The Challenges of Running a Fleet
Companies with lots of vehicles and drivers face diverse challenges when it comes to management across different regions. Fleet management challenges might be different from one company to the next, but the higher the number of the company vehicles the more complex the problem. Here are a number of challenges that come with running a fleet.
Speak to any fleet manager and they will tell you that their job would be much easier if they did not have to deal with the drivers. Yes drivers have genuine problems all the time but most fleet managers would agree with Plato and say that 20% of the drivers create 80% of the issues. It’s a broad statement but in many cases very true. You will never understand them all, so never cease to be amazed by the colourful driver population
The modern fleet manager has to be a jack of all trades and part of the job that is requiring ever more attention is the safety of drivers. What with changes in legislation and corporate manslaughter laws a company is completely responsible for its employees in a workplace and that includes the company car.
There are a variety of different types of legislation associated with the running of a fleet. These include health and safety, tax, insurance, financial, and environmental. Ensure that you are aware of the impact these different types of legislation have on the running of a fleet and make sure that you have the right policies and processes in place to manage these legislation requirements.
Running a fleet aint cheap! In fact for many organisations it could be the next largest expenses after payroll. With this in mind it makes sense to do all you can to keep costs as low as you can. There is no silver bullet but lots of small measures can add up to a big saving.
- Tax and Funding – Is your fleet funding at its optimum? Many businesses have a one fit approach to fleet funding but its not always the best policy. If you run cars and run vans that get a bit of unnatural wear then think about using a finance lease or contract purchase. This way you participate in the sale price of the vehicle and will not have to pay for unfair wear and tear charges and admin. Also explore ECO schemes and Salary sacrifice schemes for the right kind of driver they can be hugely beneficial.
- TCO and Vehicle Choice – Don’t always go for the cheapest car as it can be the most expensive in the end once depreciation and running costs are considered. Think carefully about the Total cost of Ownership in a car. TCO will take into consideration everything from purchase price, sales price, running costs and taxes. Sometimes the more expensive efficient German vehicle can end up with the lowest costs overall.
- Mileage – Mileage of vehicles has the biggest impact on costs as the more miles the more the cost. Just make sure though that you are not paying for an employee’s personal mileage. In our experience around 22% of mileage is overestimated so there is a saving right away. Also remember that if you are paying for personal mileage there could be a significant BIK requirement costing you thousands of pounds per driver in back taxes and penalties.
- Restrictive policies – introduce some restrictive policies. Requirements such as no use of motorway fuel stops or actual cost pence per mile can all help to change driver behaviour and help save money.
With a huge fleet comes an enormous amount of information and data that has to be reviewed. A large fleet is always churning out data to be looked into. If GPS for instance is used to update the position of the vehicles every 120 seconds, it means there will be 30 updates in every 60 minutes and 720 updates all day. If a fleet has over 10,000 vehicles, it means there will be millions of data packets to be reviewed by fleet managers.
Inefficient software systems
If the huge data churned out by a fleet is to be managed and used accordingly, it must be integrated into the existing software system without a problem. Result have to be integrated into software systems to avoid the risk of reduced productivity since data needs to be either manually transferred into existing systems or entered a number of times. Ensuring the fleet management tool in place is perfect is very important, including integration with any other system.
Utilization of every fleet asset
The bigger the fleet company the more the assets that go unutilised or managed accordingly. Assets in turn will disappear easily while some are not used to their best leading to loss of profits and investment for the company. Installing a fleet management tool makes it easy to find other vehicles belonging to the company sitting idly; they usually add to the expenses in terms of depreciation, registration and insurance.
Management across a vast geographical area
Management of a fleet goes beyond having working management software. There are usually assets to be managed across a vast area geographically. A fleet company with operations globally, or one that operates beyond county lines or across the country will have a lot of challenges locating vehicles within a certain area and talking to remote drivers. Spatial clustering and advanced mapping are required to help monitor the movement of the fleet, which comes at a cost.
Fleet cost reduction
Another challenge that comes with running a fleet is the mandate that fleet managers have to reduce the cost by at least 10 percent. This is extremely hard particularly when acquisition and fuel costs are going up. There are so many areas here to discuss that we will do a separate blog on this…
Management of unauthorised usage of assets
Clearly, management of all the assets belonging to a fleet is a huge challenge. This is compounded by the misuse of vehicles by drivers outside certain areas and after work hours, including dangerous driving resulting in more expenses for the company especially in terms of litigation. A 24/7 monitoring system in place is a must but even getting a reliable one is a challenge.
Planning is hard
To be on top of difficulties and problems that have cropped up is really hard. Those with small fleet companies usually find planning a little hard, especially if they are not used to scheduling. A vehicle could get wrecked and destroyed while another could require maintenance. This makes it really hard to plan. Also, small fleet companies occasionally lack the organisation and flexibility that comes with a large company.
Cost of vehicle acquisition is also a challenge for many fleet companies, considering the best fuel efficient vehicles are way too expensive.
Fleet the Hot Potato
In our experience fleet is a hot potato. It tends to get passed around until someone can hold on to it for long enough. It sits in a variety of different business areas depending upon the company (Transport, Facilities, Finance, Sales etc..). To borrow a phrase from Donald Rumsfeld “because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know”. Just be sure that one of the unknown unknowns does not bite you. There are plenty of consultants out there who know about the unknown unknowns, just make sure you get to know them. Sorry J.
If you are looking at a simple mileage capture system that can be installed by the driver and enables private trips to remain private then we could have just what you’re looking for. Contact us via www.peakmiles.com or via firstname.lastname@example.org