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Vehicle management technology key to reducing cost, increasing profit

Jan. 8, 2021
Properly implemented solutions can provide more accurate job estimates, increase tax refunds, reduce insurance premiums and lower operational expenses

The cost of doing business continues to increase, causing many companies to decrease their investments in equipment.

But there’s no need to sweat assets when fleets are properly managed.

Vehicle fleet management solutions haven’t always been considered essential, but more and more companies are under immense pressure to achieve more with fewer resources, and their predicament’s only been exacerbated by the coronavirus pandemic, making comprehensive fleet management and digitization business-critical objectives.

Here are four ways telematics and fleet management solutions help cut costs:

Estimate accurately

Soaring fuel and labor costs, and tighter profit margins are a few challenges companies face when estimating and bidding jobs. In addition, bids often are based on out-of-date information, since material costs fluctuate rapidly. Telematics systems can help estimate costs more precisely and efficiently. Analyzing fuel usage and machine hours from telematics data, combined with labor costs, can provide an advantage when it comes to submitting more competitive bids.

Telematics systems allow fleet managers to better understand how a single truck is performing and whether it is being utilized to its full extent or if it needs preventative maintenance. Ensuring jobs have optimal utilization helps to more accurately bid similar jobs in the future.

Fuel and materials costs are constantly changing, oftentimes bleeding money from businesses at the end of a job because they’re unable to accurately estimate costs during bidding. Errors in calculations result in those companies making up the difference in cost, shrinking or even completely forfeiting their profits. Telematics solutions deliver a clear view into cost management to control pricing and make sure profits aren’t lost.

Tracking expenses in real time enables managers to understand the amount of cost utilized daily or weekly—including the amount of fuel and materials used and what they cost—for future profit projections and bid estimating.

Accurate, real-time insights with telematics help deliver up-to-the-minute information into changing costs. Tracking this information in real time also eliminates paperwork and saves managers from relying on inaccurate quotes based on outdated information.

Analyzing data from previous projects with telematics systems improves the bidding process with more accurate estimates, leading to more competitive bids, and more money left over after the job is complete. The more telematics systems are used to track data from previous and current projects, the more refined bids will become as they improve quoting, leading to profitable outcomes.

Maximize refunds

Every year, just before April, when tax season is in full swing, taxpayers try to pull every available deduction and refund. Similarly, construction materials fleets must dig through multiple reports if they want to maximize claims in fuel tax refunds.

Fleets can use the information from telematics systems to develop more accurate fuel tax recovery recordkeeping and reporting integrity, which can provide the documentation required to file for state fuel tax reimbursements. A telematics system helps in gathering the necessary information and data required for rock-solid refund applications.

Having all necessary reports in one location also can streamline the complexities of applying for tax refunds for operations that service customers in more than one state.

The International Fuel Tax Agreement (IFTA) requires drivers to record when crossing state lines, and while this agreement was meant to relieve trucking companies of paperwork, it’s become a major cause of confusion. To stay compliant, the agreement requires owners and operators to file a quarterly fuel tax report, listing miles traveled and gallons of fuel purchased within each participating jurisdiction.

The report must include the vehicle mileage record, distance records, fuel records and tax-paid retail fuel purchase receipts, along with all relevant data such as gap miles and fuel receipts. It’s no easy task and errors can result in hefty fines, which is why many companies allocate time and resources to compliance.

Traditionally, construction materials fleets have relied on manual recordkeeping for compliance, up until the ELD mandate required fleets to automate their hours-of-service (HOS) recording. Now, more companies are voluntarily adopting new technology that automates fuel tax reporting. However, if the solution doesn’t integrate with a telematics system, fleet operators still must manually dig through files and create reports.

Telematics systems make a huge difference for construction materials fleets by optimizing multiple functions like routing, maintenance and dispatch. In terms of how telematics can help with IFTA compliance, the benefits lie in the reporting ability of the devices. Telematics solutions offer more consistency and efficiency when tracking and reporting fleet movement and provide more accurate trip records. This means a lower risk of audits and compliance violations, not to mention the time it saves—time that can be returned to drivers, helping improve their satisfaction on the job.

