How Does Fleet Management Work?

prepaid fuel cards

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Fleet management incorporates many different functions, such as telematics, vehicle maintenance and finance, GPS tracking systems, vehicle diagnostics, fuel management and management of the fleet drivers. It is these functions that allow for fleet orientated companies to:

  • Enable company owners to know the exact whereabouts and every movement of their fleet, without having to be physically present and at the same time stops illicit use of the vehicles.
  • Ensure that a company has a reliable, efficient and cost effective transport system which meets business operations.
  • Ensure that the company is complying with government rules and regulations.
  • Prolong the life of fleet vehicles
  • Improve fleet productivity whilst also reducing costs and increasing profits.
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How Does it Work?

Diagram Showing How Fleet Management Works

GPS (Global Positioning System) is a satellite based radio navigation system. The system was developed in the early 1970s by the US Department of Defense. Basically, it uses 24 orbiting satellites to send data back to receivers via radio signals to pinpoint the exact location and movements of the required object.

The fleet vehicles will have the GPS receiver installed in the dashboard, usually in the form of a GPS locator beacon. All fleet management systems will have either a GPS or GLONASS (Global Networking Satellite System).

The fleet manager is then able to track and study the vehicles in the fleet, at any time of the day or night, either by installing fleet management software onto a computer or by going online.

Did You Know?

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If you’d like to learn more about the ELD Mandate, check out our guide to US vehicle tracking laws.

How The GPS Information Is Used

The GPS information picked up by each tracking device can be dealt with in one of two ways. For active trackers it is instantly relayed through the mobile phone network to the tracker system which provides a live picture of where the vehicle is located.

With passive trackers the journey information is recorded on the tracker itself and can be downloaded at a later date, usually when the vehicle returns to base.

Trackers can show the direction and speed a vehicle is travelling in as well as its location.

What Can Hinder GPS Signals?

In the past, it was often the case that GPS did not work effectively in built up or remote areas due to the lack of signal. However, this issue has now been resolved due to advances in GPS technology and the number of GPS satellites which have been sent into orbit in the past few years.

In addition, GPS does not function effectively if a vehicle is underground or in a tunnel. However, there are systems, the most common known as radio frequency identification, that have been developed to combat this type of signal loss and maintain tracking in such circumstances.

GPS trackers’ efficiency hinges on how well they’re installed. This means that some people may want to opt for a professional installation, but usually these devices are intuitive and user-friendly enough that they can be installed by the user.

Benefits of Fleet Management Systems:

Fuel Management

One of the core services provided by any fleet management service provider and the biggest opportunity for cost saving is that of fuel management.

With the ability to manage fuel costs and plan efficient routes more effectively as well as manage driver behavior, fleet management systems provide huge cost saving benefits in terms of fuel economy. Additionally, many fleet management providers offer a wide range of fuel cards. Fuel cards are a form of payment card, designed solely for the purchase of fuel.

A distinction can be made between fuel cards offering pump price purchases (in which the customer pays for fuel at the price displayed at that specific forecourt), or bunker price purchases (in which the fuel card provider sets a generic price for all fuel purchase, regardless of where the purchase is made).

Bunker Price Fuel Cards

Bunker price fuel cards typically offer customers greater discounts on their fuel purchases, with potential savings of several dollars per gallon possible.

Fleet management providers also grant employers a range of other services related to fuel management. With fuel management reports, for example, employers can track every fuel purchase made by specific drivers simply by checking online.

This enables employers to quickly spot unauthorized purchases and take appropriate action, for instance setting maximum thresholds on fuel purchases for each driver in their fleet.

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Vehicle Maintenance

Many fleet management service providers also offer customers specialized vehicle maintenance services for their fleet.

These services vary from provider to provider, but may provide customers access to such services as: 24 hour mobile repair technicians, routine vehicle maintenance checks and access to a nationwide network of maintenance and repair centers. Regular vehicle maintenance checks can often prove quite an expense for companies operating a large fleet of vehicles, however fleet management services can help reduce these costs.

Some service providers may also include free maintenance as part of their fleet management services, but it is more common for providers to include it for a small additional monthly fee.

Fleet Security

Without a doubt, this is one of the most important aspects of fleet operated businesses. Driver and public safety is of course paramount, and anyone running a fleet of vehicles has to make this their prime concern.

As an additional security feature, some fleet management services offer customers access to vehicular control mechanisms. These mechanisms can prove to be extremely beneficial in retrieving stolen vehicles. In particular, security systems located within the vehicle can enable employers to track and gradually reduce the speed of, and ultimately stop, a vehicle within their fleet remotely. This security feature is particularly useful for companies operating large fleets of vehicles where stolen assets can created unwanted expenses in the event that they are stolen.

To reap the maximum benefits from fleet security systems, it is essential that both fleet managers and drivers have a good working knowledge of the tracking software.

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Next Steps

Now you know how the technology works, it’s time to learn how to use it. A great place to start is our examination of little-known fleet management techniques of the world’s elite private fleets.

Written by:
Julia Watts author headshot photo
Specialising in business software, Julia writes jargon-busting guides about VoIP, fleet management, dash cams, fuel cards, and more. Having spent almost a decade writing for entrepreneurs and reviewing business solutions, she loves helping exciting ventures – big or small – to flourish.