Fleet utilization refers to the strategic management and optimization of a company's vehicle fleet and associated assets to achieve maximum efficiency, productivity, and cost-effectiveness. It involves deploying and servicing resources in a manner that minimizes idle time, reduces operational costs, and enhances overall performance.
It’s important that companies work to maximize their ability to fully utilize their fleet, as well as to ensure they’re capable of making adjustments at a moment’s notice. But even with a small or mid-sized fleet, it’s often easier said than done. After all, trucks and trailers don’t stay in one place for long, and they’re often housed with other similar vehicles or equipment. Accurately keeping track of utilization and usage rates is by no means simple. Instead, it takes a concentrated effort on the part of fleet managers to ensure they have the best possible plan in place to keep track of how their resources are being used. Let’s take a look into what these plans look like, what their benefits are, and what you should keep in mind when creating your own.
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The Power of Knowing Your Fleet Utilization Rate
In order to improve your fleet utilization, you need a way to quantify your fleet’s current utilization. There are a number of strategies that can be used to make this assessment, but the one that will allow you to most effectively display your growth is a common metric referred to as your “fleet utilization rate.” In fact, it’s quite likely that you measure this already – our goal is to provide you with new perspectives on the ways you can apply this measurement to achieve your operational goals.
An standard asset utilization rate is a measure of how effectively your assets are being utilized in a given period. For fleet utilization specifically, this metric is going to be most concerned with your trailers and perhaps your trucks. Different companies may define this number in different ways, depending on their goals. In the first, the measurement is used to quantify the proportion of time that fleet assets are actively engaged in productive activities compared to idle or underutilized periods. This number is found by dividing total operational hours by total available hours. In the second, the measurement is used to quantify the number of fleet assets that are actively engaged in productive activities compared to those sitting idle or underutilized. This number is calculated by dividing the total number of assets currently in use to the total number of assets a company owns, including those that might currently be out of commission due to maintenance.
While most companies tend to focus on one metric or the other, both are important to consider when attempting to improve fleet utilization. An effective fleet optimization plan will only become more effective if it accounts for both the activity time of individual assets and the comparison between which assets are and aren’t being used in the first place. This allows you to not only make decisions to reduce idle time for individual resources, but it also helps you ensure that you are properly cycling through every asset that you have at your disposal.
The Importance of Optimizing Fleet Utilization
Fleet optimization is a critical aspect of modern business operations that can significantly impact a company's success and competitiveness. By strategically managing the allocation and usage of vehicles and trailers, businesses can unlock numerous advantages, including enhanced productivity, improved financial savings, and ongoing environmental benefits.
By efficiently managing the allocation and utilization of trailers and other fleet assets, companies can unlock numerous productivity benefits. Optimizing fleet utilization means making the most of available resources, ensuring that vehicles and trailers are utilized to their fullest potential. Since this means monitoring and working to minimize idle time and other downtime, the benefits to productivity are readily apparent. If you know when and how your trailers and other assets are being used, you can make appropriate decisions about maximizing that usage for a more productive fleet.
Efficient fleet management also leads to enhanced productivity in the form of a reduced need for maintenance. Trailers especially require periodic maintenance; by monitoring utilization, you can ensure that they are off the road long enough to undergo inspections to reduce disruptions caused by unexpected breakdowns and the need to wait for replacements or parts. Done properly, optimizing fleet utilization can also help you stagger inspection and preventive maintenance for different trailers so that only a small portion of your fleet is out of commission at any given time. It has a similar impact of providing knowledge of what is and isn’t available, too, which helps reduce drops in productivity from unexpected challenges; you’ll already know what’s there to help you solve whatever problem arises.
Improved Financial Savings
Optimizing fleet utilization is not only crucial for enhancing productivity but also for increasing financial savings. By strategically managing the allocation and usage of vehicles and trailers, businesses can unlock substantial cost reductions and improve their bottom line. The most readily available example is through utilization monitoring’s impact on fuel consumption, which is a major expense for any fleet-based operation. Optimized trailer utilization ensures that trailers are efficiently used, which reduces the need for unnecessary trips and, in turn, lowers fuel expenses.
