We’re all in business to make a living. But, when vehicle-based businesses grow revenue, expenses often rise as well. If not managed closely, expenses can expand quickly and eat away profit margins.
A GPS fleet management system can help manage expenses. This article will walk through actionable tips to use the technology to:
- Reduce fuel usage
- Increase customer retention
- Minimize vehicle breakdowns
- Prevent collisions
- Control overhead
Let’s start by defining a GPS fleet management system.
What is a GPS fleet management system?
A fleet management system is a centralized set of tools that help businesses track and manage a mobile workforce. Key areas of focus include cost reduction, route planning, operations automation, and compliance. Industries of all types—including trucking, local delivery, field services, and construction — use fleet management systems. Check out this fleet management system guide for more information.
How GPS fleet management systems reduce fuel usage
If your business depends on vehicles, fuel is likely one of your biggest costs. According to ATRI, fuel makes up 22 percent of operational costs. And this is at a time where fuel costs are historically low. Here are three ways to reduce fuel usage:
#1 – Reduce idle time
Each hour a vehicle idles uses about 1 gallon of fuel. A fleet management software can track idle time by driver and vehicle and display the associated fuel usage:
With this information, you can identify the drivers idling vehicles during jobs. Many businesses offer cash bonuses for drivers with low idle rates to make the situation a financial win-win.
#2 – Prevent vehicle misuse
Are your vehicles being driven after hours for side jobs or personal use? Unfortunately, this is common and inflates your fuel bill. A fleet management system allows you to easily view the location history of any vehicle:
#3 – Plan more efficient routes
Miles driven to a job or load are non-productive. Real-time GPS tracking can help minimize unproductive miles by making it easy to find the nearest available driver:
Local fleets can view real-time traffic conditions for additional context. Long haul fleets can view HOS data to find the nearest available driver with necessary Hours of Service availability.
How GPS fleet management systems may improve customer retention
According to Bain & Company, a 5 percent increase in customer retention produces a 25 percent increase in profits. Additionally, 86-95 percent of consumers read online reviews for local businesses before purchasing.
It’s clear that customer service impacts the bottom line. Here are a few ways a GPS fleet management system can improve the customer experience:
#1 – Increase on-time percentage
When you have real-time location data that can account for traffic and compliance, you plan better routes. Better routes mean you show up on time, more often.
#2 – Faster response times
Customers often expect immediate service when an urgent issue comes up. With real-time GPS tracking, you can easily find and reroute the nearest available driver.
#3 – Automatic ETA notifications
Whether they need to prepare the loading dock or come home from work to open the door, customers need and expect real-time visibility into their load/service. Automatic ETA notifications can keep them updated without burdening your team with constant phone calls.
How GPS fleet management systems streamline vehicle maintenance and repairs
Maintaining vehicles is expensive. Experiencing a breakdown is really expensive. Between a tow truck, parts, technician labor, and potential revenue loss—the cost of a single breakdown can be in the thousands.
Here are two ways a fleet management system can help:
#1 – Proactively plan maintenance
Vehicle diagnostic reports allow you to provide mechanics with a list of issues and possible vehicle weaknesses. With this information, they can fix every issue in a single appointment and minimize future breakdowns and downtime.
#2 – Identify critical issues in real-time
Sometimes, critical vehicle issues cannot be prevented. In these situations, you can receive real-time alerts and ensure the vehicle is taken off the road before it causes an expensive breakdown or, worse, a collision.
How GPS fleet management systems help prevent collisions and litigation costs
You take safety seriously. But, when a driver leaves your facility, you often have little visibility into whether they’re upholding your safety standards until it’s too late and a collision has occurred.
With the average collision involving a heavy-duty truck coming in at $91,000, a slight uptick in collisions can seriously impact your margins.
Here are three ways a fleet management system can help:
#1 – Proactively identify at-risk drivers
Driver Scorecard data and dangerous driving alerts make it easy to understand which drivers are putting your business at risk. You can use this information to proactively intervene and correct the behavior. If the behavior persists, you can understand when it’s time to let a driver go before they cause significant harm.
#2 – Improved coaching effectiveness
A fleet management system with an integrated dashcam can increase your coaching effectiveness. Not only can you experience the event from the driver’s perspective but you can also walk the driver through each dangerous driving event to visually show them what they should do differently.
#3 – Protect yourself from unfair litigation
Even the safest vehicle-based businesses are likely to experience a collision at some point. You may even get caught up on a “crash for cash” scheme. If you can’t prove you weren’t at fault, you may be held liable. A dashcam can prove what really happened. In fact, this delivery company saved up to $500,000 by avoiding a personal injury lawsuit.
How GPS fleet management systems help control overhead
With a mobile workforce, it’s typically your drivers that bring in the revenue. While the support functions of the back office staff are critical, they can weigh on your margins. A fleet management system can help you scale your business without scaling overhead by making your team more efficient. Here are a few examples:
#1 – Automate compliance
Compliance can be a time-consuming task that gets more complex as you grow. A fleet management system can simplify and automate much of the paperwork associated with Hours of Service, IFTA, and Driver Vehicle Inspection Reports.
#2 – Minimize phone calls
A fleet management system can eliminate quite a few different types of phone calls by automating communication. Here are a few examples:
- Driver status updates with real-time GPS tracking
- Customer updates with automatic driver ETA notifications
- Load/job instructions with integrated driver workflow and instant messaging
- Locating specific trailers or types of equipment across yards and job sites with real-time GPS asset tracking
A GPS fleet management system can be your competitive edge
In a competitive industry, an excellent customer experience and a strong ability to control costs are often the difference between rapid growth and slow decline. Across all industries, vehicle-based businesses are adopting fleet management systems to get an edge on the competition.
If you’re interested in learning more about using a fleet management system in your business, check out this free guide. It walks through actionable strategies to modernize your fleet operations to support profitability and rapid growth.