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WHAT IS FLEET MANAGEMENT?

Learn critical tips for effectively managing your operation and maintaining fleet viability.
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Mark Schedler - Sr. DOT Editor - J. J. Keller & Associates, Inc.

October 04 , 2019

A lack of qualified workers, as well as ineffective cost control and risk management processes, can have a significant impact on your fleet’s viability. Quality fleet management ensures the right combination of processes and systems are in place to:

  1. Hire, retain, and develop, a qualified workforce;
  2. Identify and mitigate risk;
  3. Improve and reward operational efficiency;
  4. Maintain and manage capital assets; and
  5. Comply with policies and procedures.

Let’s take a look at each of these elements more closely to understand how fleet management helps drive the discipline of following or exceeding applicable regulations while balancing risk and productivity to drive profitability.

Hire, retain, and develop, a qualified workforce

Despite the apparent driver shortage, your team must uphold company standards and consistently follow driver qualification and supervisory policies and procedures. Below are some fleet management best practices to ensure that your workforce is qualified and high-performing:

  • Follow hiring standards and compliant driver qualification processes for every employee or independent contractor, without exception;
  • Review all potential hires with a party separate from the recruiting staff, such as an operations or safety manager;
  • Orient and train all new employees consistently, regardless of prior experience;
  • Assess all employees’ performance not later than within 90 days of employment;
  • Perform annual, or preferably semiannual, reviews of all employees to verify acceptable performance and qualifications; and
  • Schedule on-going training for office associates and drivers.

Read more about driver qualification best practices here.

Identify and mitigate risk

Once you hire drivers and they are operating vehicles, your job of assessing performance and risk to your operation starts. You cannot eliminate all risk. However, risk mitigation involves auditing for compliance as well as finding, correcting, and preventing unsafe behavior on an ongoing basis.

Proactive driver behavior management based on telematics and hours-of-service records, such as data available from dash-cams, ELDs, and other vehicle safety systems, is a best practice. The goal is to use the data these systems generate to improve compliance, minimize potential liability, and to keep insurance claims as low as possible. Not reviewing the data and merely responding to accidents and reacting to roadside inspection violations is not acceptable. Juries punish negligent carriers with “nuclear” verdicts for failing to prevent detectable unsafe behavior.

Read more about using driver data to mitigate risk here.

Improve and reward operational efficiency

You can pinpoint opportunities to improve efficiency from high-leverage items such as:

  • Excessive customer delays,
  • Real-time delivery and route tracking,
  • Fuel mileage,
  • Driver and vehicle utilization,
  • Automated International Fuel Tax Agreement (IFTA) reporting, and
  • Driver Vehicle Inspection Report (DVIR) defect repairs to avoid breakdowns.

Developing an effective driver performance management process provides leverage to do more with the team you have. Coaching drivers based on actionable information in exception reports, generated from your landslide of data, can improve operational efficiency as well as produce more revenue and profit with the same number of drivers.

Recognition and reward programs, combined with a robust performance management process, can aid in minimizing unintended turnover of your safest, most dependable and productive drivers. Also, when you coach to improve an individual’s performance, he or she is more likely to stay, be more productive, and operate safely.  

Read more about implementing effective performance management here.

Maintain and manage capital assets

Good fleet management includes understanding that your preventive maintenance program and equipment replacement lifecycle are critical to cost control and fleet productivity, as well as compliance and optimizing resale value.

Major vehicle maintenance-related costs can fall into several categories:

  • Tires;
  • Fuel efficiency;
  • Preventive maintenance (oil changes, scheduled part overhaul and replacement, etc.); and
  • Unscheduled repairs or replacement of components.

Several factors can affect decisions to minimize vehicle maintenance costs, such as:

  • The average age of vehicles;
  • Preventive maintenance schedules;
  • Driving techniques and operating area (city versus rural, terrain, and weather);
  • Drivers’ regular vehicle inspections and reporting of defects;
  • The ratio of preventive maintenance verse unplanned repairs (which are costlier); and
  • Lost revenue incurred by vehicle downtime.

An equipment lifecycle cost analysis should be performed to find the best age at which to replace vehicles of a specific make and model. The impact of downtime on driver productivity, maximizing resale value, and replacement cost is also a primary consideration.

Read more about automating your preventive maintenance program here.

Adhere to policies and procedures

Finally, fleet management ensures that all employees, not just drivers, understand their role, the accompanying responsibilities, and the policies and procedures used in supporting your business.

All employees want to know what is expected of them, what is acceptable and what is not, and what will either keep them employed or end their employment.

One tool of fleet management is an employee handbook that outlines company policies and procedures on at least these ten topics:

  1. Job descriptions and role responsibilities.
  2. Driver qualification and hiring standards.
  3. Dispatch operations and driver pay management.
  4. Vehicle inspections and maintenance.
  5. Hours-of service compliance, including electronic log use.
  6. Performance management and progressive discipline.
  7. Post-accident actions.
  8. Employee recognition and rewards.
  9. Drug and alcohol requirements.
  10. Zero tolerance activities in each functional area.

Read more about communicating company policies and procedures here.

A top tier fleet operation is created by hiring qualified people, and more importantly, people that share company values. Setting and keeping your hiring standards is easy to say, but harder to do when qualified potential employees are scarce. However, the quality of the people you choose to join and stay on your team determines the quality of your organization.

Try the industry’s best fleet management solution by requesting your 90-day trial of Encompass at JJKeller.com/TryEncompass


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