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Navigating Fleet Management Compliance
Ensure Operational Harmony by Understanding Essential Compliance Requirements
Drivers are obligated to maintain a comprehensive record of their activities through an Electronic Log (ELog). This log should encompass essential details such as total mileage, truck, tractor or trailer number, carrier name, main office address, driver’s signature, co-driver’s name, designated time zone, remarks, total hours, shipping document number(s) or shipper’s name, and details about the transported commodity.
The number of hours a driver can operate a commercial vehicle in a single day is governed by the Hours of Service (HOS), which are set forth in precise standards by the FMCSA. Drivers operating within the United States must use an Electronic Logging Device (ELD) to record their Record of Duty Status (RODS) and ensure that the required Hours of Service (HOS) are adhered to in order to comply with these regulations.
According to FMCSA regulations, commercial carriers adhere to two distinct driving limits: the 11-hour driving limit and the 14-hour driving window. This implies that within a 14-hour consecutive window, a driver can operate a commercial vehicle for a maximum of 11 hours. Following each 14-hour driving window, drivers are required to take a minimum of 10 consecutive hours off duty. In compliance with the Canadian Hours of Service Rule, driving is limited to 13 hours a day within a 16-hour workday, and drivers must observe 8 consecutive hours off duty.
Adverse driving conditions exceptions pertain to unforeseen driving delays caused by uncontrollable circumstances, such as inclement weather, lane closures, etc. Notably, common driving conditions like rush-hour traffic or ongoing construction projects do not fall within the scope of these exceptions. Under this rule, drivers are allowed an additional two hours, extending the 11-hour driving limit to 13 hours, based on the distance one could have covered under normal conditions. It is important to note that any extended driving hours must be completed within the 14-hour driving window. For more detailed information, please refer to the FMCSA website.
The ELD mandate is applicable to a diversify portion of fleets and drivers operating commercial motor vehicles (CMVs) in the United States. If you are mandated to record your hours of service, it is highly likely that compliance with the ELD mandate is a requisite for you.
Certain exemptions apply to the ELD mandate. You are not obligated to use an ELD if:
- You use paper logs for no more than eight days during any 30-day consecutive period.
- You are a driveaway-towaway driver transporting an empty vehicle for sale, lease, or repair.
- You operate a vehicle manufactured before the model year 2000.
Additionally, the FMCSA has extended the deadline for compliance for specific companies, such as the United Parcel Service (October 2022), Motion Picture Association of America (January 2023), and Truck Renting and Leasing Association (October 2022).
Personal use of a commercial vehicle is not subject to the Federal Hours-of-Service Regulations if the driving activity is not in support of a business.
If a non-compliant ELD is identified during its use, the motor carrier will be notified and provided with an eight-day window to replace the non-compliant device with one that meets the required standards. In instances of widespread non-compliance, the FMCSA may engage with the affected motor carrier to determine a mutually agreed-upon timeframe for the replacement of non-compliant devices.
IFTA, or the International Fuel Tax Agreement, is a cooperative agreement among U.S. states and Canadian provinces concerning the taxation of motor fuels. Through IFTA, commercial motor carriers can register in a single state and have the tax payments allocated to all participating jurisdictions based on their proportional usage. This system ensures a fair distribution of tax assessments across multiple regions.
Commercial carriers need to sign up for the agreement in order to operate a vehicle that qualifies for IFTA participation. A motor vehicle that satisfies one of the following requirements and is used, maintained, or designed for the transportation of people or property is considered qualified.
- Axles three or more, irrespective of weight
- Two axles with a gross vehicle weight over 26,000 pounds.
- Used in combination with a total gross vehicle weight over 26,000 pounds.
Fleet Management Industry
Explore answers to commonly asked questions about the Fleet Management industry.
The fleet management market encompasses the industry and businesses involved in fleet services, including SaaS providers, companies with commercial vehicle fleets, individual and organizational clients, and the buying and selling of these services, including pricing structures.
