Running a business is an exercise of organization, especially as the business grows. Many businesses especially require robust logistics. The logistical side of your company keeps everything running smoothly and, as you’d expect, involves a lot of moving parts.
One vital aspect of logistics is your business’s fleet. But what is a fleet, and how does it impact your business?
1. The Role a Fleet Plays in Your Business
A fleet is a group of vehicles that are used as commercial transportation for a business. A fleet may include delivery trucks, mobile construction machinery, cars, or electric cars. These vehicles may transport goods or materials, to deliver a service, or they may be used to help employees get around.
Some fleets only consist of a couple of vehicles, while others are far more extensive. Managing a fleet, especially a large one, can be difficult. However, proper fleet management can reduce costs and help you to get the most out of your fleet.
2. Advantages of a Fleet
Fleet vehicles have several major advantages, which encourages many businesses to invest in them. Dealerships and leasing companies alike will have special discounted prices for fleet vehicles, especially if you purchase enough models. If you buy in bulk, then you will get far better deals.
Fleet vehicles are usually designed to be affordable and easy to maintain. Getting the right vehicle is especially important, as you ideally want something as inexpensive, reliable, and efficient as possible, while still serving your businesses needs. Fleet vehicles, such as company cars, can also provide tax relief for employees, making it more viable for them to commute.
Another advantage is that fleet cars can have a positive impact on company image, especially if you are able to paint or otherwise decorate the vehicle to reflect your brand. It’s essentially free advertising. A good fleet also improves staff morale, especially if you provide company cars.
3. Fleet Financing
One of the major aspects of fleet management is taking care of the finances. Aside from the costs of purchasing or leasing the vehicles, which is a major part of the financial side of things, you have other things to consider as well.
Count the cost before you establish your fleet. Not only will this help you choose between leasing and purchasing, but it will also help you to determine exactly what kind of vehicle you need and how many. If your company can’t support the fleet you want financially, then it simply isn’t an option. While a fleet is more than useful, it’s not worth bankruptcy.
Get a full breakdown of the cost of the vehicle, as well as additional charges and fees. These vehicles will need to maintained regularly, so factor that in as well as repair costs, insurance fees, general running costs, and fuel costs.
However, there are ways to reduce these costs. For example, some of the benefits of using a fleet gas card are that its easier to keep track of charges while drivers are on the road. This helps you to determine exactly how much is being spent on gas and how your fleet can improve.
4. Leasing or Purchasing
If you’re planning to set up a fleet, you will have the option between purchasing vehicles or leasing them. When you lease a vehicle, you don’t own it outright, but hire it through a third-party company.
Leasing a vehicle is typically a cheaper short-term option, but more expensive in the long run. Owning a vehicle also offers you more freedom with it, you can use it how you wish without worrying about mileage limits.
The decision to lease or purchase a vehicle largely depends on your needs, preferences, and financial situation. Leasing vehicles can make fleet management easier, but you will still have to deal with the leasing company.
5. Driver Management
As well as the vehicles themselves, your drivers are a hugely important part of your fleet. While autonomous vehicle technology is continuing to be developed, it’s still firmly a thing of the future. As it stands, without your drivers, your fleet isn’t going anywhere.
Ideally, your drivers should be well-trained before they use a fleet vehicle. If you have maintenance staff on the payroll as well, they should also know exactly how to best take care of your fleet. Make your expectations clear from the start, as this will both improve your employees’ performance and their morale.
Set up company policies for vehicle usage, ideally with refresher training sessions each year so that drivers don’t slip back into bad habits. Pay special attention to how your drivers drive the vehicles. Make sure that your drivers are up to date with health and safety regulations.
Poor driving can increase the wear and tear on your vehicles as well as fuel consumption. Not only that, it reflects very poorly on your company. Your fleet and your drivers are representing the company, often with the brand emblazoned for all to see. In the worst case scenario, an unsafe driver can cause an accident, which can have severe repercussions.
Fleet management is as much about managing people as drivers, so the same management skills that you need in other aspects of your business are necessary here. This includes being able to clearly communicate with your team.
When it comes to managing a fleet, this can be more complex because your team is likely spread out across wide distances. Set up robust communication channels and regularly keep in touch with your drivers. Be approachable and build up your drivers’ trust in you so that they can come to you with any issues, allowing you to catch them in the bud.
6. Fleet Maintenance
As mentioned above, vehicles do need to be maintained. This is especially important for a fleet vehicle, because they go through so much. Maintenance needs will differ depending on what you use the vehicles for and whether you have leased or purchased the fleet.
Leased vehicles are usually newer than purchased vehicles, and are designed to last for a long time. However, many leasing companies have very vigorous maintenance needs, which means that your business may end up being responsible for higher maintenance costs.
Even with a purchased fleet vehicle, you can’t let it be driven into the ground. Keep on top of vehicle maintenance and regularly check each vehicle for any minor issues. Minor issues can quickly add up to become a far more major problem, and will gradually increase the wear and tear of each vehicle.
For example, if the engine has a small flaw, then it may be less efficient and underpowered. This means that the driver will need to use more fuel to get to their destination. While this seems like a small cost, if this is happening with six vehicles each traveling thousands of miles in a short time, it can rapidly add up.
Also, a poorly maintained vehicle is more likely to break down. Breaking down delays the supply chain and means that you will have to repair or replace a vehicle. This costs money and can impact your customers. Ideally, avoid this issue whenever possible.
7. Common Fleet Management Mistakes
As with many major business processes, fleet management has its pitfalls. These can make your fleet more expensive and less efficient than it should be, interfering with your cash flow and potentially endangering your business.
One of the most dangerous mistake to make with fleet management is to neglect cost monitoring. These costs include fuel consumption, maintenance, and downtime. If these costs aren’t closely monitored, then it’s easy for them to get out of control without being noticed. Keep an eye on all business expenses, including your fleet costs.
For example, mileage costs can be reduced by researching the delivery routes beforehand and planning the most efficient way to get from A to B. Detours, scenic routes, and getting lost can add up in fuel costs, as well as wear and tear on the vehicle and the driver.
Some businesses also aren’t as organized as is required to maintain a fleet. This increases the chances of things going wrong, which isn’t just expensive, but can also cause delays. These delays can, in turn, effect your products and your customers, reducing your reliability.
Also, a poorly maintained fleet that looks shabby and dirty reflects poorly on your company. A customer may reason that, if you don’t care about your vehicles, you may not care about your products or services either.
However, this is a fine balance. Another common mistake is to bite off more than you can chew. Purchasing a lot of high-end vehicles may look and feel good, but it may be too difficult to manage and impossible to finance. A mistake like this can cost a company dearly.
Finally, neglecting your drivers and human support staff is a major mistake. You can have a fleet of perfect vehicles, but they won’t benefit you without skilled and dedicated drivers. Take care of your drivers and they’ll take care of you and your fleet of vehicles.