All across the United States businesses utilize commercial fleets to get people and cargo where they need to be.
Commercial fleet vehicles are either owned or leased—there are unique benefits to both options. Companies that provide commercial fleet services companies offer leasing as well as fleet management and maintenance.
Businesses greatly benefit from operating their commercial fleets in an efficient manner. If this can’t be achieved in-house due to budget restraints or a lack of expertise, then leasing via a commercial fleet service provider may be the better option for your business.
A commercial fleet is a group of vehicles that are utilized by a company in order for it to pursue its business objectives. Commercial fleets are made up of fleet vehicles.
Fleet vehicles are either owned by the business that operates them or leased from a third-party provider. Any type of vehicle can be a commercial fleet vehicle including trucks, cars, buses, vans, and SUVs to name just a few.
Commercial fleets range widely in size—from small (a couple of vans working construction jobs) to large (a massive national plumbing business making use of thousands of vehicles), and everything in between.
Many different types of business operate a commercial fleet.
Commercial fleets are a big business in the United States. There are hundreds of thousands of commercial fleet vehicles on the road today with more being purchased every month.
To provide a sense of just how integral the commercial fleet industry is to the U.S., we have compiled some statistics.
A massive number of commercial fleet vehicles are utilized by businesses in the U.S.
As of January 1, 2019, commercial fleets owned 204,000 cars and 1,860,000 trucks. They also leased 431,000 cars and 727,000 trucks. With over three million vehicles in service, the commercial fleet industry in the United States is colossal.
The number of fleet vehicles in use is large and also growing.
In September 2020, commercial fleet sales from nine major OEMs totaled 58,348. This represents a slight decrease from the same period last year. However, given the uncertainty of the pandemic, it is still quite a strong figure.
There are all sorts of commercial fleets as many different types of businesses utilize them.
Some examples of companies that operate commercial fleets include plumbing businesses, electrical companies, shipping companies, construction companies, pest control companies, HVAC companies, telecom companies, waste management firms, and trucking companies—just to name a few.
Fleets can be made up of one uniform vehicle type or include a patchwork of different makes and models. Having only one type of commercial fleet vehicle makes maintenance operations easier, but sometimes specialized vehicles are required for unique tasks.
Businesses need to acquire vehicles in order to build a commercial fleet. The two main ways of getting commercial fleet vehicles are owning and leasing them. Each method has its own strengths and weaknesses.
Owning vehicles outright provides many benefits, including:
Businesses can write off the depreciation of the vehicles they own to save on taxes. However, if you choose to lease, the depreciation tax benefits go to the leasing company.
When businesses own their commercial fleet vehicles they may remove them from service at any time without penalty. When leasing, you are often obligated to keep vehicles for a set period of time, regardless if your business needs them or not.
Additionally, vehicles you own are not subject to wear and tear or maximum mileage limits like they are when you opt to lease commercial fleet vehicles.
Leasing companies now often go beyond just providing vehicles to their customers.
Commercial fleet service providers also offer full fleet management and maintenance for business’ fleets. Their expertise can help you better manage your fleet to increase efficiency and lower costs.
Leased vehicles are generally new vehicle models. There are a number of benefits to utilizing newer commercial fleet vehicle models, including access to the latest technology and safety features, good fuel economy, and fewer maintenance issues when compared to older models.
New leased vehicles have less mileage on them, fewer repair costs, and lower fuel expenses. Vehicles can also be replaced with the latest models after only a few years with a new leasing contract.
Commercial fleet services can be hired for a fraction of the cost of purchasing your own vehicles and establishing in-house fleet management and maintenance divisions. These companies have relatively low monthly payment options and let businesses make better use of their capital.
Many small businesses who would not be able to afford their own in-house maintenance department and equipment opt to lease their commercial fleet vehicles.
Purchasing commercial fleet vehicles is a large capital expenditure that can affect a company’s debt-to-equity ratio negatively.
Leasing is a much smaller expense than owning your own vehicles and is generally classified as an off-balance sheet asset. This puts your company in a better financial position when reviewed by investors or potential lenders.
Leasing a commercial fleet vehicle requires less paperwork than owning one. Businesses that lease their fleet vehicles through commercial fleet services don’t have to worry about time-consuming administrative tasks such as license and tag renewal.
Commercial fleets are utilized by businesses of all types and sizes—from small, three-van electrical companies to large, national telecom businesses employing thousands of vehicles.
