Private fleet management survey

Sept. 1, 2006
drivers and fuel concern private fleet managers more than any other issues. Those findings are contained in a recently released survey of 100 managers commissioned by PHH FirstFleet Corporation

Who would have thought — drivers and fuel concern private fleet managers more than any other issues. Those findings are contained in a recently released survey of 100 managers commissioned by PHH FirstFleet Corporation and conducted by Starmark Market Intelligence. PHH FirstFleet is a national provider of asset management, financial services, and operations support to the transportation industry. It owns or manages more than 15,000 trucks, tractors, and trailers for a client list that includes Kraft, Maytag, Hormel, and Tropicana.

The survey was conducted at the PHH FirstFleet Spring Fleet Managers' Conference and on the Internet. Total responses were almost 50%, up from a response rate of 25% in 2005 and much higher than the 16% response to a similar survey conducted in the fall of 2004.

Driver shortages combined with persistently high fuel prices produce an environment that is difficult to overcome, fleet managers say. Many fleets now look to improved driver retention as a strategy for reducing the economic impact of high turnover rates. Redesigned driver compensation packages provide one tool for increasing retention. Good public relations are seen as another tool. “We need to convince people that being a truck driver is a very good and satisfying occupation, showing the public a positive image of the industry,” one manager wrote in the comments section of the survey.

Some fleet managers report fuel costs rising substantially above budgeted levels. Particularly in the food industry, fleet managers see fuel costs as an expense that cannot be passed on to customers. That requires managers to look for any alternative to offset fuel price increases. Several managers report adopting fuel hedging policies. One transportation manager for a supermarket chain commented that his biggest challenge is understanding and controlling escalating operating costs. “Those who are successful at this will have the greatest chance for survival,” he wrote.

Telematics are seen as the newest tool for fighting excess fuel consumption, says Michael C Lewis, PHH FirstFleet president and general manager. Private fleets are using the data available from telematics to understand fuel consumption, especially with regard to the effect of new emission standards on fuel economy and driver behavior. Telematics is the general term for a wide range of recording and communications devices used by fleets. Most systems provide a combination of global positioning and remote communication.

In the survey, 60% of respondents said their companies are adopting systems to track equipment status and driver activity. Of those adopting telematics systems, 79% are mounting the equipment on the vehicle dashboard allowing interaction with drivers. Handheld devices and hidden black boxes are reported to be only half as common as dashboard mounted systems. Equipment supplied by Qualcomm and Xata has been adopted most commonly.

Managers in fleets that have adopted tracking and communications systems report positive results with 83% saying the systems have helped improve performance. Among those, 68% report that data from the recording systems has become fundamental to the entire fleet operation. In this regard, 39% of respondents report using tracking technology to optimize routes and for fuel management. An almost equal number of respondents, 38%, report thinking that drivers perform better and operate vehicles more responsibly if they know their activity is being monitored. One fleet manager noted that recording and communication systems are a top priority for improving fleet performance, because the systems allow managers to collect and measure data giving them the ability to separate fact from fiction and to implement operational changes based on collected information.

Equipment security remains a low priority with only 20% of respondents citing it as a reason for adopting telematics.

While investments have not been big and programs have been low key according to 50% of respondents, 65% of those taking the survey reported some sort of environment initiative within their companies. These initiatives include recycling and responsible handling of waste products. The majority of respondents with such programs report using third party contractors for the work. In general, survey respondents have been reluctant to provide details about funding environmental intitiatives.

Environmental programs are increasing, with 67% of respondents reporting plans for additional investment in 2006. Fleet managers seem to deal with environmental programs on a take-it-as-it-comes basis, with 64% reporting no active plans in place to adopt the next generation of engines in 2010.