Customer expectations, the driver shortage and compliance are all having a big impact on how fleet management systems are designed and why they are implemented. Alexandra Leonards takes an in depth look at how the market is changing.
Road transport is heading into a challenging phase, forcing operators to seek out different ways of managing their fleets.
“Fleet management systems have been used for many years – and always to improve service, reduce costs and achieve more with the same resources,” says Andrew Tavener of Descartes Systems UK.
“Against today’s backdrop of driver shortages (which could become more acute as a result of Brexit), rising costs, increasingly intense competition, congestion, the growth of online shopping and home delivery, and complex rules and regulations, what has changed in recent years are the main reasons for adopting fleet management systems.”
According to him, adoption is now driven by a pressing need to improve service offerings in a number of key areas, including logistics and enhancing road safety through proactive compliance; all the while ensuring security is not compromised and that fleets are achieving even greater levels of transport efficiency and productivity. “This requires a new approach in how organisations think about managing their fleet and its movements,” he adds.
Expectations from customers are a key driver in this push for better services and fleet management systems.
“Today, there is an expectation that the truck is an extension of the office, with the same full suite of IT solutions available to the driver of the truck as is available to the those in the office,” says Richard Litchfield, IT director at Europa Worldwide. “This shift is a result of the modern day customer’s expectation for detailed, granular and real time information about when their delivery will arrive.”
For William Salter, managing director of Paragon Software Systems, the most prevalent fleet management priority for logistics operators has always been cost pressures. But he agrees that there are now new pressures striking the market from different angles. “What has changed is the scale of the operational challenges faced by the sector in terms of customer expectations, congestion, compliance and driver shortages,” says Salter. “As a result, routing and scheduling has had to evolve to meet these increasingly complex demands with greater levels of accuracy and the ability to integrate with a growing number of systems to provide added visibility and control.”
He identifies resource managed planning and way point mapping as key ways to increase accuracy of transport plans, while predicting increasingly precise arrival times and making schedules as achievable as possible. “Vehicle tracking integration meanwhile enables logistics operators to monitor actual versus planned performance in real-time to respond to any issues and target continuous improvement using historical reporting,” he says.
According to Sidharth Sreekumar, product innovation manager at The Smart Cube, the fleet management technology space is at a crossroads at the moment, offering multiple paths to the market. “This is due to the combined impact of multiple market forces acting on the overall fleet industry,” says Sreekumar. “The first is the increasing availability of tracking and reporting tools such as telematics and fuel cards.
“The second and more powerful force is the strategic shift happening within organisations wherein fleet is no longer viewed as just another indirect sourcing category detached from the company’s central expense, but instead as a key procurement area.”
These two forces combined are splitting the requirement for new technology into two parts, which are operations, and strategy and procurement.
“While the underlying data for both these segments might be similar, the final objectives and requirements are quite different, thereby necessitating focused tools to aid each segment,” adds Sreekumar.
Customer demand is also a significant factor in the changing face of fleet management technology. “All customers today demand choice and want services delivered on their terms. In logistics, this increasingly comes down to customers choosing how, when and where they want their services delivered,” says Tavener. “Fleet management systems today need to be able to present these choices to customers at the point of purchase in a manner where their true costs and profitability are known by the provider before they are offered or committed.
“This concept of profitable customer choices is critical to driving up the productivity levels of ‘Fleet UK’ as we approach Brexit.”
Big issues that are inherent to the road transport market are also influencing fleet management technologies. “With the UK recently named the most congested country in Europe, traffic is one of the biggest challenges being faced in the market,” says Tavener. “But time wasted in traffic jams is not the only outcome of congestion, with rising concerns around air quality raising the threat of higher emissions charges.
“Increased security around major cities, airports and out of town shopping centres is also adding a significant logistical demand, which in turn is causing problems and delays that leave vehicles idling, further raising emissions.”
With this in mind, for transport operators already struggling to cope with the driver shortage and increases in fuel costs, they can risk losing what Tavener describes as “already thin profit margins.”
“Forcing the productivity of ‘Fleet UK’ to new higher levels is critical. It can only be achieved through higher service per hour/mile rates, utilisation of roads in uncongested times and eliminating unnecessary idle time and queuing at facilities by planning appointment times to manage flow,” he adds. “This requires the transport community to coordinate, cooperate, communicate and automate.”
He says that the best fleet management systems radically increase the level of automated decision-making within transport departments. “This is necessary, not only to reduce manual effort, but to accelerate decision making to real-time and improve efficiency and quality,” he says. “In this way, the opportunity to eliminate the need for some journeys and to move ahead with activities required to prepare the fleet to take advantage of lowest congestion times for journeys can be realised.”
Paragon’s William Salter also identifies the driver shortage as an issue that is becoming more noticed in the industry.
“In the UK, the driver shortage is a major issue that will only become more challenging in the short-and medium-term, so using advanced routing and scheduling software that allows transport planners to make the most of available resources at all times has become even more important,” he says. “Route planning software can also contribute to retaining existing drivers by planning workloads that are more achievable and factoring in personal preferences such as locations for meal breaks or overnight stops.
“In addition, operators can better support drivers by having the operational visibility to better understand and rectify any recurring issues they face, such as being repeatedly delayed at a certain customer location.”
Additionally, although there is plenty of data out there ready to support a fleet, it is not always used in the best or most effective way. “‘The data doesn’t lie, as long as you ask it the right questions,” says The Smart Cube’s Sidharth Sreekumar. “That is the crux of today’s problem.”
He says that today, fleet managers and procurement divisions generally have tons of data at their disposal, but no practical way to use it without lots of manual efforts. “Also, the data itself can be disparate, disjointed and error-ridden,” he adds. “Just beating it into shape to use for decision-making is a tiresome process that eats up a huge chunk of a fleet manager’s time, leaving little to no time for the higher value strategy and procurement decision work.”