Additionally, the term “fleet management market” can describe the environment and system that facilitates the exchange, coordination, and allocation of fleet services and resources among companies and clients.
In the past five years, the global fleet management market has experienced substantial growth. Its value was USD 13.78 billion in 2017, and experts anticipate it to reach USD 28.66 billion by 2022, marking an impressive increase of nearly 108%.
As of 2020, the fleet management market’s size reached USD 16 billion, with a projected compound annual growth rate (CAGR) of 15% from 2021 to 2027. The industry is expected to be valued at USD 45 billion by 2027.
Several factors are driving the growth of the fleet management market, including an increased focus on operational efficiency by fleet operators, the advent of artificial intelligence (AI) technologies, widespread adoption of the internet of things (IoT), a surge in the use of big data analytics and cloud computing solutions, and the continuous expansion of connected vehicle tracking technologies.
This segment represents the business sector within the fleet management market, specializing in providing Software as a Service (SaaS) solutions to optimize fleet management operations. These companies deliver comprehensive and advanced tools that address various aspects of fleet management, such as maintenance, fuel consumption, logging hours, and more.
It’s important to highlight that these technologies have played a pivotal role in shaping the landscape of fleet management trends, ushering in a transformative era for the market. The fleet management industry collaborates with and supports other companies engaged in:
- Agriculture
- Food and beverage
- Public transport
- Security
- Oil and gas
- Transport and distribution
- Mining
- Landscaping
- Rental and leasing
- Pest control
- Healthcare
- Emergency services
- Education
- Government activities
- Fast-moving consumer goods
- Utilities
- Telecom
- Construction
Fleet management trends are significant events in the fleet management market that can revolutionize a company’s performance and product demand negatively or positively.
Here are some examples of trends seen or forecasted to emerge in the fleet management industry:
- Electric fleet vehicles. In 2020, California Governor Gavin Newsom signed an executive order requiring all new cars and trucks sold in the state to be emission-free by 2035. As a fleet manager, prepare for this by projecting and comparing costs for fuel, charging, purchasing EVs, etc.
- Increased remote fleet management. The COVID-19 pandemic has forced industries to operate remotely and limit physical contact. Even when the pandemic ends, fleet managers are likely to continue enacting remote fleet management. This compels fleet managers to establish more effective remote fleet management strategies. Maximize the use of fleet management technologies to guarantee real-time operational visibility across multiple branches.
Fleet life cycle management includes the process of acquiring, monitoring, replacing, and de-fleeting your commercial vehicles. It refers to the decisions you make to get the most value out of your commercial vehicles. It’s an essential aspect of fleet management that involves computing your vehicles’ total operating costs, including their purchase prices.
Besides the initial price, fleet life cycle management takes into account the costs for licensing, insurance, fuel, maintenance, and parts replacement. It also includes administrative expenses, vehicles’ resale value, downtime due to repairs, and other productivity losses.
The process by which commercial fleets are handled is called commercial fleet management.
Commercial fleet management has several components:
- Driver and asset safety. The safety of the drivers and vehicles, among other assets, is the top priority of commercial fleet management. The safety procedures are enforced through training, policies, and incentive programs.
- Operational efficiency and cost-effectiveness. Fleet operations need to be streamlined to maximize revenue-generating capacity and minimize needless expenses.
- Regulatory compliance. Companies with commercial fleets that don’t comply with government regulations are penalized with steep fines or even shut down.
- Workforce management. Recruitment, driver work experience, employee churn, and other fleet workforce-related aspects are all covered under the commercial fleet management umbrella.
A fleet management workflow is a repeatable and measurable series of steps or tasks organized in the proper sequence to accomplish set goals.
Workflows must be documented so the responsible parties can track progress. Many workflows are visualized using flowcharts and checklists or are written and displayed in easy-to-access areas or platforms.
