Up Your ROIQ: How Smart Fleet Managers Cut Costs With GPS Tracking
No matter your fleet size, return on investment is maximized with GPS
Whether you manage a large-scale shipping company, a mid-sized limousine business, or a small delivery company with only a few vehicles, the return on investment you can reap from GPS fleet tracking not only makes fiscal sense, but business sense as well. From saving money on fuel to increased customer satisfaction, GPS tracking offers numerous net benefits that pay for themselves over time.
If you're analyzing the ROI of GPS tracking for your fleet, the first consideration you have to make is the I: the investment. As with any technological solution, there is a sliding scale of need and want when it comes to GPS trackers. A long-haul trucking company with dozens of vehicles would want more sophisticated devices capable of reading engine diagnostics, offering fast reporting, and providing detailed, historical reports. A smaller delivery company may just want to keep tabs on where their drivers are to help with logistics. While feature-heavy trackers cost more in hardware, the way technology has advanced in recent years has brought device prices down drastically. These days, the difference between a high-end hardwired tracker and a small battery-powered device can be as little as $50.
Speaking of hardwired trackers, another investment to entry is installation. More robust trackers can be installed directly into a vehicle's power source, allowing them to read engine diagnostics and, more importantly, to run off the vehicle's power. This feature is especially beneficial for long-haul drivers who don't have time enough off the road to charge a battery powered tracker. Installation costs for these devices is surprisingly low: any stereo installer can do it for less than $100. The more tech-savvy can even install the devices themselves.
Once the device is purchased and installed, the cost of operation entirely depends on the size of the operation. Any GPS tracking provider worth its salt will offer scalable pricing packages that can cost less than $20 per month per tracker. With this cost you're getting the cellular connection to keep the device on the map, and access to a GPS platform which provides you with all of your vehicle information.
Investing in GPS can seem daunting, but when weighed against the return, it should be a no-brainer for any fleet manager.
Save on Fuel
It's no secret that delivery and service vehicles use a lot of fuel. A commercial truck can go through more than 20,000 gallons annually. At $2.50 a gallon, that can total more than $50,000 over the course of a year. Even a small, continuous reduction of that cost can add up to thousands of dollars.
GPS trackers can help a fleet manager monitor miles per gallon and fuel consumption figures, as well as vehicle idle times, all of which help identify inefficient drivers. By controlling fuel usage and training at-risk drivers, managers can see big returns. GPS trackers can also provide emissions reports, which help identify vehicles in need of service before they go in for testing. Pinpointing and rectifying these problems not only helps conserve energy, but a cleaner fleet also benefits the environment.
Idle time alerts can be used to alert a driver and a manager whenever a vehicle had remained running but motionless for a certain period of time. By pinging a driver and alerting them to shut the vehicle off during these extended idle times, one large equipment rental company managed to save more than $100,000 and 28,000 gallons of fuel in a single month. According to Ford Motor Company, every hour of idle time is equivalent to 25 miles of driving; using GPS vehicle tracking is a great way to promote smart fuel usage.
In addition, speed alerts not only help a manager monitor drivers that are driving recklessly, but it also helps them control money spent on fuel. Speeding can lower gas mileage by a third on the highway and 5% in the city. These numbers can add up to around $.24 per gallon wasted for every 5 miles driven over 60 mph, according to the US Department of Energy. Cutting down on speeding drivers makes sense from both a safety and an economic perspective.
Determine Proper Vehicle Use and Driver Abuse
Conserving fuel helps cut costs on how drivers drive, but GPS also helps the bottom line by keeping a fleet manager informed on where they drive. A GPS tracking system gives managers critical data for ensuring ongoing driver productivity. Real-time GPS trackers give managers up-to-the-minute location data, as well as a historical record of everywhere the vehicle was. These historical records provide concrete location information in the event of a billing or service question. If a driver claims he drove 250 miles in a day according to the GPS, but he's claiming 500, the GPS tracker eliminates that doubt. These billing discrepancies can also extend to hours claimed. By using GPS tracking it can be easily determined when a driver actually began his day as opposed to when he began billing.
Also, by examining off-hours and weekend use reports a manager can assess whether a driver is frivolously using a company vehicle for side jobs or personal reasons. All of this information is just a few clicks away within a GPS platform.
Dispatch Nearby Drivers
So far we've only seen the fiscal benefits of GPS fleet tracking, but in actuality it's much more than that. By always knowing where your drivers are, it makes it much easier to provide the best customer service possible. Oftentimes drivers on the road appear to exist in a world of their own, out of touch with each other. While that entrepreneurial attitude can be good for individual business, it can hurt a company overall. Say two car service drivers are on the road and hear a call over the wire for a pick-up. The closest driver gets there first and gets the fare, with the second driver arriving shortly thereafter. Now, with GPS tracking, a smart dispatcher can see that one driver is closer and reach out to him directly. Not only will the company have saved on the miles driven by the second driver, but the customer is always guaranteed to get the fastest service.
Ensure Vehicle Safety
So far we've looked at the ROI of GPS tracking has on the how and where a vehicle is going. The final component to GPS tracking is the vehicle itself. By tracking a vehicle using GPS, not only are you ensured of its recovery in the event of theft, but through detailed driver reports and schedules managed through the GPS platform, you're always going to know who was behind the wheel and when. This added knowledge on your vehicles has also proven valuable to insurance companies; many providers will offer discounted premiums to companies with GPS trackers installed in their vehicles.
Now that we've learned the who, where, when, and hows of the ROIs on GPS tracking, the only question that remains is, what are you waiting for?