Optimizing your fleet: the power of fleet benchmarking
July 17, 2024
If it’s true that knowledge is power, then fleet benchmarking represents one of the most powerful tools available to fleet and business leaders today. Imagine knowing exactly how your fleet performs compared to others in your industry. Are you spending more on fuel? Do your vehicles spend too much time in the shop?
Fleet benchmarking provides a comparative performance report against established peer and industry standards. It helps to pinpoint areas for improvement, boost efficiency, and sharpen your competitive edge. It also provides the required data to justify changes and investments to stakeholders.
In this article, Element Fleet Management’s trusted advisors share their real-world experience in the importance of fleet benchmarking, the key performance indicators (KPIs) to track, and how you can leverage benchmarking data to optimize your fleet operations.
Why benchmark your fleet?
Optimizing performance and efficiency
When you know where your fleet excels, you can capitalize on those areas to drive further success. For instance, if your fleet has lower-than-average maintenance costs, you can investigate what you're doing right and apply those practices across your entire operation.
Additionally, benchmarking helps you set realistic goals. Instead of aiming for abstract improvements, you can set specific, measurable targets based on industry standards. This makes it easier to track progress and stay motivated.
Gaining a competitive edge
In today's competitive market, standing out is essential. Benchmarking allows you to see where you stand relative to your competitors. For example, if you're lagging in a critical area, benchmarking will highlight this and allow you to make necessary adjustments.
“If you want to be a best-in-class fleet, you need industry leading benchmarks and KPIs that you would like to hit,” explains Element Senior Strategic Advisor, Saad Ahmad. “You’ll want to know exactly how you're doing compared to your business peers as well as ones with a similar fleet composition.”
Identifying areas for improvement
With benchmarking, it's easier to identify critical issues costing you time and money. Regularly comparing your performance to industry standards lets you quickly spot problems and address them before they escalate. This proactive approach saves resources and improves overall fleet reliability and customer satisfaction.
Fleet benchmarking KPIs
To get the most out of benchmarking, it's important to track the right KPIs. Here are some of the most critical metrics for fleet management:
- Fuel efficiency: Fuel is one of the largest expenses for any fleet. By monitoring fuel efficiency, you can identify patterns and take steps to reduce consumption. This might involve driver training, route optimization, or investing in idle-reduction technology or more fuel-efficient vehicles.
- Vehicle downtime: Every minute a vehicle is off the road adds to lost revenue that can never be recouped. Tracking downtime helps you understand how often and why your vehicles are in the shop. This information can guide maintenance schedules and help you decide when to retire an older vehicle.
- Maintenance costs: Regular maintenance is essential, but costs can quickly spiral out of control. Benchmarking your maintenance expenses lets you see if you're overspending compared to similar fleets. You can then investigate ways to reduce costs by negotiating better rates with suppliers or improving preventive maintenance practices.
- Driver behavior: Safe and efficient driving is crucial for fleet success. Monitoring driver behavior, such as speeding, idling time, and harsh braking, can help identify training needs and improve overall safety. Better driving habits reduce wear and tear on vehicles and enhance fuel efficiency.
- Accident rates: Accidents can be costly in terms of repairs, legal fees, and downtime. Benchmarking accident rates helps you understand if your fleet has a higher-than-average incidence of accidents. This was the case with a delivery service that noticed that their accident rates were higher than similar fleets. An Element review of their safety protocols and the subsequent enhanced driver training resulted in a 25% decrease in accidents over the next year.
- Route optimization: Effective route planning can save time, reduce fuel consumption, and improve customer satisfaction. By comparing your routing efficiency to industry standards, you can identify opportunities to streamline operations. This might involve using advanced routing software or re-evaluating delivery schedules.
Collecting data for benchmarking
Fleet and business leaders looking to reap the benefits of benchmarking can start by accessing data such as fuel logs, maintenance records, driver reports, and accident logs. Assuming the information is accurate and up to date, this will form the basis of their benchmarking analysis.
However, the recommended course of action is to leverage the expertise of a fleet management company (FMC). An FMC can identify anomalies and outliers that may skew the data.
“Our job is to provide both the robust benchmarking data and the industry context to help fleet managers make informed decisions,” Ahmad said. “We have many different models across thousands of clients, so we have millions of data points to show the client the full picture of where they stand.”
Another important aspect of leveraging an FMC's expertise is that fleet benchmarking is not a one-size-fits-all proposition. Not only is there diversity between industries, but even within an industry, clients can have widely varied priorities.
“It's important to let the fleet leaders guide the discussion because, as an FMC partner, our top priority is ensuring their goals are met," Ahmad said. "If their primary focus is reducing costs, then I'm going to be looking at ways to improve fuel economy, reduce maintenance costs, evaluate their lease structure, essentially any way to reduce their spend while still maintaining their business productivity.”
Begin your organization’s fleet benchmarking journey
Fleet benchmarking is a powerful tool that can transform your operations. By comparing your performance against industry standards, you can identify areas for improvement, set realistic goals, and make informed decisions. This proactive approach not only boosts efficiency and reduces costs but also gives you a competitive edge in the market.
If your organization can benefit from the power of fleet benchmarking, contact Element Fleet Management’s team of trusted advisors today to take the first steps of what is sure to be a transformative journey.
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