Business Technology

How am I driving? Bad fleet management could be costing SMEs millions

7 min read

26 February 2015

Small and medium-sized businesses could be losing millions of pounds a year because of ineffective management of their fleets of lorries and delivery vans.

Van drivers might be speeding at they struggle to meet delivery targets, leaving the engine running unnecessarily or even using a mobile phone while at the wheel.

Travelling on a motorway at 80-85mph, rather than 70mph, can increase fuel consumption by 25 per cent or more, says the AA, while according to the Department of Transport, work related crashes can cost a company between £16,000 and £154,000 – rising to more than a million if a fatality occurs.

One hour of idle time is the equivalent to 3.7 litres of fuel and, with the national average price of fuel now reaching £1.38 per litre, a company running a fleet of ten vehicles could be wasting about £935 a month in fuel just due to idling alone.

Costs aside, the negative effect on the image of a company when its branded vehicles are badly driven can be serious, especially for small businesses that normally work within a particular location. As well as reducing fuel and vehicle maintenance costs, better driving can also cut insurance premiums.

Larger companies with logistics departments and bigger budgets have found ways to manage their fleets more effectively but now technology could do something similar for small businesses. Telematics is a technology that has been developing rapidly over the last few years and is now more reliable and more affordable than ever before. Essentially it involves putting a small box in your vehicles so that you can you can keep track of them at all times through a web interface portal, with up to the minute information.

According to research organisation the International Data Corporation, the markets for fleet and workforce management products are “underpenetrated”, especially in the case of SMEs. But this situation is changing rapidly as smaller businesses start to recognise the benefits that this technology can bring. Volkswagen van centres are to offer fleet customers a new telematics service for £12.50 per month per vehicle as part of a new service for fleets this year, it was announced earlier this month. Kevin Rendell, Volkswagen Commercial Vehicles UK head of service and parts added that the company wants to focus on SMEs.

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The RAC is among a growing number of organisations that offers a particular version of telematics that is tailored to meet the needs of SMEs. It allows these businesses to track their vehicles position 24/7, to view live traffic feeds showing delays and accidents so that they can alert customers more accurately about arrival times and to check the most likely time at a location so that they can calculate the costs of a job correctly. Reducing accidents and making for greener driving are also easier goals to achieve through telematics, says the RAC.

Skoda Fabia has just launched a telematics device called SmartGate, which allows a car to communicate with a smartphone via Bluetooth to provide information about average fuel economy and average speeds – both useful for monitoring costs.

Teesdale Renewables, a fast-growing provider of renewable energy services to homes and businesses in the North East of England, employed a telematics provides called Fleetmatics to help reduce its fleet costs. Fleetmatics REVEAL™ has now been installed throughout the company’s fleet of six vehicles to ensure that the location of engineers can be pinpointed in real-time via what’s known as a Live Map.

This has helped with efficient scheduling of customer visits and faster response times when emergency call-outs are received. Kevin Maughan, media and marketing manager at Teesdale Renewables, said: “We use the Live Map feature all the time. It’s invaluable to us. In cases where there’s an emergency, we know immediately which engineer is nearest and send him or her to the job.”

“This means they get to the customer much faster than they would if we were still having to manually check the location of each engineer,” he explained. “In addition, the system helps the engineer takes the fastest route to a job, which not only improves our service but saves fuel and time. As a company, we are dedicated to energy efficiency so it’s important we adhere to these principles in the way we operate.”

Teesdale Renewables, based in Barnard Castle, County Durham, specialises in biomass fuel installations but also offers conventional heating, plumbing and electrical services. The company has been using the Fleetmatics system since September, when the decision was made to invest in a fleet management solution for a number of reasons. One of these was security, with the management keen to ensure staff were not using their vehicles after designated working hours. Additionally, there was a desire to improve route optimisation and emergency response times.

“The engineers have embraced the technology very well,” said Maughan. “It’s fair to expect a little resistance to this change in working practices but we were pleasantly surprised by how well it has been taken on board by the staff.”

One unexpected benefit of the system arose when it helped to resolve a dispute over driver behaviour. The company received a call complaining that one of its drivers had been driving excessively quickly when overtaking an elderly driver, but on closer inspection of the vehicle data, the company was able to demonstrate that its driver hadn’t exceeded the speed limit after all. In fact, it was the unusually low speed of the other vehicle that gave the incorrect impression that the van was travelling very fast.