What is a Fleet Management system?
Here, you'll learn what Fleet Management is, what a Fleet Management system is, why you might need one, how the future of Fleet Management looks, and how the system works.
What is Fleet Management?
Fleet Management is all about managing and overseeing a fleet of vehicles. This is typically done with a Fleet Management System (FMS), which tracks and analyses the vehicles.
Fleet Management helps companies streamline transportation, reduce costs, and improve safety. With technological advancements and increasing electrification, Fleet Management is expected to become even more efficient and sustainable.
Millions of vehicles are tracked worldwide, and Fleet Management is a well-established approach for those managing vehicles as part of their job.
Historically, the term Fleet Management referred to tracking a fleet of ships or aircraft, but as technology has become more affordable, today's fleets are almost always vehicle fleets.
It is common for various types of work vehicles, tools, and equipment that need to be tracked to be included in the management of the vehicle fleet and within the Fleet Management system.
What is a Fleet Management system?
A Fleet Management System is a software that helps you manage risks, costs, and factors affecting your company's fleet by transferring data from tracking devices to the Fleet Management system, where the data is visualised. For this to work, hardware is required in the vehicles being tracked.
This might bring to mind simpler tracking devices, but these are not connected to a Fleet Management system and will not provide you with what you need.
For a user with a larger number of vehicles, more opportunities arise in terms of data usage, as there is more data available. In such cases, user-friendliness becomes more important, and the need for decision support and reporting increases.
Both private companies and the public sector use Fleet Management systems, and it is typically relevant for those who have more than five vehicles that need to be monitored.
Why Fleet Management and Fleet Management systems?
Fleet Management through a Fleet Management System is fundamentally about ensuring that jobs and transportation are carried out on time and within budget.
Fleet Management as a function enables companies that rely on transportation to reduce the risks associated with vehicle investments, transportation, and personnel costs, and to improve efficiency and productivity.
In the short term: You can reduce manual handling and see where drivers are in real-time on a map. This allows you to respond quickly to events in the field and to better manage and control day-to-day operations.
In the long term: You want to be able to collect data from all vehicles to do your job effectively. This might involve reviewing driver logs, tracking mileage, monitoring drivers, optimising routes, analysing driving behaviour, and receiving automated reports on fuel consumption, idling, invoicing data, warnings, or improving procedures.
What you might not consider: It might also involve a specific need for you. Perhaps you want to review how you can reduce the fleet size or identify which drivers are most productive. The system can then help you become more efficient.
Examples of industries that can benefit from a Fleet Management system:
A Fleet Management System can generally assist all types of industries with mobile services in tracking, analysing and securing vehicles, machinery, and assets, but here are some clear examples:
How does a Fleet Management system work?
Fleet Management systems are telematics systems that retrieve data from vehicles. The system can also be described as an IoT system, but what is meant by the Internet of Things is often broader and transformative or something related to consumer electronics.
The starting point in Fleet Management is the GPS unit (hardware) that is connected to the vehicles. The GPS unit transfers data to the Fleet Management system, which you can access via the web or apps (iOS and Android). The apps are designed for both drivers and Fleet Managers.
Methods of data transfer include both terrestrial transmission and satellite. Tracking can also be based on GLONASS or mobile signal-based location tracking, but these are not nearly as common.
GLONASS is a Soviet/Russian GNSS (Global Navigation Satellite System) and is fundamentally the same as GPS (Global Positioning System). Both were originally intended for military purposes.
Mobile signal-based technology (GSM) is often less accurate than GPS, especially in areas with few mobile masts or where signals are blocked by obstacles, but GSM and Bluetooth can support your Fleet Management system if, for example, you want to track equipment or other vehicles.
Cable Connection or OBD?
The OBD port in a vehicle is designed for diagnostics, allowing you to retrieve driving data from the vehicles in your fleet. However, for a more secure connection, a direct cable connection to the car battery is often recommended.
Both methods have their pros and cons. OBD is more common as it's cheaper for manufacturers and simpler for users to install. The time difference in installation, though, is minimal—just a matter of minutes—and once installed, the solution remains in place until manually disconnected. For car thieves, a cable-connected unit is harder to disconnect, making it a more secure option overall.
Cable installations typically track vehicle usage based on whether the ignition is on, but the tracking unit learns the vehicle’s behaviour over time. The algorithm can then determine if the vehicle is stationary, driving, or idling, providing more accurate data on usage.
What does the future of Fleet Management look like?
With the increase in connected devices, companies can now quickly store and analyse data to make better decisions. IoT is essential for the sustainable management of large fleets as it enables unlimited data sharing between devices.
Modern technology provides real-time alerts, tracking, data analysis, and security updates, increasing operational efficiency and oversight. In the long term, it optimises maintenance and sustainability.
The global market for hardware, software, and services for fleet telematics is expected to be worth $75 billion by 2025.
Autonomous Vehicles
For autonomous vehicles, Fleet Management increases safety and efficiency by ensuring that vehicles are used within strict safety and operational protocols.
Technology enables communication between autonomous vehicles, reducing congestion, improving fuel efficiency, and contributing to better traffic flow and reduced emissions. With 5G, communication capacity improves, leading to faster deliveries and better management.
The environment and electrification
International consultancy and analysis firm McKinsey states that the latest efficiency trends are in fuel consumption and electrification. They primarily consider freight, but all vehicle-intensive industries see opportunities. Electrification is something Fleet Managers at larger companies are considering, and larger companies tend to think of "long-term profit".
According to McKinsey's calculations, the total cost of ownership of a smaller work vehicle (small lorry) is the quickest to recoup (ROI) compared to larger electric vehicles and the equivalent diesel-powered vehicles.