White Paper spring 2010 FLEET MANAGEMENT SERVICES: BEST PRACTICES

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1 White Paper spring 2010 FLEET MANAGEMENT SERVICES: BEST PRACTICES

2 What is fleet management? Fleet management services can go a long way in ensuring that your fleet is safe, legal, and running properly. The term fleet management covers a range of services including maintenance, roadside assistance, insurance, fuel management and more. Having the right mix of services can lead to a number of benefits, including: Better productivity and customer service Streamlined management and billing The ability to monitor and reduce transportation costs Safer vehicles and drivers A more efficient fleet Whether a company decides to manage their own fleet or choose a provider, they should consider which services they will need. In this paper we ll take a look at some of the most valuable fleet management services. WEB-BASED ADMINISTRATION Online fleet management (OFM) provides companies with a 24-hour online system to monitor the performance and costs of their vehicles. A fleet manager or administrator is usually assigned to administer this system and keep tabs on areas such as maintenance, orders, and invoices. The benefit of an OFM system is that it gives access to key fleet data, allowing administrators to make educated decisions regarding their fleet AND self-serve for a variety of administrative tasks to ensure that their fleet data is current and accurate. Most importantly, an OFM system allows administrators to generate detailed reports on all aspects of a company s fleet, from individual maintenance histories to complete fleet inventories. These regular report cards help businesses avoid excessive costs. 2

3 RELIABLE MAINTENANCE PLANS Good fleet maintenance is an essential step for businesses looking to reduce expenses. A smooth running fleet completes more sales, fulfills more deliveries, and makes more customers happy. It s simply more cost effective to maintain your fleet on a consistent basis than to repair broken vehicles later on. Companies have the option to maintain their fleet independently, or pay for a program from a fleet management provider. Providers offer a variety of options including full maintenance programs and administered programs. A full maintenance program is all-inclusive, meaning both regular and emergency services are covered by one monthly fee. This option is especially helpful for companies looking for fixed-cost operations and predictable maintenance expenses month-to-month. An administered program is a more discretionary option. Companies pay for maintenance from the provider s network of repair services only when they require it. A reserve program is similar to an administered program, except that the lessee pays a monthly fee for management services while the leasing company manages the account. The account is reconciled on a regular basis, and the lessee gets any surplus back. A good fleet management provider will be able to customize a combination of the above. In addition, the best providers are able to take advantage of their size and nationwide presence to provide discounts on well-known brands used for maintenance. 3

4 INSURANCE OPTIONS Companies with fleets have a different set of insurance needs than individuals. A large number of vehicles on the road equals a more complicated set of risks. Although businesses can organize their own insurance with local or national companies, many see a greater benefit by having a fleet management provider arrange it. In either case, the process starts by assessing a fleet to determine its particular risks and needs before drawing up a coverage plan. Due to their experience with fleets, however, leasing providers have the edge in knowing the insurance needs of similar clients over the long-term. And, because of their size, leasing providers can often arrange for flexible deductibles and lower premiums. They may even offer supplemental liability insurance for businesses that are already self-insured. What s more, their services normally cover claims management, insurance card processing, and safety consultation, which means more streamlined management and billing. The best providers also include driver training and risk management education as part of their insurance service, programs which lead to lower accident rates and premium costs. Due to their experience with fleets, leasing providers have the edge in knowing the insurance needs of similar clients over the long-term. 4

5 INTEGRATED FLEET TECHNOLOGY: TELEMATICS AND GPS Telematics is a way of monitoring a fleet via vehicle diagnostics and GPS tracking. Equipped with this technology, a company can see exactly where their vehicles and drivers are in the world, how well they are performing, and what steps need to be taken to improve safety and efficiency. Companies who implement telematics see a number of immediate benefits: Healthier Vehicles: by monitoring engine diagnostics, smog checks, and vehicle emissions, companies significantly reduce the costs involved in maintenance and environmental compliance. More Accurate Reporting: by generating reports on fuel mileage, excessive speed, idle times, and other driver habits, companies see greater fleet efficiency in proper utilization and, most notably, in fuel consumption. Better Mapping: with GPS capabilities, fleet managers can pinpoint where their vehicles are, right down to a street view. ACCIDENT AND RISK MANAGEMENT The larger a fleet, the greater the chance of accidents and the greater the administrative burden in collecting loss data and coordinating body repairs. A comprehensive fleet service plan will incorporate measures to reduce this risk, and the capacity to deal with accidents if they do occur. For example, to reduce risk, a company or fleet management provider might run motor vehicle record checks on potential drivers and provide training sessions for current employees. Providers also sometimes offer an initial risk management consultation, to establish what steps need to be taken to avoid accidents. If an accident happens, a business will want the vehicle back on the road as soon as possible. Someone must also determine whether an accident was preventable or nonpreventable, and be able to pursue those at fault. Fleet management providers typically have a quality repair network and an experienced team ready for this contingency. 5

6 DRIVER SUPPORT Fleet management includes services for drivers as well as their vehicles. Safe, well-trained drivers mean fewer accidents, lower insurance premiums, and higher customer satisfaction. Services regarding drivers should include: Safety: training sessions cut down on accidents, ensure drivers are compliant with regulatory standards, and provide some measure of legal protection. Behavior: running motor vehicle record checks and accident history reports to assess the risk rating of a driver can drastically reduce a company s potential liability. Taxable Benefits: many online fleet management systems give drivers the opportunity to report personal mileage and generate their own benefit reports. A comprehensive fleet management provider should offer all of the above. MONITORING FUEL COSTS A large part of controlling fleet costs lies in controlling fuel consumption. Knowing exactly how much fuel drivers use for their vehicles reveals how efficiently a fleet is operating. Some companies rely on drivers to provide their own fuel receipts. While this gives drivers a sense of autonomy, it also means that administrators must spend internal time organizing and tracking down these purchases. An alternative is a separate company fuel card, typically accepted at multiple fueling sites throughout the country. This card gives companies complete control over drivers spending, including the ability to prevent unauthorized purchases and set spending limits. Fuel costs are then automatically consolidated into one bill. Having a single card provides companies with valuable data on fleet performance. With regular card reports, administrators can track drivers usage using metrics such as cost per mile and miles per gallon, and determine if vehicles need maintenance or replacement. 6

7 24-HOUR ROADSIDE ASSISTANCE The key to any roadside assistance service is coverage. Toll-free assistance must be available 24/7, no matter where in the country a vehicle might be. The longer a vehicle is out of commission, the longer it will take for a company to reclaim those lost hours. Whether a company is choosing a fleet management provider or a separate entity to cover their roadside needs, the following services should always be included: Towing Battery Service/Vehicle Won t Start Flat Tire Assistance Fuel, Oil, Fluid and Water Delivery Service Lock-out Assistance Collision Assistance LICENSE AND TITLE MANAGEMENT One of the major benefits to working with a fleet management provider is that they are responsible for the red tape involving registration and titles. This option frees company fleet managers from a complicated and time-consuming task. In the case of a leasing company, the leasing company holds the title and is therefore able to coordinate dealings with the Department of Motor Vehicles. They manage the fleet s renewals, interstate re-registration, specialty plates and many other aspects of administration. One of the major benefits to working with a fleet management provider is that they are capable of coordinating registration and titles. 7

8 LEASES Copyright 2013 Merchants Fleet management. All rights reserved.

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