Real fleet management in the future fleet world

March 18, 2022

A fleet management information system allows fleet managers to leverage their drivers as assets, rather than liabilities.

By Johan van Niekerk, Fleet Consultant for FleetDomain.

Research indicates the global fleet management market is expected to grow to $34 billion by 2025 at a compound annual growth rate of 11.3% during the forecast period.

These statistics reflect some fleet management services but predominately the GPS/tracking and card methodologies – which is not a holistic representation of the full market, but rather only components of it.

As with so many industries, COVID-19 massively disrupted the fleet management arena to an extent never previously experienced. Delivery disruptions, order cancellations, non-payment of accounts and many other influences forced company executives and fleet managers to re-evaluate all factors that influence fleet operating expenses.

All businesses are firmly focused on cost reduction, risk mitigation and improved safety. The fleet industry is no exception, with many businesses at last beginning to understand why they need to implement a fleet management information system (FMIS) solution.

Fleet management can be defined as a set of theories and applications that are combined to produce an end result of a reduction in fleet total cost of ownership (TCO) and an improvement in return on investment (ROI).

Through a process of consolidating all costs relating to a fleet of vehicles, an FMIS covers the entire spectrum from procurement through to disposal. Moreover, it encapsulates all data for full fleet management, inclusive of depreciation, maintenance, tyres, fuel, insurance, GPS/tracking, accident management, licence registrations and fines management.

In a nutshell, the ‘right’ FMIS solution will provide control over:

  • Drivers’ licences and professional driving permit renewals.
  • Vehicle licence renewals, certificates of fitness.
  • Maintenance and tyre management, including servicing interval warnings.
  • Fuel management, including key exceptions such as overfills, excessive consumption and fuel fraud.
  • Integration with GPS/tracking vendors.
  • Fines −compliant with legislation.
  • Management of accidents.
  • Vehicle inspections done by smartphone app.

Reporting is an essential part of any system deployed. For example, standard reports, as well as exception reports, will immediately shine a spotlight on problem areas. These reports can be scheduled to run automatically at pre-set times. Reports can be e-mailed to selected recipients, irrespective of being logged on.

The goal of a FMIS is to reduce TCO and deliver an improved cents per kilometre outcome.

Dashboard indicators allow the company to see the state of its fleet at a glance. Exceptions are flagged and can be drilled down, with immediate report analysis.

The goal of a FMIS is to reduce TCO and deliver an improved cents per kilometre outcome. Basically, FMIS provides control over the entire fleet with real-time data, improved operational efficiencies and inevitably better ROI.

FMIS is a particularly attractive proposition for fleet managers/supervisors as they leverage their drivers as assets (rather than liabilities).

Software vendors in the sector are incorporating more out-of-the-box features for driver management/behaviour monitoring – this latter is crucial, as without the ability to change driver behaviour, there is no improved ROI.

It enables businesses to manage, monitor and control their fleet with real-time data, improved operational efficiency and better insights that support quicker and informed decision-making.

Drivers and vehicles are among the core components of fleet companies and the management of both is vital, not only to limit costs, but to ensure the business is operating as efficiently as possible.

Vehicles are expensive to buy, equip and maintain, and no matter how many vehicles a company has, fleet costs probably form a large percentage of the budget.

It is common knowledge in the industry that the operating costs of most unmanaged fleets are 10% to 15% higher than they should be.

Aside from the depreciation on the vehicles themselves, fleet costs include items such as maintenance, tyres, fuel, accidents, licences, permits, tolls and fines. Based on the average running cost of a vehicle, it is probable that vehicles each cost anything between R6 000 and R12 000 per year more than is actually necessary.

Fleet administration is time-consuming and laborious, involving the completion of many forms and time consumed in traffic departments whenever a vehicle or driver-related issue arises.

Moreover, if a company is not aware of additional requirements, such as ID copies, driving licences, medical certificates, etc, then this simple exercise can turn into an ordeal that necessitates multiple trips and unnecessary admin.

Besides the increase in complexity and administration, it is vitally important that any fines accrued by vehicles and drivers are managed correctly, as mistakes or misunderstandings can result in drivers’ licences being invalid, or even the loss of an operator’s licence.

It is crucial to limit downtime of both vehicles and drivers. If they are not out on the road, they are not earning money. Vehicles parked in a workshop or panel-beater, or waiting for permits or licences, are not productive, and a driver waiting for licence or public driver permits cannot go out and earn money for the company.

More importantly, companies cannot afford to send out unlicensed vehicles or drivers, as both the financial risk and potential liability can be crippling.

An FMIS enables informed decision-making and negates all of the foregoing – essentially it boils down to using the latest technology to run fleet businesses in an optimal manner and it is imperative to survival and growth.

Source: IT Web


Johan van Niekerk is fleet consultant for FleetDomain, a member of the Argility Group.

He has 38 years’ experience in fleet management, fleet sales training and consulting. Van Niekerk has a profound understanding of the fleet management industry, including funding options, safety and risk assessment, plus the development of safety, driver and vehicle policies.

Over the years, he has gained experience conducting fleet evaluations and audits, plus providing fleet management training to executive and various levels of management personnel. He has also conducted fleet sales training courses for manufacturers, automotive groups and dealerships.

Van Niekerk places improvement of ROI in corporate enterprises and parastatal organisations through fleet optimisation as his main business objective. He also assists businesses with budget development, scenario analysis, forecasting and ultimately the entire management spectrum of corporate fleets from procurement through to disposal.

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