So, your small business is growing every month and you’ve now gone from making field service calls in your personal car, to acquiring commercial vehicles with an in-house team of drivers. Congratulations on your success, and welcome to the world of fleet management!
On top of day to day operations and business management, this can come with a whole new set of challenges and costs, which can affect your bottom line.
That’s why we’ve put together this guide of best practices for the best way to manage a small vehicle fleet so you can assess your fleet needs and effectively manage operations.
What is vehicle fleet management?
First things first: What exactly is fleet management?
Fleet management ensures company vehicles are used safely and efficiently, and are well maintained. It includes things like vehicle tracking, fuel consumption reporting, monitoring driver behavior, route planning, and vehicle maintenance management.
If your company has between two and 50 commercial vehicles, it is considered to be a small vehicle fleet. Depending on the industry, fleet vehicles typically include cars, vans, and pickup trucks, but could also include specialty vehicles like bulldozers, tractors, or heavy cranes.
And fleet management isn’t just reserved for taxi companies or UPS. Any field service business can benefit from fleet management, whether you own a landscaping, appliance repair, cleaning company, or courier service. Once you start looking at your company’s vehicles as a fleet and dialing in your fleet manager duties, you could see a decrease in fleet operating costs and an increase in efficiency, productivity, and driver satisfaction.
What are the benefits of fleet management?
Why is fleet management so important and why should your small business consider implementing a proper fleet management system? The benefits of fleet management have a direct impact on your business’s bottom line, and can lead to increased driver efficiency, well maintained vehicles, better security, higher productivity, improved budget planning, and more, which all affect profits.
But before you’re able to take advantage of these benefits, there are some classic fleet challenges you and your fleet manager will need to overcome.
Common small business fleet management challenges
1. Fuel waste
Fuel for a commercial fleet is one of the biggest costs for a small company. It’s important to consider the potential dollars lost from wasted fuel due to mismanagement. Whether it’s poor driver performance like speeding, harsh braking or idling, unauthorized stops, or even taking company cars home for personal use, all of these can lead to increased fleet fuel costs. And without a proper fleet management system in place, there’s no way to account for this cost and hold those responsible accountable.
2. Vehicle maintenance costs
Maintaining asset reliability is at the core of effective fleet management. Not only does repairing a fleet vehicle cost you money, but it can also affect your company’s revenue. Vehicle maintenance and the subsequent downtime that results impacts delivery times, the productivity of the entire fleet, and could lead to poor client relationships, lost business, and at the worst, a damaged reputation.
3. Optimizing routes
This is a challenge that is difficult for small businesses to overcome—especially those that rely on manual routing. While some drivers’ routes will stay the same over a long period of time, in today’s business climate, it is more likely that stops and delivery sizes will change and require rerouting and re-optimization.
4. Accident management and fleet safety
According to a Stanford Law School study, about 90% of all motor vehicle crashes are caused in some part by driver error. Whether that could include reckless driving habits, distracted driving, or honest human error, driver safety is a challenge companies may face when managing a fleet—especially without monitoring systems or driver training in place as part of their fleet operations program.
5. Excessive administrative tasks
Although many small businesses still manage fleets with excel, be sure that manual admin work does not take over your job. When the better part of your day becomes slogging through paperwork, planning routes, manually adding fuel costs and the like, it may be time to explore ways to become a better fleet manager.
What does a fleet manager do?
Some companies will hire a dedicated fleet manager to oversee all fleet operations, however, this is not always necessary. Essentially, a fleet manager is responsible for maintaining compliance with company policies, logging and record keeping, managing fleet employees, scheduling, routing, maintaining fleet vehicles, and improving the overall effectiveness of your fleet.
Fleet management cost
While managing a fleet does come with some upfront costs, in the long run, you’ll thank yourself for the investment. At the very least, you’ll need to install a fleet management software or GPS tracking, which can cost as low as $15 per vehicle. Things like regular vehicle checks, maintenance and tire management will also add to your management cost, but will save you time and headaches in the future. If you choose to hire a fleet manager, this would add another expense; however, you can manage your fleet yourself with our tips below.
What’s the best way to manage a fleet of company vehicles?
If you want to avoid the pitfalls of fleet management, there are a couple of hard-and-fast rules to follow. We’ve put together a list of best practices and tips for efficient and effective fleet management:
1. Establish a fleet management program and company policies
Although you may think your fleet is running just fine, without established policies and a documented fleet management program in place, you’re likely leaving money on the road. This program could include things like personal use policies for company vehicles, tracking and evaluating vehicle or fuel costs, training programs for drivers, setting up safety rules, and setting up Key Performance Indicators (KPIs).
2. Set fleet management goals
Speaking of KPIs, setting well-defined goals can be effective in managing a fleet of vehicles, as it keeps everyone from the bosses to the drivers on the same page. Whether it’s improving vehicle utilization, better fuel management, regular vehicle maintenance, or enhanced safety for drivers, set and communicate clear goals within the company—they could be the key to your success.
3. Choose the right fleet vehicles
Choosing the right vehicles for your company’s needs is also a big area, which when done thoughtfully, could save your company money in the long run.
