How Fleet Management Solutions Help Transport & Logistics Companies to Reduce Costs and Improve Productivity

The recent years have proved to be trying times for transport and logistics companies. Rising fuel costs, a stark shortage of drivers, and unprecedented issues with the global supply chain has left the industry with a prevailing sense of insecurity. And to add to the stresses, ecommerce continues to rapidly grow with no signs of letting up, nor does the pressure to cut emissions for a more sustainable future. Rest assured, however, as current developments in fleet management have been specifically designed to tackle the problems that fleets are faced with today.

We’ve collaborated with the experts at MICHELIN Connected Fleet to explain how fleet management solutions help transport and logistics companies to reduce costs and improve productivity.

Fleet Costs

Before getting into how to reduce fleet costs, it’s important to first understand what the sum of costs are. A fleet’s total cost of ownership (TCO) comprises all of the expenditures required to maintain that fleet. Key factors include vehicle acquisition, vehicle depreciation, fuel costs, and service, maintenance, & repair costs.

Naturally, the vehicles within a fleet are the heart of it. Knowing which vehicles are best suited for your transport and logistics purposes, whether it be vans, heavier trucks, or both, is essential.

As is the way in which you go about acquiring them, either by outright purchasing or leasing. If you’re leasing then you’ll have to be aware of if you’re getting good relative interest rates. Likewise, if you’re a cash-rich company then being aware of the possible discounts you could be missing out on may widen your options, therefore having long-term financial benefits.

Another factor to take into account is each vehicles’ longevity in terms of value. Some vehicles tend to depreciate from their initial cost faster than others. It is evidently best to know which models will retain their value so that they can be sold in the future with little being lost.

You can actually offset vehicle depreciation by making sure it receives regular servicing, maintenance, and repairs. Although this may seem like more secondary expenditure, vehicle upkeep is vital to extending a fleet’s lifespan and ensuring driver safety. 

Fuel costs typically cover around ¼ of overall fleet costs, the importance of reducing the figures involved here needs little explanation. Keeping your fuel usage to a minimum will not only have positive effects for your fleet, but also the planet due to lower emissions.

Fleet Productivity

Maintaining an efficient standard of productivity is integral to getting the best out of your fleet’s capabilities. Fleet productivity is a basic measure of employee work output. It concerns the level of work completed by a fleet relative to the resources used in the process. Therefore, a fleet can be seen as productive when its general workrate exceeds resource use.

The resources in question here are inextricably linked to operational fleet costs. Namely, those fixed costs such as vehicle purchasing and leasing, in addition to variable costs like those for vehicle maintenance, fuel, and labour. A narrowing of any discrepancy between ‘hours paid = hours worked’ will result in exponential savings and increased fleet efficiency.

Fleet managers are tasked with handling onerous yet significant responsibilities. Transport and logistics companies essentially depend on them for sound functionality, i.e., that deliveries are made on time with little to no disruption. Controlling a mass of vehicles while taking care of administrative tasks can get overwhelming, this is why proper fleet management solutions are so instrumental.

Smart Fleet Management Solutions

Fleet management solutions encapsulate a range of utilities that make the fleet manager’s life easier. It is no use having a limited degree of influence, a fleet manager must have a comprehensive view of their fleet and be able to govern it effectively. The smart fleet management solutions of today integrate on-board technology and a dashboard interface.

Technology used by fleet managers comes in the form of devices that are installed onto each separate vehicle in a fleet. The information that these devices gather boils down to fuel consumption rate, breaking intensity, GPS, and whether the vehicle is in need of repair. The immediate advantage gained here is that it’s made known to the fleet manager if their drivers are breaking too hard or accelerating too much.

These behaviours not only waste fuel but can even be detrimental to the vehicle’s condition. And so, this gives fleet managers the ability to notify their drivers to adjust themselves accordingly. Moreover, real-time tracking will inform them of each drivers’ position and increase the efficiency of maintenance delivery when it’s required. As mentioned, arranging repairs before irrevocable vehicle damage is sustained will save money both in the long-run and the short.

A dashboard interface is likewise indispensable, owing to why it is generally integrated with on-board systems. The platform holds personalised information and provides KPI reports in real-time alongside access to pre-set historical reports for detailed analysis. Furthermore, it enables the fleet manager to see which routes are the most fuel-efficient and where their drivers are least likely to encounter idling due to road disruptions, thereby allowing prospective planning.

By the same token, a dashboard interface affords the added option of being able to alter journeys on the go in the case that disturbances appear. Intrinsically, a system such as this simultaneously reduces fuel costs while improving productivity margins. Ultimately, ensuring that your goods are delivered on time at minimal expense to the fleet as a whole.

Specialist Advice

Besides the technology comprising today’s fleet management solutions, and as with everything, good advice is always warranted, and there is no exception for this in the fleet management sector for transport and logistics companies.

Having an expert fleet management advisor at hand will give you that needed boost in assurance concerning your actions. They’ll be able to show you the areas in which your performance is best, and where improvements are needed. Having a sense of direction regarding cost control, vehicle and cargo security, maintenance, and operational efficiency is crucial to maximum productivity and sustainability.

Although transport and logistics companies have met with some difficulties in recent years, it’s possible to adapt. We hope that this article has helped to ease any doubts you may have had relating to your transport & logistics company and shown how you could benefit from a tailored fleet management solution.