Truck-tracking technologies can provide significant operational efficiencies. Features include GPS tracking, routing, geofences and alerts for unplanned delays and other trigger events, electronic timesheets, in-cab driver training, and driver, engine and vehicle performance monitoring. Reports and analysis include fuel usage, driver performance, vehicle health, causes of non-productive time and HOS.

Any number of discrepancies could trigger a penalty when it comes to IFTA compliance, including odometer issues, not recording personal miles, inaccurate information, filing late and not filing at all. Data collected by telematics systems help simplify IFTA reporting because it aids in identifying miles driven in each state by vehicle, along with the total cost of fuel and amount of fuel used. When it’s time to send in quarterly reports or apply for tax refunds, all the necessary information is a click away, rather than strewn across the back office.

Reduce premiums

Vehicle insurance is a big part of a fleets daily operating expense, and the cost is skyrocketing, eating up a growing percentage of a fleet’s annual revenue. The American Transportation Research Institute found that insurance premiums increased by 12% to 8.4 cents per mile in 2018 alone.

However, companies that can control driver performance and reduce risk lower their chances of having to shell out for vehicle replacement, unnecessary repairs, accidents and higher insurance premiums. And today, some insurance companies provide discounts for companies with fleet telematics solutions installed.

Driver behavior, previous accidents and violations all are factors in determining an insurance premium for each driver. Vehicle fleets that can identify unsafe driving through a telematics system and implement measures to mitigate those actions can lower insurance premiums, while also keeping their drivers, and everyone around them, safer.

As fleet safety improves and claims are reduced, insurers take note of the safety programs the fleet has implemented. This ultimately leads to either a maintained insurance rate (in a market of skyrocketing rates), a smaller increase than other fleets are experiencing, or even a rate reduction.

Decrease expenses

Whether company-owned or outsourced, large or small, every fleet can use help controlling costs. That’s why more and more fleet managers turn to telematics as an effective solution for managing their fleets with limited budgets. When properly implemented, GPS vehicle tracking systems can generate positive results in many areas, including employee productivity, driver safety, and in the ability to lower operational expenses.

Telematics can help reduce fuel burn and expenses through their ability to shorten vehicle routes and decrease engine idling time. Telematics also can identify driver behaviors that consume excess fuel.

When telematics systems are implemented, fleet managers gain new visibility into outstanding or hidden maintenance issues that could threaten the safety of the driver and the health of the vehicle. Telematics systems can provide information about fault codes, helping prevent small issues from becoming big repair problems. The system also can keep maintenance on schedule, track idle time and monitor operator performance.

Drivers who know they’re being monitored by a fleet management and telematics system are less likely to make unnecessary detours or personal stops. They may avoid spending unnecessary time at jobsites and/or avoid idling the engine while filling out paperwork in the vehicle. GPS tracking devices aren’t necessarily used to discover what a driver is doing wrong, but what they are doing right. The information provides more clarity with tasks and results, allows drivers to take ownership of their jobs and self-correct without micromanagement.

Telematics helps improve driver safety by monitoring the location and speed of every vehicle. The technology also provides near real-time alerts when speeding incidents occur or other risky driving behaviors like hard braking and fast acceleration. Ensuring safe driving promotes savings on numerous operational costs.

GPS and telematics systems provide the opportunity to optimize each route to shorten travel times and lower fuel consumption. The GPS delivers an automatic transmission of route information, enabling wireless dispatching of real-time route status and feedback, as well as providing an optional turn-by-turn direction module that can further increase driver productivity.

Karli Langner has been with Command Alkon, which provides a supplier collaboration platform for heavy work, for three years. She currently serves as the content specialist for the company’s corporate marketing team. Command Alkon is headquartered in Birmingham AL and has offices in locations around the world. For more information, visit
About the Author

Karli Langner | Content specialist

Karli Langner has been with Command Alkon, which provides a supplier collaboration platform for heavy work, for three years. She currently serves as the content specialist for the company’s corporate marketing team. Command Alkon is headquartered in Birmingham AL and has offices in locations around the world. For more information, visit