Another important factor is making sure that the data used is completely accurate and unbiased. “Some companies which provide fleet management services are also leasing companies, without access to external data. Fleet managers should ensure that they work with companies that are supplier agnostic, to maintain information neutrality,” he says.
Collaboration and integration
On the strategic side of things, collaboration and integration is at the fore of fleet management.
“Given the efficiencies operators have already gained from fleet management solutions, further improvements will come from taking a more collaborative approach with partners and customers to overcome current challenges faced in the market,” says Descartes’ Tavener.
“Visibility of the entire supply chain is vital if the benefits of collaboration are to be realised; it is the ability to leverage and share accurate real-time information across the board that will enable operators to better manage assets and squeeze additional efficiency.”
Paragon’s William Salter predicts that, in the near future, there will be increased integration between a range of fleet management tools with other supply chain and back-office systems. This will happen as both the pressure to compete on both price and customer services continues to grow in the sector.
Europa’s Richard Litchfield agrees that integration should be a key strategy in the market. “There needs to be a continued focus on ever-increasing integration,” he says. “Many years ago, drivers would leave the depot and would in effect be on their own.”
Nowadays, drivers are an extension of the office. “Today, we are able to connect with drivers from the moment they leave to the moment they arrive at the destination, communicating important information that will enhance their performance and efficiency at every stage of the journey,” says Litchfield.
Nationwide drinks distributor Matthew Clark has chosen Paragon’s routing and scheduling software to mange its 225 strong fleet of commercial vehicles across nine regional depots.
The software is currently being used at the company’s depots in Birmingham, Southampton and Wetherby. The remaining site will take on the software over the next few months.
Deliveries are to be scheduled by a central planning team in Wetherby, which will enable the business to “flex the boundaries of depots where necessary to achieve a reduction in mileage and CO2 emissions.”
The drinks distributors’ customer order data is transferred from its order management system to Paragon’s multi drop routing software. This means deliveries can be planned on a next-day basis.
The schedules must include a large range of delivery variables based on the business’ product offering, including: wine, champagne, spirits, beer and soft drinks – and the different types of customer premises.
“For us, a delivery service that is accurate and arrives on time is absolutely critical to gaining competitive advantage,” says Jacqui Allan, head of transport planning at Matthew Clark. “Our customers now need more varied and frequent orders to deal with the ever-changing tastes of the UK consumer, especially when sales space is at a premium.
“Matthew Clark opted for Paragon Multi Depot to meet our requirements for a sophisticated multi drop route planning tool that will calculate accurate and efficient delivery routes to meet the just-in-time requirements of the on-trade marketplace. The implementation is going very smoothly and we look forward to realising the full benefits of Paragon’s software when the full roll out has been completed.”
TomTom Telematics and BP have partnered to deliver a new fuel and driver management interface. Fuel transaction information from BP fuel cards, taken from BP FleetMove, is combined with driver behaviour data from TomTom Telematics’ service platform in a joint interface.
The new platform is used to help companies save both time and money, to bring together “insights into driver, fuel and vehicle data, allowing easier identification of areas for improvement”. An app alongside the system enables drivers to access feedback on their performance.
“This is the first time BP and TomTom Telematics have created a partnership to combine different streams of data in this way – the fuel card will register fuel transactions and the telematics device will monitor the vehicle data,” says Koeno Siemons, European card marketing and operations manager at BP. “Combining these two elements allows BP fuel card customers to save time and reduce operating costs. The new app and fleet manager portal is just the start of what we will be launching in the coming months.”
Thomas Becher, vice president business development of TomTom Telematics, says: “We are committed to the on-going development of our connected car strategy – taking data and creating practical and workable insights for companies.
“What we are doing with BP is a prime example of this. We have taken advantage of our open platform to create a brand new user interface.”
Compliance: ensuring drivers stick to the rules
Compliance with legislation is something that all drivers and their fleet managers need to be actively aware of. But how active are fleet management systems in ensuring drivers stick to the rules?
“All transport operators should take a ‘compliance first’ approach to fleet management,” says Descartes’ Tavener. “There is little point in maximising operational efficiency if it puts stress on compliance with drivers’ hours regulations.”
To optimise operations and meet regulations, compliance rules have to be at the core of a system. “Compliance and fleet management are merging, so this will become even easier in a few years’ time, with the adoption of Smart Tachographs that will also combine GPS and communication capabilities,” adds Tavener. “Most recently, fleet management technology has evolved so that road transport operators can now focus on the compliance and performance of individual drivers.
“Operators have limited resources and need to focus their time and effort not on managing the data provided by fleet management technology, but on the exceptions highlighted in the data.”
Paragon’s William Salter says that the latest routing and scheduling, which includes advanced route control tools, is enabling transport planners to build routes that comply with complex legislative road restrictions, like the London Lorry Control Scheme (LLCS).
“This is cutting the time spent on manual planning and lowering the risk of incurring penalty fines, which totalled £2.73 million during 2015/16 for LLCS,” he says. “Meanwhile, way point mapping software is helping enforce plans once drivers leave base by feeding turn-by-turn guidance direct to the driver through their sat-nav device.
“Electronic proof of delivery software can also help enforce compliance with operational procedures.
“For example, manual, paper-based vehicle safety checklists can be streamlined by capturing all the necessary data via a mobile device.”
He says that customised forms can prompt the driver and stop them from progressing until the required information has been entered into the application. “Not only does the logistics operator have immediate visibility that a check has taken place, but it also standardises and simplifies the data collection process for each driver,” he adds.