Fleet management refers to the actions that owners of fleets comprising more than five vehicles must carry out, in order to ensure efficient fleet operations, optimise their asset management, and meet business objectives within the automotive industry.
As a set of principles which translate into organisational practices, fleet management tasks range from vehicle acquisition and maintenance to logistics processes. Fleet owners can scale their fleet management systems according to business size, budget, and vehicle type, from buses and cars to trucks and vans.
An Overview of Fleet Management Types
Fleet management is a solution to help organisations keep track of their fleets. The rise of software platforms and their incorporation within fleet management systems ensures that fleet managers can maximise asset utilisation in the area of vehicle fleet management.
Supervising their operations and automating maintenance are two key benefits of fleet management solutions. In this regard, fleet management systems can automate maintenance by implementing workflow processes. Here, the emergency services industry and the public transportation industry are two examples of where automating processes makes fleet operations more efficient.
Key objectives for fleet managers to consider when assessing the metrics for fleet management success include cost optimisation, safety and compliance, and asset utilisation. Meeting these objectives ensures that drivers of growth, from cloud computing and predictive analytics solutions, will propel the growth of commercial vehicle fleets.
Asset Management
Asset management is a subset of fleet management, where organisations focus on critical assets for their operations. In a commercial context, effective asset management optimises performance and reduces costs. Moreover, asset management overlaps with transport management, where fleet managers use vehicles as their primary asset. Later on in this article, we will explore asset management for vehicle logistics and transportation.
In technical terms, asset management involves the hardware and software components of a vehicle fleet management system, including hardware units which locate each asset and software platforms which streamline incoming status data from the hardware.
Effective asset management has a positive business impact for the following reasons. Firstly, GPS tracking software can monitor vehicles in real time, improving Estimated Time of Arrival (ETA) predictions. Secondly, asset management software can leverage ETA predictions to satisfy customer demands and improve retention.
Vehicle Fleet Management
Vehicle fleet management involves a range of tasks, from vehicle acquisition and maintenance scheduling to fuel management and driver safety. According to Global Market Insights, the market share of passenger vehicles will exceed 42% by 2032. Allied Market Research also found that Germany’s passenger car market will generate a market share of $9.10 billion in that same timeline.
These projected data are important for vehicle fleet management two reasons. Firstly, growth in the segment of passenger vehicles will be a positive determiner of long-term viability for businesses operating passenger fleets, from taxi firms to delivery service companies requiring passenger car models. Secondly, the expected growth in Germany’s passenger vehicle market share reveals the potential for other countries investing in Electric Vehicle (EV) systems. Indeed, with Germany speeding up the transition to EV vehicles, more countries will also want to gain their share of this market segment.
According to a recent Centre for Automotive Management (CAM) study, tables are turning for the leading position in the EU market. As things stand, the UK is currently leading just ahead of Germany in terms of new EV registrations, and France follows closely behind Germany. The overall global leader is China, whose market share of new Plug-in Hybrid Electric Vehicle (PHEV) registrations occupied close to 70% of the market in Q1 of 2024.
With the global introduction of EV vehicles into the passenger vehicle market, fleet management systems have a unique opportunity to benefit from this trend. One commercial benefit for fleet management systems to focus on investment in vehicle maintenance software to support standards of excellence for their growing EV fleets of passenger cars, vans, and buses.
Transport Management
Transport management is a subset of logistics. Like vehicle fleet management, transport management requires fleet managers to use software solutions for maintenance scheduling, vehicle monitoring, and route planning. The difference with transport management is that fleet managers must respond to the task of ensuring the efficient movement of goods or passengers from one location to another. In this way, fleet managers need to factor in the requirements of the goods and cargo within the wider supply chain.
Following a similar logic to vehicle fleet management systems, Transport Management Systems (TMS) can benefit from a range of software solutions to maximise efficiency and minimise downtime. Here, owners of transport management systems can choose between traditional on-premises software to use on their TMS servers, and cloud-based, Software as a Service (SaaS) models. A third option is to choose a hybrid solution which combines elements of on-premises and SaaS-based software.
Objectives
The main objectives of fleet management are asset utilisation, cost optimisation, and compliance with safety and sustainability regulations. By keeping these objectives in focus, fleet managers can secure effective fleet operations, reduce safety risks, and improve long-term organisational performance.