Typical workflows run by commercial vehicle companies are:
- Driver workflow
- Vehicle maintenance
- Vehicle dispatch
- Purchase orders
- Cargo delivery
- Driver training
- Vehicle inspection
Logistics fleet management is the supervision of interrelated processes associated with fleet asset movement and organization.
These processes include vehicle leasing, financing, licensing, maintenance, remarketing, issue management, and supply chain. It also involves managing drivers, fuel, and vehicle speed.
Improving your logistics fleet management means boosting business productivity. Here are some strategies you can do to accomplish this:
- Complete electronic DVIRs to reduce the chances for inspection documentation errors. It also saves drivers time and effort that they can spend on other tasks. Electronic DVIRs even eliminate the risk of losing information and ease Department of Transportation (DoT) inspectors’ access to the data anytime, leading to less downtime and greater productivity.
- Use fleet management software to centralize all related data, and automate and speed up workflows for efficient fleet management. You can even integrate functions and technologies for increased operational visibility and seamless team coordination. You can get instant access to performance metrics to advance your fleet and avoid wasting time with manual data entry.
Fleet management plans are the blueprint fleet owners and managers use to streamline their fleet operations and grow their revenue.
The plan covers anything related to fleet management, such as vehicles, drivers, fuel consumption, hiring, vehicle procurement and disposal, and compliance, along with your fleet management strategies.
Without a fleet management plan, companies are more likely to operate in a disorganized manner.
The steps to create an effective fleet management plan are:
- Run an audit.
- Set goals.
- Detail/document your fleet management workflows and tools.
- Set up your data tracking.
- Strengthen team collaboration.
- Measure/analyze your results.
A fleet management dashboard is your primary command center that displays fleet management KPIs and all related information within specified periods.
A fleet management dashboard also provides full visibility into items like performance, fuel and maintenance expenses, live fleet activity updates, critical alerts, and more. The dashboard can even present an overview of your fleet’s historical and current performance data for quick comparisons and analyses.
Your fleet management dashboard is a critical point of data access. When picking the right fleet management software, ensure that the dashboard is intuitive, customizable, and organized. It should display all the information you need in an easy-to-understand format.
Fleet management operations are the daily activities that ensure your fleet runs smoothly. These operations cover processes and workflows related to various fleet management aspects, such as: Vehicles, equipment, and assets procurement; replacement; and storage Vehicles and asset life cycle and utilization management Drivers and license checks Vehicle maintenance and repair Fuel and emissions Driver coaching, training, and reward programs Vehicle dispatch and scheduling Vehicle inspection, audits, and defect reporting Vehicle and parts inventory Regulatory and legal compliance Budget, cost control, and revenue forecasting Insurance management Accident and risk management HR and other back-office tasks
Types of Fleet Management
Discover the various types of Fleet Management with our FAQs. Learn about diverse solutions and industry-specific applications
A sustainable fleet management strategy aims to lower environmental impacts through various best practices, such as:
- Fleet right-sizing. Defining the proper fleet size entails considering your fleet’s operations, needs, and mobility with your operational goals. To scale your fleet, identify and eliminate inefficient vehicles first. Then replace them, if necessary, with those that are more productive and consume less fuel. By right-sizing your fleet, you can identify opportunities to save on your vehicles’ maintenance and travel throughout their life cycle. You can also minimize vehicle purchases and optimize fuel usage and other operating expenses.
- Lower road traffic generated. Reducing the number of miles traveled enables your vehicles to avoid unnecessary trips and to contribute to carbon emissions. This prevents excessive fuel usage and vehicle wear and tear. To lower travel mileage, assess the need for the trip, consolidate routes, and optimize the delivery time and distances with fleet management software.