Proactive maintenance is another financial advantage of fleet optimization. By conducting regular inspections and addressing maintenance needs promptly, companies can prevent costly breakdowns and expensive repairs. Trailers in good condition result in fewer maintenance expenses, contributing to financial savings. Optimal fleet utilization also leads to reduced labor costs. Strategic use of trailers, as well as strategic loading and route planning practices, allow drivers to complete more deliveries within a given time, resulting in higher productivity without additional labor expenses.
Ongoing Environmental Benefits
Implementing strategic measures to efficiently manage the allocation and usage of vehicles and trailers can contribute to sustainable practices and ongoing environmental benefits. One of the primary environmental benefits of fleet optimization is the reduction in carbon emissions. By optimizing routes and minimizing idle time, vehicles and trailers consume less fuel, leading to lower greenhouse gas emissions. Efficiently utilizing trailers also means that you’re only using the trucks and trailers you need, reducing vehicles on the road and further reducing emissions. This proactive approach aligns with efforts to combat climate change and reduce the overall carbon footprint.
Proper fleet utilization practices also reduce other waste generated by trucking and logistics operations. Through preventative maintenance efforts, fleet optimization extends a trailer’s lifecycle, which means that trailers are disposed of and replaced far less frequently. It also means that companies aren’t buying unneeded trailers, which can create an illusion that there is more demand for trailers than there actually is, leading to further production and disposal waste. These efforts toward a greener future can help bolster a company’s reputation and remain in compliance with government and industry standards.
How Fleet Tracking Can Maximize Fleet Utilization
Once you understand the impact of maximizing fleet utilization, the question naturally turns to focus on the best strategies for maximizing fleet utilization. Many companies already have ideas about how they can do so. Some might rely on a consistent cycle of trailer usage, with trailers being designated first, second, third, etc., in turn to be used; others might rely on telematics systems installed in their trucks. While both of these strategies can help to a degree, they have their failings. The first method is unresponsive, not designed to adjust to unexpected changes in schedule, circumstance, or priority; the second does not account for the fact that telematics are blind to trailer location when the trailer is disconnected or the truck is turned off. And when it comes to fleet utilization, it is incredibly important to monitor trailers directly at every venture. After all, a truck can’t make deliveries if an appropriate trailer isn’t available.
The best way to maximize fleet utilization is to invest in a fleet tracking solution that can account for not only trucks, but also trailers and their contents. This helps you maintain visibility of your trailers not only when they’re actively in transit, but also when they’re waiting in the yard or experiencing idle time within their larger journey. These solutions are largely automated, recording location on a basis of a set timeframe or initiated through specific parameters such as movement. This means the system can just run in the background and collect the necessary data without adding steps for drivers and fleet managers beyond initial setup. An effective fleet tracking solution centers on trailer tracking to help you understand the usage of your trailers in terms of where they are, when they’re sitting idle, and even how full they are during any given trip. This visibility can then be used to make decisions to improve fleet utilization and to respond in real-time to any unexpected challenges.
Enacting an Effective Fleet Tracking Strategy
When it comes to maximizing fleet utilization, investing in fleet tracking is only part of the solution. This investment must come with due consideration and effort on the part of your company in order to make the most of its game-changing capabilities. You can’t just have the technology, you need a well-planned strategy to ensure you’re investing in the correct solution for your fleet and using it to its fullest potential. This can be broken down into four simple steps.