Businesses that outsource fleet management and maintenance to commercial fleet service providers benefit from their knowledge, expertise, and favorable leasing agreements. Outsourcing commercial fleet services can also improve the efficiency of your company’s fleet as well as reduce expenses. Whether you have limited resources or simply want to prioritize other aspects of your business, outsourcing your fleet management could be a highly advantageous move for your company.
The vehicle miles traveled tax is known by multiple names: the mileage tax, road usage charging (RUC), distance-based user fees (DBUF), vehicle miles traveled tax (VMTT), or mileage-based user fees (MBUF). It is simply a tax based on how many miles a driver travels. It is an excellent option to replace the gas tax as a means to fund the Highway Trust Fund. This fund is how our nation pays for maintaining and building infrastructure projects such as roads, bridges, and tunnels.
The gas tax is an antiquated way of funding our infrastructure and has been inadequate for over a decade. It has not kept up with inflation in the last 25 years, causing it to drop in value by over 40%. In the last quarter-century, traffic has only increased as the population has grown. The wear and tear on our infrastructure worsens, but our ability to maintain it can’t keep up.
Furthermore, electric and fuel-efficient cars pay very little, if any, gas tax. They still use the roads and contribute to their degradation, but the drivers do not help pay for their upkeep. While electric and fuel-efficient vehicles are better for the environment, it is still important that these drivers pay their fair share of taxes for the roads.
This tax is already in place in Oregon and Utah on an opt-in basis. Washington, Colorado, Hawaii, Minnesota, California, Delaware, and Pennsylvania have researched road usage charging programs in their states with success. Oregon’s fully functioning road usage charging program, OReGO, is the leading example of how to implement a mileage tax nationwide.
OReGO uses Azuga Insight to automatically track driver miles and collect revenue without any staff needed or driver intervention. Drivers simply install hardware into their OBD port and set up a wallet online. As they drive, Azuga Insight tracks their miles and removes funds automatically from the wallet.
Participation in OReGO is optional, but drivers have the incentive of not having to pay increased registration fees based on mpg rating. Drivers who opt-in have to meet these vehicle requirements:
OReGO has been implemented smoothly and is easy to sustain.
Roads in poor condition cause 14,000 highway fatalities annually. It’s necessary for communities everywhere to obtain the funding to repair and maintain their roads. Streets all over the country are aging rapidly, and more funding in the Highway Trust Fund would help us stay on top of maintenance before more fatalities happen.
Most drivers will pay the same as they are currently paying under the gas tax, but all drivers will be paying instead of just some. This means that electric vehicles and fuel-efficient vehicles will contribute their fair share as well. Everyone pays for what they use, so drivers who don’t drive very much won’t have to worry about paying very much.
Experts believe that implementing a vehicle miles traveled tax across the US would increase the Highway Trust Fund by $340 million. This would fund improvements to existing infrastructure, along with new infrastructure for areas that have grown in the past 25 years.
The vehicle miles traveled tax is the most likely solution to the issue of our country’s crumbling infrastructure. It may be a long time before it is implemented across the nation, but as states pick it up, it is important to know what it is and how it will affect you. To keep up with the latest updates regarding the vehicle miles traveled tax, follow Azuga Insight’s blog.
Tracking fleet data is vitally important to running a fleet in any industry. Any kind of data can be tracked, from where vehicles are, to what assets a company has on hand, to the safety of drivers and vehicles. All of this information is important for fleet managers to know to make their fleet effective and productive. What is fleet data, and how can it help fleets be more effective?
Keeping up with vehicle maintenance is one of the best ways to keep vehicles on the road for the long haul. With how much time fleets spend driving, wear and tear on a vehicle is inevitable, but fleet managers can reduce this by harnessing telematics and maintenance alerts. Telematics can tell managers when a vehicle has engine trouble or when a driver is being rough on the brakes or idling too much. Managers can also set up maintenance alerts so they do not have to try and remember when each vehicle needs routine maintenance. Preventative maintenance is crucial to a vehicle’s longevity and will help it stay on the road for years to come.
Any fleet’s top priority is safety. Drivers and vehicles are integral to a fleet business’s entire operation, and ensuring that they do their jobs safely is a huge part of a fleet manager’s job. Luckily fleet data can track driver behavior and determine if drivers are behaving safely behind the wheel. Telematics can track actions such as hard braking, rapid acceleration, distracted driving, and speeding. When drivers display any of these behaviors, they will receive an alert. If the behaviors continue, the system will alert the fleet manager, who can then choose to get in touch with the driver. Accidents can cost thousands of dollars, and days of lost time for businesses, so avoiding them is crucial for companies to succeed.
