Finding fleet savings in the stars
How companies can put $12 billion worth of space-age technology to work for them
Imagine sitting in the cab with each and every one of your drivers as they make their rounds, every single day. Using a GPS vehicle tracking system, now you literally can.
GPS is already proving itself to be the next business revolutionizing technology, just like mobile phones were in the 1990s or computers in the 1980s. For the fleet owner the question is no longer whether or not a GPS tracking system is needed, but rather how to select the right one? This article will help answer that question by exploring what GPS is, how vehicle tracking works, the benefits of GPS, and how to evaluate and budget for your GPS tracking system.
How vehicle tracking works
Vehicle tracking involves three basic parts: A transponder unit mounted on the asset to collect data; a communication medium to transmit the data; and a user interface where the manager views the data, normally an Internet software package.
The transponder unit is typically about the size of a large ashtray and houses the GPS receiver and wireless radio. Wireless networks, the same used by mobile phones, provide communication between the transponder on the machine and the manager at the computer. The unit literally “calls” information such as: location, on/off status, usage data, and critical updates pertaining to machine health and unauthorized use directly from the asset to the software, cell phones, PDAs and email in real time. Additionally, the manager may “call” the unit from the software and request an update of this data, or other functions such as remote disabling of the asset, anytime with a click of the computer mouse. It is almost as if the machine has its own cell phone, from which it can call you and vice versa.
In the driver’s seat
The biggest benefits of a GPS tracking system are improved dispatching, increased driver accountability with increased productivity and decreased vehicle maintenance costs.
Improved dispatching is the direct result of knowing where your vehicles are at all times. Being able to reroute drivers to the closest destination in real time significantly cuts down on backtracking and the associated costs of wasted driver time and excess mileage. If a driver should get lost, then having their exact location on a map makes it easy to guide them to their destination with a mere phone call. Further gains are realized by the contractor who also tracks construction equipment with GPS, since the lowboys, service trucks and off road assets will all appear on the same map in real time. Consider the savings of a South Carolina contractor with over 200 “take home” trucks on the road. By evaluating the morning drive time and jobsite locations they were able to redeploy crews to more local jobs, rather than having them drive past multiple jobsites en route to their final destination. The net result was an average reduction of 35 minutes of drive time per truck per day in the entire fleet.
The fastest return on a vehicle tracking investment usually comes from the increased productivity and accountability of the drivers. In today’s challenging economic climate, it is more important than ever for contractors to closely monitor their operations and determine how they can improve their cash flow – which can often be the difference between business success and failure. Unauthorized stops, moonlighting, off route detours and “long lunch breaks” are easily identified and often disappear altogether once employees are told that the vehicle system is tracking them. Gains are seen in reduced mileage driven, thus burning less fuel, and more productive workdays, often decreasing the overtime that was previously used to make up those lost work hours. Since the tracking system clearly identifies when and where the vehicle started and stopped every day, time card “fudging” is quickly eliminated.
Consider the case of a New York contractor who quickly found that his drivers would turn on their trucks every morning, clock in and then head into the office and drink coffee. Once GPS was implemented, he shaved 30 minutes of inappropriate time card padding as well as the half hour of unnecessary fuel burning while the trucks idled.
The adage “you can’t manage what you don’t measure” rings true when it comes to vehicle tracking. Some systems will count loads or dumps on the trucks, along with the time and location of the drop. The manager will not only compare productivity between drivers, but also ensure there are no unauthorized dumps.
State/province mileage calculating for IFTA reports is a tedious process: collecting driver logs, inputting the miles into a computer, determining the per territory total, etc. Your vehicle tracking system should do this with just a click of the mouse from the software, neatly totalling the mileage per state/province per truck for you in an Excel exportable format. This reduces the hours of clerical work and potential for human error to just ninety seconds of automated calculations.
Reducing liability, fuel and service costs
One of the biggest liability exposures a contractor has is the after hours or weekend use of their trucks, particularly if they go home with the drivers. For this reason, a curfew may be established by the manager whereby the unit will flag after hours use and even call an infinite number of cell phones to report the abuse in real time. The system can even disable the trucks from being started at that time, with the disable override only available to the manager via the remote software.
Consider the situation of a contractor in Maryland who had a driver finish off the week at his favourite watering hole. The truck’s curfew kicked in and disabled the starter at 9 pm, so when the driver stumbled out of the bar well after midnight he was forced to take a cab home instead of driving while intoxicated. As it turns out, the driver was so overserved that the following day he could not recall where the truck was parked, and the contractor was saved from a DUI accident.
The biggest costs of any fleet are fuel and maintenance, both of which are impacted significantly by vehicle speed and idle time. Speeding burns fuel at an accelerated rate and puts additional wear on the engine, tires and other major components. An excessively speeding truck is also a high accident risk, as well as bad branding for the company. An idling truck burns a minimum of one gallon of fuel per hour and imparts similar wear and tear on the vehicle as driving over 80 miles an hour. With a tracking system, the costs of speeding and idling are identified and brought under control. The manger specifies the speed not to exceed and a notification (email, text message, etc.) is sent every time that threshold is broken as well as displayed in a report. Additionally, most transponder units track the hours and/or miles since maintenance and report a real time notification when the asset is due for service as well as provide proactive scheduling reports. With this information the under- and over-servicing of trucks, and the unnecessary cost it carries, becomes a thing of the past.
How to budget for and evaluate tracking systems
A quick Internet search for “GPS tracking” or “vehicle tracking system” turns up dozens of results, so how do you select the right one for you? Here are some important factors to consider:
• Cost. The transponder unit will run between $400-$1,000 USD and quantity discounts are often available. The monthly communication should be between $20-$50 per unit per month. Some manufacturers will levy an activation fee, annual maintenance fee, multiple user fee and/or software license fee so be sure to ask about these at the start.
• Long-term contract. Most providers require an airtime contract extending from anywhere between one to five years, similar to a mobile phone agreement. There are a few “no contract” manufacturers who bill month to month, giving you the option to stop service at any time.
• Provider background and support. Make sure you have done due diligence on the manufacturer and dealer for your selected system. Now more than ever, make sure your provider has been in this business for years and has the capacity to support you through the product’s life. Is the product and company proven or are you one of the initial guinea pigs? Are you buying from the OEM, dealer, reseller or another channel? Always be sure to identify where technical support and/or training will come from, and if there is an additional charge for those functions.
• Desktop vs. Internet-based software. Internet software gives you “anywhere, anytime” access while the desktop version works only where you have installed the software.
• Wireless coverage. Wireless technology is much more pervasive than it was just five years ago, but it still isn’t everywhere. Be sure to ask your prospective provider for a coverage map to ensure they have connectivity in your areas of operation.
• Fleet coverage: Even if you don’t plan to track both your trucks and equipment initially, does the provider offer an integrated system for both? You may start with your trucks and find equipment tracking to be a logical next step. Will the same vendor provide both systems or will you be using one vendor for equipment tracking and another for truck tracking?
The savings generated by a vehicle tracking system are undeniable, often paying for itself in under six months and delivering a return many times over the initial investment. So whether you implement vehicle tracking for the ROI or the peace of mind, you can rest assured knowing that you will never be out of touch with your fleet, wherever they go.
Tony Nicoletti is the Director of North American Sales for DPL America.