements aren’t kept current, your business can face hefty fines and punitive downtime from a number of different organizations.

Even for a full-time manager and their staff who aren’t dividing their attention between supervising the fleet and another sector of the business, it can be easy to lose track of registration and inspection deadlines.

Fleet services, on the other hand, can focus exclusively on fleet-related issues so that annual, semi-annual, or quarterly events like this don’t go forgotten.

5) Driver Performance Is Deteriorating

Whether you’ve got a full-time staff or not, driver performance is another one of those issues that, with a certain size fleet, can become extremely difficult to manage yourself.

If you notice your drivers starting to perform below company standards — where just a few weeks or months earlier, they were meeting or exceeding those standards — it might be time to incorporate fleet services into the mix.

They may be able to analyze the situation and address the issues that are causing driver performance to deteriorate.

While a drop in driver performance doesn’t always indicate a need to hire an outside company to help, it — along with the other signs on this list — can serve as a clear sign that something needs to change.

Engage Fleet Services When It’s Right For Your Business

Keep in mind that your business doesn’t have to experience all of these signs before you start thinking about using fleet services.

Your business may choose to make the switch when you hit five vehicles in service — and everything else is going great — because you foresee rapid future growth and you want to be ready.

The signs mentioned above are useful metrics, but they’re not set in stone. Again, it all depends on what’s best for your business.

Take the time to analyze your fleet operations and talk to a number of fleet service companies to see what kinds of solutions they can offer. You’ll then have a better idea of how well your fleet is operating and when it may be right for your business to transition to outside support.

Fleet And Fuel Management Made Easy

Fuel Management Made Easy with Coast card

Whether you choose to hire another company to provide fleet services or not, one of the best ways to control the costs associated with keeping your vehicles on the road is by using Coast.

The Coast fleet card provides controls and visibility that work for your business, as well as an online expense management platform that empowers you with real-time information related to your fleet.

For more information on how Coast can help you control fleet costs and streamline your fleet management program, visit CoastPay.com today.