Regardless of the industry, having company transportation is essential for the functioning of a business. The management of the different modes of transport, such as commercial cars, vans, trucks, aircraft, ships and rail cars for business purposes is known as fleet management. Majority of businesses utilize road vehicles while companies involved in the shipping of goods use larger modes of transport.

Effective fleet management ensures smooth day-to-day functioning and overall reduced costs. Areas incorporated under fleet management include fleet vehicle financing, vehicle maintenance, remarketing, tracking of vehicles, driver management, fuel management, speed management and more.

The growth of the fleet management industry is driven by factors such as centralization of fleet management, increase in mobility budget, risk and safety factors, driverless/self-driven vehicles and a greater focus on mobility management. The functions of fleet management can be undertaken by an in-house team or outsourced to a service provider. While the fleet leasing model is popular in Europe and North America, purchasing is the preferred format in the Asia Pacific region and Latin America.

Here are 5 of the challenges facing the fleet management industry:

Volatility of Fuel Prices

All fleets run on fuel, and accordingly, the price of fuel directly affects the running expenses of an overall fleet. The volatility of fuel prices poses a constant challenge to fleet management, as it becomes necessary to balance the costs in consideration of overall expenses and budgetary efficiency. Although fuel costs cannot be controlled, there are means to mitigate the challenge of rising fuel costs.

Planning and budgeting for possible fuel price hikes are ideal, by using vehicles that are fuel-efficient, monitoring the use of the vehicles and addressing driver actions that increase fuel use, such as speeding and idling.

Technology Advancement

Technology is advancing at a rapid pace, posing as both an opportunity and a challenge. While technology advancements offer improved machinery, more fuel-efficient vehicles, and greater automation, there are consistently newer models on the market, indicating a shorter lifespan for current vehicles. Remarketing, or reselling of older vehicles and updating the fleet are a major challenge for the industry.

For a successful vehicle and asset management system, thorough research is required into the vehicle models so a balance can be kept between new technology and costs involved. Purchase of vehicles that have a long life and good resale value are recommended.

Driver Safety and Productivity

A central challenge to the fleet management industry is the careful management of vehicle drivers, so as to maintain productivity, reduce risks of accidents and remove avoidable overhead costs by encouraging desired driver behavior.

Due to strides in technology, there are various means with which drivers can be monitored while on the road and in between destinations for optimum service.

Local Regulations

The globalization of fleet management brings with it its own set of challenges. Each country has specific vehicular regulations and emission guidelines which need to be met at all times for smooth functioning.

To target the challenges of local regulations, fleet management providers have taken to procuring local experts to advise on the necessary changes required for the fleet for complaint execution.

Fleet Accessibility

To maximize the benefits of a smaller fleet, it is important to have precise tracking, so that fleet management can identify exactly where each vehicle is and its condition. Without careful tracking, the required number of vehicles rises, resulting in unwanted costs.

For optimum management of a fleet, advanced tracking software is ideal, through which fleet managers can identify where each and every vehicle is and which vehicles can be re-routed to suit the needs of the company.

The fleet management industry is growing at a rapid pace at a global level, becoming a necessary part of all kinds of businesses. There are several challenges which face the industry, but in an effort to beat the competition, a variety of solutions are available to meet the challenges of fleet management.