Trucking businesses serve an integral role in the economy since they are responsible for transporting almost anything you can think of. According to the U.S. Labor Department, about 70% of everything you use, eat, wear or enjoy around your home is reached there via a truck. However, if you’re a trucking business owner, you may want to consider outsourcing your fleet services. Although having a private fleet management team may sound enticing since you have total control, there are many benefits to outsource fleet services.
8 Reasons Trucking Businesses Should Outsource Fleet Services
You may have considered outsourcing your fleet services and maintenance to a third-party company. However, maybe you’re hesitant to give up control. Here are eight vital reasons you should consider outsourcing fleet services for your trucking business.
1. Ability to Lease Vehicles
One way to reduce your operating costs and help your business scale is to lease vehicles instead of owning them. Fleet services allow you to lease their trucks, meaning you won’t have to pay the hefty initial investment of purchasing the vehicle. Instead, leasing allows you to preserve capital since the leasing agreements have low monthly payments.
Company executives can reallocate those funds to other areas that require more attention. Also, fleet services usually provide newer fleet models meaning your fleet trucks have a lower probability of needing repairs. Furthermore, newer models tend to have a better fuel economy. In 2016, the St. Lawrence County in New York changed its approach from owning to leasing. As a result, they leased 24 new vehicles, which cut their fuel costs from $50,000 to $25,000 annually, and reduced maintenance costs from $30,000 to $2,000 annually.
2. Access to Advanced Technology
Fleet management companies make a living off of managing logistics and operating fleet vehicles. So naturally, they’ll use advanced technology to provide the best service to their customers.
Using fleet management software will provide key insight into the safety and effectiveness of your fleet. For example, you may notice that your drivers are speeding, braking, or idling excessively, causing safety hazards and increasing fuel costs. You might also see that the routes planned aren’t optimized for efficient fuel consumption.
3. Ensures On-Time Delivery and Exceptional Customer Service
One of the foundations for success regarding trucking businesses is having repeat customers. Having fleet management software with route mapping and vehicle tracking helps ensure that all freight deliveries are delivered on-time. Clients will also receive accurate ETA’s, giving them peace of mind that the goods are being delivered to the designated warehouse.
4. Expect Reduced Costs
There are many ways your trucking business will reduce costs from outsourcing fleet services. A few of the ways include leasing vehicles, optimizing fuel, reducing repair costs, having access to discounted insurance policies, and not paying for full-time employees and their benefits. Most fleet service companies can refer you to high-quality fuel suppliers, manufacturers, and insurance companies, along with a discounted rate. Since you’re hiring fleet managers and services on a contractual basis, it’s much cheaper than hiring dedicated full-time employees.
5. Handles Maintenance and Fueling
A third-party fleet services company will help you stay vigilant regarding preventative maintenance for your fleet trucks. They’ll track metrics such as engine hours, fuel use, and mileage, which will inform you when the vehicle is due for repairs. Although you can hire an in-house person to do it, that’ll require unnecessary additional costs, such as employee benefits. Fleet service professionals will perform routine tuneups and inspections. They will also design simple instructions for drivers to perform maintenance routines between checkups to ensure that the vehicle is in tip-top condition. This will increase the lifespan of the vehicle and reduce repair costs.
One of the main drivers for high fuel costs is poor driving behavior or ineffective route planning. Fleet service providers will monitor start and stop movements, speeding, cruise control, excessive idling, and hard braking. They will also optimize routes to reduce fuel costs, such as using alternative roads or driving during off-hours to prevent rush hours or high-traffic areas.
6. Able to Handle Collections
One of the most overlooked fleet tasks to outsource is billing and collections. If you’re a smaller trucking business, you likely have most of your human resources dedicated to delivering raw material on time and handling logistics. Chasing and tracking overdue accounts can be extremely stressful and take valuable time away from growing the business. Ensuring that your trucking company is paid for jobs completed and freight delivered is an essential task. Fleet services can handle the billing and collections aspect by keeping everything organized for accounting purposes. This means you only need to focus solely on completing the job and making your customers happy.
7. Focus on Business Core Competencies
Having your leadership team wear multiple hats can cause reduced efficiency on business tasks that matter most. You can off-load the fleet management tasks to a third-party company so that your team can redirect their focus to your core business competency. For a trucking business that means focusing on acquiring new jobs, training employees, supporting the right niche, and building a profitable relationship with shippers. As you allocate more resources and pay more attention to these core competencies, you’ll be able to scale your trucking business and improve your bottom line.
8. Reduce Risk
It is very useful to be able to lean on the expertise of fleet service professionals. They’ll be able to ensure that your fleet is DOT compliant to avoid severe penalties and fines. Many DOT FMCSA regulations must be adhered to, ranging from inspections to maintenance to registration to licenses.
Fleet services can reduce risks by incorporating driver safety training, provide asset tracking, and alert potential fuel theft. If you’re running a large fleet that consists of over a hundred vehicles, it can be easy for assets to be lost or mixed up with. Tracking these assets ensures that your customers will be happy with your service if you’ll be able to have them recovered if in case of lost goods.
There is a wide range of moving parts when it comes to fleet management. If you manage your fleet without the proper technology or expertise, you could be oblivious to the type of problems holding your trucking business back. According to a recent survey we conducted, 44.83% of companies still keep their risk management in-house. In this case, Azuga is a great fleet management software that offers various features such as geofencing and route planning, which puts your fleet in good hands. Check out Azuga to see how their platform can boost your bottom line.