FLEET MANAGEMENT involves a series of diverse tasks for businesses who rely on transportation, aimed at controlling costs, productivity, efficiency and risks in vehicle acquisition, fuel management, compliance and more. It covers the scope of many industries from freight, to delivery, sales and service, oil & gas, and emergency services. In this post, we answer: “What is fleet management?” and look at how the role has evolved.
Any business that owns or leases vehicles is engaged in some form of fleet management to provide solutions for keeping operations running efficiently, remaining competitive in the marketplace and meeting their budget goals.
With constant pressure to reduce the total cost of ownership, enforce driver safety policies, minimize risks and increase productivity, fleet managers are looking to telematics technology and software that can help them confront the numerous business challenges they face.
In the US, fleet management is supported by various organizations such as NAFA Fleet Management Association (NAFA), the Automotive Fleet & Leasing Association (AFLA) and the American Automotive Leasing Association (AALA), which offer ongoing research and education, annual conferences, and partnership solutions.
Responsibilities of a Fleet Manager
Fleet managers are tasked with a wide range of responsibilities, including:
- Vehicle Acquisition— Negotiating pricing and concessions with manufacturers, as well as engineering technical solutions (particularly with trucks and equipment) become an important part of reducing costs. Consideration of the job the vehicle has to do, the load it must carry, and the geography assets operate in are necessary in forecasting and planning fleet purchases.
- Design and Manage Fuel Programs — Fuel is consistently one of the three greatest expenses in a fleet budget. Whether managing a preferred fuel network, fleet card program and/or on-site fueling, negotiated fuel programs with suppliers can directly impact a fleet’s cost per mile. Various tools, including telematics, fuel reporting and gamification are used to influence drivers to purchase fuel according to their policy.
- Design and Manage Maintenance Programs — Setting traditional preventive maintenance policies based on vehicle type, vocation and geography minimizes wear and tear, saves repair costs and aides in optimizing resale value. Maintenance programs need to consider tire programs and policies, a glass program that handles windshield repairs and replacements, managing warranty recalls and goodwill, and roadside assistance for vehicles not covered by a manufacturer warranty program.
- Support Corporate Safety Programs — Most fleet managers are passionate about safety. When an accident occurs potential negligent entrustment and brand damage come with staggering costs to organizations. Working with the executive team or a health and safety office, the fleet manager has a significant opportunity to limit a company’s liability, improve safety within the communities they operate, and positively impact the lives and well-being of their drivers. A program that proactively improves driving behaviours and reduces accidents will also result in reducing fuel and maintenance costs.
- Track Fleet Metrics — To monitor fleet activities, fleet managers typically prepare and review daily, weekly, and monthly reports measuring performance in the areas such as idling, fuel consumption, driver safety.
- Understanding and Managing Compliance — Keeping up-to-date with legislation changes and new regulations allow fleet companies to stay in compliance and avoid heavy fines. Vehicles that weigh heavier when loaded or towing, vehicles carrying hazardous materials, and vehicles carrying food, are all subject to specific compliance regulations. Many heavier commercial vehicles are required to perform driver vehicle inspections and report on them, and may also be required to keep an electronic driver log of their driving activities.
- Vehicle Remarketing — Managing a vehicle’s condition, sales channel, and the timing of the sale (when fixed and variable costs are at their lowest) is important in achieving optimal re marketing value. Keeping the vehicle in a clean, well-maintained condition, along with all accessories it was delivered with (extra key fobs, mats, headrests, etc.) all help to realize a better sale price.