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The logistics industry is heavily dependent upon vehicles to move goods and cargo from one point to another. Companies in this industry must manage their fleet of vehicles to ensure timely delivery of cargo and control financial losses due to downtime and excessive repair costs. Fleet managers are key employees of logistics companies and have a wide range of responsibilities that maximize the efficiency and profitability of the fleet.
Preventive maintenance is the foundation of fleet management. The concept of preventive maintenance is to reduce lost revenue associated with equipment downtime and to reduce emergency repair cost by performing regularly scheduled maintenance services. These services include inspections of vital engine and drive train systems, monitoring and changing fluids per manufacturer recommendations and replacing or repairing components susceptible to regular wear and tear to ensure maximum equipment utilization. The fleet manager's responsibility in preventive maintenance includes scheduling the services and maintaining records related to the preventive maintenance services performed.
Equipment Utilization Management
While preventive maintenance is the foundation to a successful fleet management program, managing the utilization of the fleet measures the effectiveness of the program. Measuring how the assets are utilized provides valuable information to the fleet manager and business managers to help make decisions related to equipment acquisitions and driver performance reviews. The fleet manager is responsible for ensuring that all key equipment metrics are collected, measured and analyzed to see historical trends and identify potential problems that can be corrected.
As equipment utilization rates are dragged down due to old or worn vehicles, replacing these poorly performing assets is an important responsibility of a fleet manager. This individual should have contacts and connections to people in the commercial vehicle industry to help them source reliable assets to add to the fleet. Fleet additions are vital to reduce the number of poorly performing vehicles and add to the number of highly efficient ones to boost equipment utilization and fleet profitability.
Before a new vehicle is purchased or capital expenditure component is replaced, many companies require that the purchase be included in the company's capital expenditure budget. The fleet manager assists the finance team to identify potential assets to be replaced or scheduled for major component replacements during the budget period. This information is then compiled by the finance team and included in the annual operating budget.
- Government Fleet: How to Implement a Fleet Preventive Maintenance Program
- American Public Works Association: Monitoring Fleet Utilization for the Justification of Equipment Needs
- Entrepreneur: How to Buy a Fleet Vehicle for Your Business
- Fleet Financials: 3 Steps to Developing and Controlling a Fleet Budget
A southeastern Ohio native, Justin Johnson is a finance professional with accounting and financial planning experience in various manufacturing industries. He discovered a love for writing as student at Pensacola Christian College and after learning many lessons in the workplace, he enjoys writing business and finance pieces.