How to maximize your fleet's utilization in 2024

Max is an overwhelmed construction depot manager. He spends dozens of hours each week tracking down which pieces of equipment are used at which job sites. It’s difficult for him to measure downtime or idling time between jobs. He struggles with coordinating team efforts and assigning the necessary equipment, machines and materials needed for each site. When he doesn’t deliver on time, projects get stalled and progress is halted. Max has no idea how to improve his fleet utilization rate to cut fleet costs.

Fortunately, he’s decided to give up on spreadsheets and paper logs. Max upgrades to fleet management software instead. 

Fleet management software like Logifleet makes it easy to track and evaluate metrics such as fleet utilization. It gives depot managers more visibility and control over their operations, which makes everyone’s jobs (and lives) easier.

What is Fleet Utilization?

Fleet utilization is metric fleet managers use to track fleet efficiency. It involves monitoring driver/operators’ behavior and tracking assets’ location and usage. This prevents over or underutilization of fleet assets. (Read our pro fleet monitoring tips here.)

Many areas in fleet management are impacted by fleet utilization rates. In the past, it was hard to accurately calculate fleet utilization. Thankfully, with advancements in telematics, it’s now easy and simple to monitor fleets, small or large.

Every single day, more and more companies are using telematics to gain a competitive edge. According to a 2018 Government Fleet Research survey, 75% of fleets used telematics on at least some of their vehicles!

What is involved in Fleet Utilization?

Depot managers are always looking for ways to improve fleet utilization. But how do fleet utilization rates impact other areas of fleet management? How is this metric tracked and reported? How can depot or logistics managers use this data to reduce fleet expenses? Read on to learn more.

Vehicle acquisition

Your fleet is struggling to keep up with demand. It looks like your team capacity is maxed out. What should you do? Buying or renting a new vehicle or piece of equipment isn’t always the answer. Good depot managers understand that fleet utilization is impacted by multiple factors. Sometimes the solution may be changing a few schedules or better route optimization. Before you can come up with a solution, it’s essential to get the data required to anticipate the needs of each site. This prevents work from getting delayed.

When the time does come for fleet managers to draw up an acquisition strategy, fleet management software can help. It can produce utilization reports to help managers create better purchasing strategies. This way, fleet managers can avoid unnecessary expenses and stay on budget.

Vehicle maintenance

Regular maintenance is the key to preventing unscheduled downtime. A good fleet management system can notify you about upcoming and overdue maintenance. Keeping your most valuable assets in top shape means they’ll stay on the road around the clock, instead of languishing in a shop awaiting repairs.

Driver safety and compliance

Collisions are devastating and often create unforeseen consequences down the road (i.e. increased insurance costs, more downtime, reduced vehicle resale value, etc.). By promoting a culture of safety and accountability, drivers are less likely to damage the vehicles and harm themselves. This means your employees and assets are out there generating revenue instead of incurring expenses. Practicing good safety yields higher fleet utilization rates. It’s also the law!

Fleet tracking and monitoring

It’s difficult to supervise a team that’s scattered all over the map. Some logistics managers spend hours every week listing all available assets (vehicles, machines, heavy equipment) at the depot and checking in on their status (available, down for maintenance, being maintained, etc.).Too often, depot or logistics managers rent additional equipment because they don’t have enough visibility into which assets are available. However, this is much more expensive than using internal resources and assets. With fleet tracking, it’s easier for fleet managers to maintain the right fleet size and avoid unnecessary purchases and rentals. 

Intelligent fleet tracking systems help fleet managers overcome communication barriers and lead better fleets. (Learn more about how fleet tracking works here.) Fleet tracking helps drivers get to their destinations safer and faster. It also helps them find the assets they need or the nearest one available to do their job. The software and mobile app monitors driving speeds, routes, idle time, and other factors to ensure projects are carried out in a timely fashion.

Most importantly, fleet tracking allows managers to see fleet utilization rates in real-time. Logifleet provides RFID driver identification to help fleet managers follow vehicle usage per employee. This is very useful for shared vehicles. Managers can also share this data with the driver so they can assess and adapt their own performance and manage their own working hours. 

