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Data Is Power: Reduce Risk, Improve Fuel Productivity

By Manuel Tamayo - Element Fleet Management Mexico
CEO

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Manuel Tamayo By Manuel Tamayo | CEO - Tue, 09/27/2022 - 09:00

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The evolution of the mobility and transportation sector has accelerated in recent years, driven by the unprecedented challenges encountered in the last two years but also as a result of the ability to gather data on almost all aspects of vehicles and mobility.  

Inflation has reached all-time highs in North America and these cost pressures impact many aspects of commercial fleet management, including vehicle acquisition, fuel usage and maintenance. Market pressures are largely driven by post-pandemic supply and demand shocks.

Taking action to mitigate risk and reduce costs is no doubt top of mind for most fleet managers and the use of advanced analytics to mine data for actionable insights can serve as an ally for smart decision-making. As the saying goes, cash is king, but now, so is information. 

Having the right data will provide insights across an entire fleet to prevent problems before they arise, optimize resources with real-time information and provide fleet administrators with valuable information to achieve cost reductions during these uncertain times. Having good data will allow you to react with velocity and intelligence.

In our 2022 Market Pulse Survey, we identified the primary concerns of our clients: 91 percent of fleet leaders rank controlling operating costs as among their Top 3  financial priorities and 81 percent rank supply chain issues among their Top 3  focus areas. Both concerns can be effectively addressed by collecting, analyzing, and using data as a management tool. 

The industry has evolved from GPS to telematics. In the past, tracking the location of a vehicle was a great plus but now it is a given. Telematics is a system that consists of sensors that are connected to vehicles to measure various factors related to the vehicle itself. 

By using fleet telematics, it is possible to track usage, either hours or kilometers, and plan for preventive maintenance using reports and alerts. This can help decrease expenses by anticipating high-cost corrective maintenance with the proper diagnosis (voltage changes, powertrain malfunction, coolant temperature and others). Another relevant factor are the drivers. The collection of data has led fleet management companies together with fleet managers to identify areas of risk or improvement directly related to adriver’s skills. As traffic patterns return to normal, road accidents and fatalities are on the rise and safety issues need to be prioritized. 

Proper training and internal communication with vehicle operators based on data collection is critical. Influencing driver behavior by providing eco-driving tips related to the speed limit and avoiding aggressive driving and motor idling will both reduce costs and the risk of accidents. A study by TeletracNav indicates that 42 percent of fleet managers have suffered fewer safety incidents as a result of using fleet-tracking software to monitor driver behavior.

In addition, one of the most important factors in cost control at the moment is obviously the price of fuel but with the proper information, fleet managers can achieve greater efficiencies. Ensuring you have the most fuel-efficient vehicles for each task in your fleet is critical. Further, reviewing cargo characteristics is important to make sure that vehicles are not overloaded to avoid fuel waste. Fleet managers can also leverage data to locate the closest and lowest-cost gas stations, using recommended fuel grade guidance provided by Original Equipment Manufacturers (OEMs) to optimize expenditures. 

To provide an example, we were able to identify a total annual 10 percent cost savings in fuel expense by identifying the idling time of the fleet and by locating and avoiding 10 stations with high-cost fuel that were used by more than 40 percent of the fleet.

There is no doubt that it is important to plan ahead and to be strategic with your vehicle replacement choices. Renewals should be prioritized based on fleet aging and lease extensions can be taken into consideration when market options are available and are suitable to your fleet needs. The demand for used vehicles is slowing somewhat but remains high. 

Globally there are few certainties on the horizon, beyond the fact that uncertainty is likely here to stay. External factors, such as fuel price volatility and supply chain shocks, are factors beyond our control, but we can influence the internal behaviors of our organizations. For this reason, using and analyzing data to optimize fleet management can be an ally for businesses looking to reduce costs and risk and to boost their competitiveness. 

 

References: https://www.teletracnavman.com/resources/blog/9-must-know-stats-on-the-state-of-fleet-management

Photo by:   Manuel Tamayo

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