If you run a field services company, you no doubt use trucks, vans, or other vehicles in the course of operation. Fleet management lets you organize the use of these vehicles for smoother business function, legal compliance, and cost savings.
Here’s what you need to know about this vital part of providing service in the field. You’ll learn how to leverage fleet management solutions to boost your bottom line and know you’re covered with government requirements.
You’ll also read information about the benefits of fleet management and how to choose the right fleet management system for your business. A list of best practices at the end will help you integrate fleet management into your company.
What Is Fleet Management?
Fleet management is the management of all types of vehicles used for work purposes. For field services companies, this typically includes trucks and vans driven for service calls and sales.
But fleet management also applies to aspects of personal vehicles used for work, sometimes known as grey fleet vehicles. Grey fleet cars and trucks are common with startup businesses that don’t have dedicated vehicles yet, but they must be handled as commercial vehicles in most instances.
There are other types of vehicles covered by fleet management, including:
- Ships and boats
- Railway cars
- Non-powered assets used in conjunction with vehicles, such as dumpsters, trailers, and generators
- Off-road or job site vehicles, like excavators and forklifts
- Depending on the type of business you operate and the fleet you have, fleet management may include a wide range of tasks, such as:
- Vehicle acquisition, leasing, and financing
- Licensing, registration, and compliance
- Vehicle maintenance
- Accident and breakdown management
- Vehicle tracking for location, mechanical diagnostics, and safety issues, like speed
- Fuel management
- Driver training
- Remarketing and updating vehicles
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What Are the Benefits of a Fleet Management System?
Fleet management systems are an integral part of operations for successful businesses in industries like:
- Pest control
- IT and telecommunications
- Appliance installation and repair
- Electrical contracting Mobile personal and pet services
Even if you have a small field services business with just a few vehicles, a fleet management system can offer many benefits, especially when it comes to cost efficiency and legal risks.
We review all the ways that a fleet management system can improve your profit margins below. But first, let’s talk about risk management and compliance solutions.
Staying in compliance with government agencies
Every type of field services company is unique in its business model. But what they all have in common is the need to stay current with various government regulations about vehicle operation.
Your business may need to follow state and/or federal mandates depending on the type of vehicles you use, what they carry, and where they operate. Failure to follow these laws can result in citations and fines that cost money or might even keep you from being able to operate.
How is fleet management accomplished? You can use a human in-house fleet manager, a fleet operations service, or fleet management software. You’ll know your business vehicles will have the proper registration, licensing, placards, and inspection stickers.
If a vehicle demands a special type of driver’s license, fleet management will match a qualified driver with that vehicle. Fleet management can also handle electronic logging device (ELD) compliance. This may be necessary if your drivers are subject to federal laws on operator hours and fatigue.
Vehicle insurance is also handled by fleet management. If you’re using in-house fleet management software, you’ll get reminders about renewals. You’ll also receive expense-tracking help, plus easy access to all needed documents, like policy cards and claims filed.
If you hire your own fleet manager or outsource to a third party, you’ll get the benefit of a human being who can do all that and more. Just like software, a human fleet manager can help you select the best policy for your coverage needs and budget. If an employee gets in an accident or needs roadside assistance, fleet management handles it.
Do you or your employees use personal vehicles for work-related tasks, like making calls or picking up supplies? Your personal insurance policy won’t likely cover you in these cases. You need to have a commercial auto policy instead, which fleet management can take care of.
Telematics is a type of vehicle tracking system used as part of many fleet management strategies. It lets you track the real-time location of vehicles to protect your assets. It can also offer kill switches (remote vehicle disabling) or lockouts to prevent unapproved use of vehicles or theft.
You can use fleet management to coordinate and route service calls based on where your employees are at the moment. If a customer calls requesting an ETA on a technician, fleet management tracking can give you an accurate response.
Driver behavior and safety
Vehicle tracking can also be used in more sophisticated ways to watch things like:
- Vehicle speed
- Driver behavior
- Engine diagnostics
This helps ensure the safety of drivers and other motorists on the road. It can save your company from traffic tickets, accidents, and breakdowns.
Some fleet management services also help companies enroll drivers in defensive or high-speed driving courses and classes required for the operation of specialized machinery. Your business may have to provide proof of this training to bid on certain contracts.
Specialized driver training cuts down on costly accidents too. Fewer accidents may lower your insurance rates, and it ensures vehicles are always available when needed.
How Do Fleet Management Strategies Help Your Business Save Money?
Clearly, many of the compliance solutions offered by fleet management overlap with cost savings, such as:
- Avoiding fines and fees
- Roadside assistance to cut worker downtime
- Insurance savings
- Maximizing routing efficiency
There are other areas where fleet management saves you money, as listed below.