1. Identify your fleet tracking goals.
To harness the full potential of your fleet, it is essential to set clear fleet tracking goals that align with your organization's objectives. This will help you assess the effectiveness of a given strategy and give you guidance for future expansion. Your fleet tracking objectives should be defined based on the specific needs of your business. Consider the size of your fleet, the assets you want to better utilize, and your budget. You should also explicitly define the problem you’re trying to solve with fleet tracking. Are you trying to make sure certain trailers don’t fall through the cracks? Are you attempting to reduce overall dwell time? Are you looking to improve maintenance practices? Whether it’s these problems or just the general goal of maintaining visibility of fleet utilization practices, it’s important to reinforce your reasons for pursuing fleet tracking while establishing your goals.
Once you’ve established what these goals are, it’s also important to assess your current effectiveness toward achieving that goal. This might rely on your fleet utilization rate or any other metric that your company applies in self-assessment. This baseline will help you track the impact of your fleet tracking solution in a way that is easily quantifiable. After all, all relevant stakeholders should be involved in the process of identifying fleet tracking goals, including fleet managers, drivers, and other team members. It’s important to have a baseline or marker of success that can be easily communicated between them.
2. Find a fleet tracking solution that fits your needs.
Once you’ve established your goals and fleet tracking needs, the next step is to identify a solution that meets your requirements. With a plethora of options available, this can seem like a daunting task, but it’s really a simple matter of breaking down what you need and what any given solution has to offer. Start by finding solutions that can address your fleet utilization goals and operational challenges. Not all solutions are made to address every single problem, so it’s important to know what a system can and can’t do. You also need to consider the scalability of the solution. As your business grows, so will your fleet. You’ll need a solution that can adapt and accommodate the expansion without compromising performance or increasing complexity. At this stage, it’s also important to assess the advanced, add-on features that a solution offers, such as geofencing and predictive analytics.
More human considerations must also be taken into account. The right solution should be user-friendly and, when possible, compatible with your existing systems. After all, the success of any fleet tracking system depends on how well it integrates with your existing processes and how easily your team can interpret and utilize the data it generates. It’s equally important to consider a provider’s reputation and their willingness to work with you to meet your needs and ease the implementation experience. The technology is likely new to you, but it is not new to the people providing it; a willingness to openly communicate and help you learn is absolutely vital for the success of your system.
3. Hold training and informational sessions for employees.
As we’ve already discussed, it’s important to keep everyone who will be using and benefiting from your fleet tracking system involved in the process of implementing the system. In order to do so, they need to be frequently updated on the use of the system and progress toward company goals. Fleet tracking training equips employees with the knowledge and skills to navigate a new system effectively. From understanding the user interface to interpreting key data like fleet utilization metrics, the training empowers employees to leverage the system's full potential.
Further, these sessions ensure that employees understand the significance of fleet utilization and its impact on the company's bottom line. This engages them directly in becoming part of the solution and provides explanation for why company processes are changing to accommodate the system. These sessions can also be used to address any concerns or misconceptions about the fleet tracking system, promoting a culture of transparency and cooperation. Employees are more likely to embrace the technology when they perceive it as a tool to support their efforts, rather than a means of surveillance.
4. Adjust your plan according to expansion or other new needs.
Once your company is in a position to begin expanding the solution to more assets or new operational challenges, it’s crucial to reevaluate your fleet utilization goals and fleet tracking plan to reflect those changes. This process isn’t going to look the same for every company, as different companies will face different challenges and expand in different ways. The shared aspects include simply identifying new trailers or other fleet assets that you wish to track and assessing changes in budget. Depending on what new needs arise, it may become pertinent to enable tags with new kinds of sensors to gain visibility of temperature, humidity, shock, tampering, or whatever other new evaluation point has arisen.
Take Your Fleet Utilization Plan to the Next Level
Link Labs offers a scalable fleet tracking solution that can be used to track your trailers, cargo, equipment, trucks, and more. Although we can integrate with your existing systems, we are not reliant on telematics and can provide visibility even when your trailer is disconnected or your truck is turned off. Our priority is to help you paint a full picture of your fleet’s daily activities so you have the power to make decisions that will have a lasting impact on your fleet utilization and responsiveness. To learn more about how our fleet tracking solution can work for you, book a demo with our experts today!