Published: 7 December 2023
Contributors: Tom Krantz, Alexandra Jonker
Fleet management encompasses the systems, processes and tools needed to ensure an organization’s fleet of business vehicles are maintained throughout their entire lifecycle.
It also involves the management of fleet drivers, optimization of fleet operations, and improvement of asset utilization—all of which fall under the larger umbrella of enterprise asset management.
A fleet can range from commercial vehicles to freight trucks to airplanes, depending on the organization. Some organizations may build their own fleet while others may hire fleet management companies. With proper fleet management, organizations can improve efficiency, reduce costs and ensure that their business is complying with the latest regulations.
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A smart fleet management system can help organizations achieve their environmental, social and governance (ESG) goals. For instance, fleet providers can play a crucial role in minimizing their organization’s economic footprint by tracking fuel consumption and other diagnostic data. In doing so, they can also improve fleet performance by preventing vehicles from breaking down and avoiding costly vehicle acquisitions.
Fleet management can also enable more positive vehicle inspection outcomes. A poor vehicle inspection can ground vehicles, even when they are fully operational. Fleet management can provide either the predictive or preventative maintenance that keeps vehicles in circulation.
Finally, by implementing various fleet management solutions, companies can improve upkeep, avoid last-minute cancellations and increase the number of customers they serve. This can result in more satisfied customers and greater profitability.
Fleet managers oversee fleet operations while maintaining fleet efficiency. At a glance, that may seem like routine asset performance management or fleet maintenance. However, a fleet manager’s responsibilities include everything from:
Fleet managers determine when a new vehicle is needed, what requirements the vehicle must meet, and whether an older vehicle needs to be replaced.
Fleet managers are responsible for preventative vehicle maintenance to avoid breakdowns, balancing maintenance costs with maintenance schedules and handling repairs so the fleet remains operational.
Fleet managers recruit drivers, manage their workflows and work to retain talent. They also ensure driver safety by implementing proper training, monitoring driver behavior and optimizing safety procedures.
Fleet managers are responsible for fuel management, which includes mapping out preferred fueling locations, creating processes to track fuel usage and lowering fueling costs for the entire vehicle fleet.
Fleet managers oversee hours of service (HOS), electronic logging devices (ELDs) and other regulatory requirements to ensure that all drivers are operating in full compliance.
Fleet managers compare fleet costs, aggregate data in a central location and perform route optimization to improve cost savings and reduce downtime. Many use fleet management solutions or fleet management software to automate and optimize these tasks.
Fleet management software provides fleet managers with a real-time logistics platform that can orchestrate everything from fleet tracking and driver management to weather and traffic forecasting. Fleet management solutions can also improve fuel usage, provide key vehicle metrics and fleet data, ensure compliance with regulatory requirements and ultimately, optimize fleet operations.
While similar to a transportation management system that allows a company to manage its inbound and outbound shipping, fleet management software differs in that it’s more robust and focuses solely on the commercial fleet.
Some common features of fleet management software include:
- Vehicle tracking: With GPS and OEM telematics, fleet managers are gaining real-time visibility into their fleet while it's on the road. They can monitor vehicle locations, analyze driver performance and mitigate potential maintenance issues through real-time notifications. The ability to pinpoint a vehicle through asset tracking is a defining feature of a good fixed asset management strategy.
- Driving behavior analysis: Often, vehicle tracking systems have an additional driving behavior component that assigns drivers with a score or rating. For example, frequent braking or idling can impact scores negatively. Some organizations may also use dash cams in the cabin of their vehicles to keep an eye on their commercial fleet.
- Fuel management: Fuel efficiency can lead to significant cost reductions. Fleet management software monitors fuel costs and track vehicles’ fuel consumption. It may also automate the refueling process to avoid unnecessary refueling or worse, running out of fuel.
- Route planning: Fleet managers will often plan routes in advance for optimal efficiency. Through a combination of GPS tracking and telematics, fleet managers can precisely map routes, reducing fuel costs while improving sustainability efforts.
- Software updates: The rise of electric vehicles means that fleet operators may be expected to have a comprehensive plan to manage updates to vehicle operating systems, including when to update software and how to roll out the updates.
Organizations looking to stand up a strong fleet management program should consider these factors:
A forward-facing fleet management strategy requires significant investment out of the gate. Some initial costs include adding telematics to vehicles, purchasing or licensing software and reskilling the workforce.
Fleet sizes vary and a fleet of vehicles can range from e-bikes to airplanes. Large fleets with a wide variety of vehicles will require different approaches to each type of vehicle, especially when it comes to preventative maintenance.
As organizations move towards a more advanced and software-guided fleet management approach, they’ll need to stay current on the latest technologies, update and replace hardware and otherwise manage their tech stack.
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