Fleet tracking is also an essential tool to prevent cargo and vehicle theft. Lastly, it allows companies to track private vs. business usage for all fleet assets. These are just some of the powerful features you can enjoy with comprehensive fleet management software. Remember: delays, accidents, and theft are all factors that impact your fleet utilization rate!

Driver retention

Good drivers are always in high demand. If they don’t like their work environment, they’ll switch companies. They might get recruited by the competition. Driver retention is tied with employee satisfaction. This in turn, largely depends on leadership, working conditions, and pay. While you might not be able to afford promotions due to budget constraints, you can always increase driver retention by rewarding good drivers. The best way to motivate your team is to acknowledge outstanding work. 

But how do you track good vs. bad behavior? With fleet tracking of course! With modern-day telematics, it’s easy to monitor real-time and historical driving behaviors. Better driver retention strategies will help you maximize fleet utilization rates. After all, your vehicles and equipment can’t generate revenue without someone operating them!

Meeting increasing cost pressure

Margins are shrinking. Competition is rising. Budgets are tightening. How can fleet managers adapt to this type of high-pressure environment? By using fleet management software.

Depot managers are busy. Most of them don’t have time to visit construction sites to know what’s needed. Miscommunication and flawed data from the FMS may create unnecessary overhead.

Fleet management software collects valuable data that can reveal errors, waste, and even fraud. By setting up mileage limits and evaluating cost vs. revenue per vehicle and per mile, you can better understand how much money you’re really making. Fleet management software increases team productivity and generates immediate ROI for many companies across multiple industries. It grants visibility and helps managers better understand how their budget is doing, and areas for improvement. (Read more about how to reduce fleet costs here.)

Fuel consumption

Older vehicles may consume more fuel and drag down your vehicle utilization rate. Poor drivers who frequently idle or speed will reduce the vehicle’s fuel economy and increase wear and tear. Idling machines on-site also poses a huge problem and contributes to waste.

Most fleets spend a huge portion of their budget on fuel, so it’s important to cut down this major expense wherever possible. Luckily, fleet management software can show you which vehicle and/or driver is underperforming. Telematics data helps fleet managers make better decisions, faster.

Vehicle remarketing

According to a 2018 Government Fleet Research study, 44% of survey respondents cited “aged fleet/replacement budgeting” as a top concern.

Tracking fleet utilization can help fleet managers pinpoint which vehicles need to be sold and/or replaced. Sometimes it’s tricky to determine the optimal time to remarket a fleet vehicle. Fleet management software can show managers which assets are underperforming or even unnecessary to daily operations. Reducing fleet size is a major way to reduce fleet costs.

Route Optimization

A key part of reducing fuel consumption and increasing fleet efficiency is route optimization. 

Fleet management software such as Logifleet has a valuable tool to help you. The built-in route optimization tool is more robust than Google Maps or other free navigation tools. This route optimization tool allows fleet managers to plan out multi-stop routes for multiple vehicles running at the same time. It can accommodate last-minute changes and work with time constraints, making it easier to deliver exceptional customer service. 

Route optimization software also takes into account driver schedules and their vehicle type, so managers can always choose the “best tool for the job”. It’s easy for managers to find selected or closest available assets at any time because everything is shown on the same shared map. This convenient feature means vehicle assignments and schedules become a breeze. Now depot managers can avoid delays and get vehicles, equipment, and supplies to where they need to go, faster.

Interested in improving fleet scheduling and route optimization? Read more fleet scheduling best practices here.

Summary

In 2024, it’s essential to maximize your fleet utilization rate to get the most out of your fleet. Although it may be impossible to reach a 100% utilization rate, even a 10-15% increase will yield amazing benefits. These benefits are not all financial! 

A higher fleet utilization rate not only saves you money, it also improves employee safety, satisfaction and productivity. Running a smooth operation is easy with modern-day fleet management software. 

Interested in learning more about how Logifleet can help you maximize your fleet utilization rate? Book a free consultation call today!

Sources:

https://www.government-fleet.com/314018/2018-benchmarking-statistics?photo=314038