Increasing your fleet’s fuel efficiency also makes for green fleets. Do that by:
- Procuring low-consumption vehicles, such as hybrid electric vehicles (HEVs); run suitability assessments to see whether electric fleet management is feasible for your business
- Equipping your drivers with fuel efficiency training strategies
- Executing a functional fleet maintenance program and paying attention to your vehicles’ pneumatic pressures to keep them in optimal conditions
- Avoiding vehicle idling
- Using alternative fuels, such as biodiesel, renewable diesel blends, and electricity — as in HEVs
Remote fleet management entails using innovative technologies to monitor fleet assets from a distance and remain connected with drivers and other key staff.
Remote fleet management offers these advantages:
- Real-time receipt of relevant information. With connected technologies, you can instantly receive notifications, information, fault codes, etc. Your dashboard can also refresh and present timely updates of your fleets’ activities and conditions, enabling you to take immediate action when needed.
- Increased fleet operations’ visibility. Remote fleet management gives you comprehensive top-level views of your fleets, which is especially helpful when managing multiple branches. You don’t need to physically go to every office to know how things are. From your dashboard, you can see consolidated reports, or summaries of all branches’ fleet performance so you can supervise closely despite the distance.
- Eased coordination with multiple branches. Remote fleet management allows you to communicate with your personnel and delegate tasks, work orders, and others anytime. GPS tracking systems integrated into your remote fleet management solution also let you contact nearby places of interest (e.g., fuel stations, service shops, other vehicles, etc.) whenever needed.
Fleet accident management is a process designed to reduce accidents, handle fleet vehicle claims, repairs, etc.
A carefully designed and executed fleet accident management system:
- Establishes your fleet safety management programs
- Minimizes the occurrence of accidents
- Decreases the disruption of your operations
- Identifies at-risk drivers and implements the proper coaching strategies and methods needed to correct unsafe driving practices
- Reduces costs
Fleet inventory management helps you take stock of all of your assets and monitor their availability and statuses.
Without fleet inventory management, you may have fleet parts or supplies that are unaccounted for — especially if you have hundreds, if not thousands, of assets. Another scenario is you won’t have the spare parts on hand when your commercial vehicles need repairs.
Fleet inventory management helps you forecast the supplies or vehicle parts you need in stock to ensure smoother fleet operations.
Inventory managers who use software to modernize and streamline their fleet asset management process receive alerts or prompts when they’ve run low on a specific product or when they’re overstocked, allowing them to make sure the supplies or parts are ordered on time.
Fleet Management Performance
Elevating Operations through Strategic Metrics and Quality Standards
A fleet management key performance indicator (KPI) is a measure of the effectiveness of your fleet management strategy.
This KPI can assist you in the decision-making process and enables you to better plan and forecast.
Some useful fleet management KPIs are:
- Road safety. KPIs around the safety of your drivers, vehicles, properties, and other motorists are a best practice. You can create fleet management metrics and KPIs according to the number of incidents in a given period. Telematics data and dashcam footage are also useful for determining drivers’ performance by flagging unsafe driving practices; developing scorecards, coaching programs, and reward systems; enhancing asset security, etc.
- Total cost of ownership of fleet vehicles. This aggregate KPI totals the vehicle’s procurement price, fuel consumption, licenses, insurance, taxes, storage fees, replacement cost, maintenance and downtime costs, and other associated expenses for vehicle ownership over time. The results give you a complete picture of how much the fleet vehicles cost you. With this data, you can compare the total cost of ownership with income and identify opportunities to increase your fleet’s cost-efficiency. Once you’ve computed the total cost of ownership, set KPIs to determine when to maintain or replace your vehicles.
- Regulatory compliance. Stay on top of your compliance with applicable transport rules. Doing so minimizes potential penalties and legal repercussions. Monitor the completion of daily vehicle inspection reports (DVIRs), track your drivers’ Hours of Service (HOS), and incorporate HOS provisions into your company policies.