Fleet management is an ideal way to keep track of fuel usage and costs, particularly with the price of gas being so high these days. Depending on the type of fleet management system you use, your business can track fuel purchases and vehicle mileage.
Third-party fleet managers will often add services like fuel cards for employee gas purchases, so you never even have to deal with receipts for reimbursement. Your company can do this independently if you choose fleet management software over a third-party service.
With the help of fleet management, you can also cross-reference things like fuel usage with idling time to determine where business operations could be more efficient. Did you know that idling uses up to a half-gallon of fuel per hour? It’s less efficient than shutting off and restarting an engine.
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Keeping vehicles up to date on maintenance is a key way to save money. Fleet management software will issue reminders for things like oil changes, tire rotations, and vehicle alignments. All of these contribute to cost savings.
Third-party fleet services will manage maintenance reminders for employees, which is helpful if you have a larger company or several branches. No money changes hands with workers, as everything is handled through fleet management. Vendors are paid directly after maintenance jobs are approved.
For service providers of all sizes, fleet management can help with acquiring vehicles. They offer bulk leasing power for better selection and price discounts. Fleet management services and software can also study the market to make purchases at the most cost-effective times.
Fleet management can take on the role of purchasing or leasing vehicles, including:
- Partnering with you to select models
- Helping employees choose a vehicle
- Working with dealerships to complete purchases and leases
- Arranging for special features in vehicles, such as dashboard GPS, radio communications, or onboard computers
- Ensuring that new vehicles get the proper registration and insurance documentation
- Coordinating regular maintenance of new vehicles with drivers
Rotating out old vehicles
One of the most important ways to save money on your fleet is to remove vehicles that are costing you money. What makes a vehicle expensive to keep?
- Value depreciation
- High mileage
- Excessive maintenance
- Outmoded features
When it’s time to change a vehicle, your fleet management system can help with that. It will either track data through your software or use human monitoring.
A fleet service can further remarket the vehicle for you, helping you get the most in resale. If the vehicle is leased, it will handle ending the lease for you. Taking these items off your plate lets you focus on other areas of your business.
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How to Choose the Right Fleet Management System for Your Business
Not sure which is the right fleet management system for your field services company? Here are some pro suggestions to help you choose the best one:
Don’t select a system only for the present. Think about where your business is headed over the next five years, so your fleet management solutions will grow with you.
Ask your workers what they would find most helpful in a fleet management service. You might be surprised by the results.
If you choose fleet management software, go with a cloud-based platform. That way, you won’t have to do any software installations or worry about updates.
Research the installation and setup process no matter what type of system you select. Who places required devices in your vehicles? Is there a cost for installation and activation? How easily will fleet devices integrate with existing gear or payment systems?
Who provides training for your employees—you or the software company or fleet manager?
Make sure all the system features and customer support match your business model. You don’t want to pay for things you don’t need, nor do you want to find out you’re missing key elements required for your vehicles.
If using a third-party service, inquire about their labor, parts, and maintenance turnaround policies. Do they offer warranties or replacement vehicles if yours is in the shop?
Understand what will and will not be covered by insurance—does this match your expectations and financial needs?
Ask for demos or references so you can see in more detail if a fleet management system is right for you.
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Expert Tips on Improving Fleet Management for Field Services Companies
Here are some ways you can start using fleet management in your business today:
Take inventory of where you’re starting from. What vehicles do you currently own or lease? What are your fleet budget goals for the next year or two? What is working and what’s not about your vehicles?
Understand the limits of fleet management software. Although this is a budget-friendly option, be aware of what it can and cannot do for you. It still requires human oversight, and you have to actually act on the recommendations the software makes. Who will use the software and make important fleet decisions?
Communicate your needs to your fleet management provider or in-house coordinator. What areas of fleet management concern you most? If you’re using one of your own employees to manage the fleet, how will you handle after-hours emergencies, sick time, vacations, etc.? How can you reach an outside fleet management service during non-work times?
Provide adequate training for employees. Once you use the tips above to select a fleet management solution, make certain all your employees understand how it works. How do they arrange for fuel purchases or routine maintenance? What happens if someone gets in an accident? Will they receive fleet-related communication through your company, third-party emails, or an app?
Explore vehicle leasing and purchasing options. An equity or open-end lease lets you purchase a vehicle at the end of the lease period with a guaranteed residual value (GRV). A closed-end lease, on the other hand, places depreciation with the lessor. Therefore, it may have mileage and other restrictions that don’t work for your business model.
Take advantage of everything fleet management offers. It’s a competitive industry. You may find perks or resources with one company that you don’t get with another. Check out all your options for things like rental cars and insurance.