For example, do you find yourself constantly acquiring more cars when you could replace them with fewer vans or pickup trucks? Are you spending thousands of extra dollars on trucks and large cargo vans when a small delivery car is all you need? Are you looking for vehicles that are cost-effective when it comes to fuel, maintenance and repair, and replacement? These are all questions to think about when growing your fleet.
4. Spend your cash wisely
Acquiring new vehicles, hiring new drivers, paying for insurance, maintaining said vehicles, and eventually vehicle disposal. These are all unavoidable costs that come with the lifecycle of a fleet vehicle.
But what if you were to lease a fleet rather than purchase all your vehicles? Have you taken financing, taxes, government incentives, projected resale value and future business and operational needs into account? As a small business owner and fleet manager, every penny counts!
5. Hire qualified drivers (and provide training when needed)
When hiring drivers for your fleet, you should certaining be making hiring decisions based on driver experience and skill, and choosing the right drivers should be as high of a priority as choosing the right vehicles.
Training drivers regularly, however, can also lead to improved productivity, fewer accidents on the road, and lower impact on vehicle wear and fuel consumption. Also, be sure to schedule drivers in short, manageable shifts to avoid drowsy driving, and offer incentives to help positively impact driver productivity.
6. Take care of vehicles
It goes without saying that regular vehicle maintenance is imperative to keeping your fleet operations healthy and stable. As mentioned before, even one vehicle being down for maintenance can have a domino effect on the rest of the business.
Also known as a Preventative Maintenance Program, proactively implementing a vehicle maintenance program can help to reduce unexpected repair costs and ensure that all your vehicles are on the road. Use a vehicle maintenance checklist to be sure you’ve covered all the bases.
7. Keep detailed records and analyze data
Keep detailed logs of which drivers are handling which vehicles and at what times, the condition of the vehicle, mileage before and after shifts, tire conditions, fuel costs, maintenance history for each vehicle, and common routes the vehicles are driven through. But don’t just stop there. Be sure to consistently analyze this data, and make decisions accordingly.
For example, is one vehicle’s fuel costs higher than the rest? It could be time for a trip to the mechanic or a total replacement. Does a certain driver return a vehicle with higher mileage than normal after their shift? They could be going off regular routes or using the vehicles for personal use.
8. Use technology and be open to innovation
Keeping detailed logs and records sounds great in theory, but do you, as a small business owner, really have the time to track all these fleet management and vehicle maintenance details manually? Chances are, the answer is “no”. And that’s where fleet management software comes in.
Fleet management software essentially takes all the data tracking legwork away, allowing you to manage your fleet quickly and efficiently through a desktop or mobile app. From improving fleet visibility to route optimizations, fuel cost tracking, and custom reporting, the right fleet management software can allow you to keep fleet management in house, while streamlining and automating processes.
9. Use GPS vehicle tracking software
A simple way to track company vehicles, GPS vehicle tracking systems are installed directly into the vehicle, allowing you to track their whereabouts in real time. This helps to avoid unexpected breakdowns and repairs, increase road safety and vehicle security, reduce operating costs, and even improve customer relationships and retention.
Not sure how GPS tracking works? Basically, GPS tracking takes the guesswork out of whether your driver actually made it to their destination, or whether you can take a certain vehicle in for maintenance today. In fact, the reasons why your business needs a vehicle tracking solution all eventually save your company money in the long run and should certainly be considered for anyone who manages a fleet.
For simple, affordable GPS fleet tracking for small businesses, check out Force by Mojio!
How can fleet management be improved?
If you already have a fleet management program in place, there’s always room for improvement. Beyond the basic best practices, here are a few more ways to improve your fleet operations.
1. Use the right vehicle for the job
This may seem like an obvious one, but you’d be surprised how many companies are losing money simply by using the wrong vehicles in their fleet. For example, if you own a field service business like a landscaping, electrical or cleaning company, your company vehicles should be outfitted and equipped to deal with the majority of issues that may arise on the job, and enough supplies on board to last a couple of days. If you own a flower delivery service, ask yourself if a smaller, more cost-effective vehicle would do the job rather than large cargo vans that are half empty most of the time.
2. Use fuel cards
Convenient for drivers and an easy way to track spendings for owners, fleet fuel cards are accepted at most gas stations and offer fuel discounts and detailed tracking and analytics to manage fuel expenses.
3. Consider branding your vehicles
You could have the best cleaning company in the country, but without reaching as many eyes as possible, business could remain stagnant. Consider branding your fleets so that you remain top-of-mind for future customers!
4. Collaborate with your team on improvements
Sometimes, those in the field know best. It can be easy to lose sight of the big picture when crunching numbers and striving to hit revenue goals, however, listen to your drivers and team members and be open to their feedback and implementing suggestions.
How to choose the right software solutions for your fleet management needs
When choosing fleet management software, be sure to choose the right software(s) for your company’s needs. Some software offers more sophisticated features suited to large fleets (50+ vehicles)—but these come at a higher price.
For smaller companies, simple, lower cost software that focuses on the essentials is a better investment. Choosing a solution with key features like real-time GPS tracking, vehicle health and maintenance, driver safety scoring is likely ideal for your needs and budget.
Ready to take your fleet management to the next level?
At only $15 per vehicle each month including hardware, Force by Mojio offers affordable and effective GPS tracking for your fleet. Try a free, 60-day trial of Force today, no strings attached.