Cost Optimisation
Cost optimisation is the main objective of all vehicle fleet management, since it is imperative for business success. Cutting costs related to vehicle operations means reducing fuel consumption, keeping maintenance expenses to a minimum, and achieving maximum fleet efficiency through smart tools. Cost analysis software for vehicle utilisation is therefore catching on as a tool within asset management.
An example of using fleet management solutions to enable cost optimisation is Fleetio, which has an online calculator tool to estimate the Return On Investment (ROI) of cost optimisation software. Cost optimisation calculation tools enable the accurate prediction of costs alongside fleet management system telematics solutions. Informed cost optimisation is vital in an era when fluctuation in maintenance costs can sharply increase, such as during the COVID-19 pandemic.
Safety and Compliance
Safety and compliance is a key area of responsibility for fleet managers within the automotive industry. Indeed, fleet owners must ensure compliance with safety and sustainability regulations. Implementing regular inspections, driver training programmes, and safety measures to prevent accidents is therefore a priority. Similarly, safety is another aspect of asset management and transport management where tracking vehicle metrics through GPS and AI solutions enhances existing safety procedures, thanks to the accuracy of real-time feedback.
Driver behaviour analysis devices score fleet drivers based on their driving behaviour to promote a culture of safer driving practices, reduce the likelihood of accidents, and improve customer loyalty due to greater trust.
Asset Utilisation
Asset utilisation is closely related to asset management, since effective vehicle fleet management relies on skilfully utilising fleet assets. Following the same principle for meeting safety compliance objectives, fleet managers can implement GPS tracking systems to monitor live vehicle location and performance, thereby keeping an eye on the status of their assets and allowing for better resource allocation. In a similar way, better asset utilisation also improves transport management. This includes follow-up throughout the supply chain, including tracking shipments and sending alerts to recipients.
We will now consider the industry applications of asset management and utilisation within the logistics and transportation industries.
Industry Applications
Industry applications for fleet management include a variety of sectors, including logistics and transportation. In the logistics industry, smart fleet management helps organisations to keep tabs on the movement of goods and streamline their delivery, whilst optimising routes and meeting customer demands.
The transportation services industry needs optimal fleet management to ensure safe and reliable operations for passengers and drivers in the area of buses and vans. For urban planning, the scaling of transport management systems to meet the demands of city dwellers creates a more efficient transport network.
Logistics Industry
In the logistics industry, smart fleet management is important for the efficient delivery of goods. Through effective route optimisation, vehicle fleet management, and tracking of shipments, businesses can integrate their operational systems and meet increasing customer demands.
One example of transport management optimisation in the logistics industry is using Transport Management Systems (TMS) software to simplify processes across the supply chain, thereby improving warehouse efficiency, inventory management, and the resulting quality of customer service. In one survey, nearly two-thirds of TMS users experienced significant reductions in costs through the logistics supply chain, with their TMS system absorbing less than ten percent of their net savings.
Transportation Industry
The transportation industry occupies an important market share for transport management systems, with cities throughout the world relying on public transportation providers to serve the needs of their inhabitants whilst reducing global carbon dioxide emissions. In this regard, bus companies rely on fleet management to provide reliable and safe services on their buses.
By maintaining an overview of their fleet operations, transportation companies can improve future planning and asset management to enhance passenger satisfaction and attract a greater number of passengers. Improving passenger experience can also have a significant impact on the perception of public transport systems in urban areas. In this way, effective transport management systems can positively influence consumer uptake in public transport services, potentially improving air quality and contributing to countries meeting their low-emissions objectives.
Conclusion
Fleet management involves the organisation of a company’s assets and intersects with asset management and transport management. A technological revolution has occurred in the past decade, which impacts vehicle fleet management and transport management. Now, fleet managers can harness new capabilities to meet cost optimisation objectives which manual processes could not previously achieve.
Moreover, effective vehicle fleet management and transport management enables the safe operations of various vehicles, from buses and cars to trailers, trucks, and vans. In each of these cases, using fleet management to improve overall operational efficiency in transportation, as well as the logistics industry, offers an impactful way to meet KPIs and sustainability objectives.