- Fleet utilization and productivity. This KPI reveals the amount of time you actively use your vehicles. You can calculate the yearly operating hours and compare them with the driving hours to determine vehicle under- or over-utilization. You can then identify the factors causing it — such as ongoing maintenance — and decide on the best interventions to boost your fleet’s productivity. Apply proper fleet reporting and data management procedures to organize and consolidate utilization metrics and generate accurate productivity reports.
Fleet management metrics are measurements and statistics of various fleet performance aspects.
Together with your fleet management KPIs, these metrics are useful for assessing and tracking your fleet’s productivity and profitability. These quantitative assessments also help you analyze and compare your fleet operations more easily across different periods.
Some fleet management metrics you can monitor are:
- Driver safety: The number of harsh driving events, high-risk incidents, and speeding events
- Fuel efficiency: Kilometers per liter (of fuel burned), duration of engine idling, and frequency of unauthorized fuel consumption
- Productivity: Mileage and time on site
- Asset utilization: Assets inactive for more than two days
- Preventative maintenance or predictive maintenance: The number of unexpected maintenance events
Fleet management quality is the condition of fleet management in all stages. This refers particularly to the logistics side — from dispatch to actual travel to ensuring on-time service delivery.
Determining your fleet management’s quality requires that you capture, organize, and analyze data. This lets you assess whether your processes are working.
Fleet management quality measures the excellence of your interrelated fleet management tasks, procedures, and work items. It should indicate whether or not you carried out your fleet management processes with minimum inefficiencies or cost overages.
This can also include insignificant variations and tolerant defect measurements.
Fleet Management Costs
Understanding the Financial Landscape by delving into the Costs of Fleet Management and Strategies for Effective Cost Management
Fleet management costs refer to all expenses and fees incurred that keep your commercial fleet running. In short, it’s the cost of doing business.
These costs tend to fall under two spending categories:
- Capital costs. These include acquisition — not only the actual purchased vehicle price but also the cost of obtaining the finances — ongoing vehicle financing, and depreciation.
- Operating expenses. These include vehicle fuel, service, maintenance, and repair; taxes; and insurance premiums.
Other expenses can include:
- Fleet management software costs such as buying, installing, and renewing your subscription, if applicable
- Personnel salaries
- Building expenses
- Vehicle remarketing
- Toll and other special fees
- Costs for accidents, theft recovery, and other incidents, etc.
On average, most fleet management software can cost around USD 35 per month for each vehicle. That’s over USD 35,000 annually if a fleet has over 10 vehicles.
Several factors can affect the cost of your fleet management software.
For example, the cost of procuring the software can be reduced if you subscribe to several accounts all at once. Also, if you opt only for a few important features rather than the software provider’s complete offering, you might also be billed less for the subscription. Additionally, the length of the contract and terms of service agreements can sometimes reduce fleet management software costs.
Fleet Management Optimization
Maximizing Efficiency by implying proven Strategies for Enhancing Fleet Management and Boosting Operational Performance
A carefully crafted fleet management process leads to efficient and profit-generating fleet operations.
Some of the best ways to optimize fleet management are:
- Use fleet management software. Integrating fleet management software into your fleet operations eliminates (or reduces) manual, paper-based processes. This allows for efficient collaboration, seamless workflows, and improved productivity.
- Centralize fleet data. Placing your fleet information in one location makes it easier and faster to access, store, organize, and analyze your data. For instance, you can use fleet management software that integrates seamlessly with your other fleet solutions. This gives you a comprehensive view of your fleet data without manually pulling information from each source.
- Streamline preventive maintenance. Proactively setting regular preventive maintenance schedules increases the lifespan of your fleet vehicles. This ensures your vehicles are in optimum condition at all times.
Fleet management optimization is the practice of enhancing fleet performance and fleet management quality throughout its entire life cycle — from financing to compliance, maintenance, driver supervision, and more.
It’s the maximization of your fleet vehicles, drives, and other resources to help attain your overarching business goals. It also refers to all activities and efforts to improve fleet management, particularly with the use of fleet management solutions.