Asset tracking is terrific for preventing theft, but it is also ideal for fleet managers to keep track of what they have on hand in their warehouse. Often, assets and equipment sit unused in a warehouse, taking up space that something practical could be occupying. With asset data, fleet managers can determine what assets the fleet does not use and get rid of them, making room for something that will be more beneficial for the company. Furthermore, knowing what’s on hand prevents double-purchasing, which saves the company money as well.
Tracking fleet data is essential for keeping a fleet productive and effective. It is all part of a fleet manager’s job. Luckily, Azuga has many tools to help with tracking fleet data. Reach out to the experts at Azuga today to find out how to get started gathering data today so that you can do the best for your fleet.
Each driver is required by the law to record a driver’s duty of status every 24 hours, using the structures stipulated by the Federal Motor Carrier Safety Administration (FMCSA). A record of duty status (RODS) can also be referred to as a driver’s log. It allows drivers to record details such as date, vehicle number, totals driving hours, the total number of miles driven within 24 hours, carrier’s name, a 24-hour period starting time, address, driver’s certification/signature, and remarks.
Records can be maintained using an electronic logging device (ELD), using an FMCSA approved automatic on-board recording gadget, or even manually on a grid. Logs must be validated at all times by indicating each change in a duty status.
A RODS is mandatory as part of Hours of Service (HOS) rules, which applies to commercial vehicles (CMVs). However, a few cases of short-haul carriers are exempt from maintaining records of duty status.
Company policies may be different, but the FMCSA only expects drivers to record time and location after every stop.
Since the introduction of the ELD mandate, several motor carriers are leaning toward electronic logging devices to maintain their records of duty status automatically. Companies were given until December 16, 2019 to update automatic on-board recording devices to the latest ones, meaning there were also some exemptions to the ELD Rule.
Exemptions to RODS regulations include the following:
For drivers to qualify for the exemption, they must meet all the requirements stated by the regulations. Failure to meet even one of the requirements means all HOS rules apply.
A driver must produce ELD records when requested by a safety official, either immediately, or within the permissible time if the motor carrier operates from more than one terminal or office. A motor carrier is supposed to retain a back-up copy of all ELD records for at least six months.
Only carriers or drivers falling under the exempted categories may use other recording methods, which may include automatic onboard recording devices (AOBRDs) to maintain driver record of duty status.
Being exempted from the ELD rule does not mean you are automatically exempted from the HOS regulations. A driver is required to submit original paper log sheets to their respective carriers within 13 days after the completion of their trips. The driver retains a copy of all RODS for the previous seven days, which must be produced on request for inspection at the time they are on duty. Drivers must also sign all hard copies of RODS.
The idea behind mandating the ELD rules was to provide accurate, consistent, and accessible methods of logging driver hours of service, and simultaneously create a safer working environment. The new measures were intended to ensure drivers took necessary breaks and rested appropriately, and to ensure they remained alert while driving. Making the switch from manual processes like logbooks to electronic hours of service tools makes it easier for businesses to keep up with the FMCSA requirements.
However, the implementation of electronic logging devices does not change the fleet manager’s responsibility to track off duty or driving hours. What it does require is that you make use of a log tracking device and software system.
The HOS rules apply to drivers operating CMVs such as school buses and semi-trucks. For a vehicle to be classified as a CMV, it must fulfil the following:
If a vehicle meets the qualifications above, it is required by the law to comply with HOS regulations and to maintain decent hours of service log.
Besides ordinary traffic violations and unsafe driving, it is common among drivers to fail to comply with HOS regulations. Hours of Service compliance counts as one of the core basics of CSA, and maintaining a low score is often a result of piling frustrations.
The ability to fix problems associated with hours of service is the most crucial way to keep safety scores in check, and helps in controlling the frequency of roadside inspections.
Below are the most common violations of Hours of Service and how you can fix them.
When entering data manually, issues like mathematical errors, poor handwriting, the omission of essential information, and many other mistakes, may arise. These are issues that can be minimized by implementing an electronic system that automatically fills in the required data when it is needed. Tired drivers can easily leave out essential data, which could be deemed a violation of the hours of service regulations.
The driver record of duty status graph shown on a log must always be up to date, showing each detail of changes. Forgetting, or simply failing to update duty status is common among drivers and leads to severe roadside inspections. It is mostly due to drivers failing on their mandate to remain vigilant by changing statuses.
It is easy to fix this recurring problem with the simple touch of a screen. All drivers have to do is to indicate the time their shifts start, and to change their status to off-duty when shifts end. Electronic logbooks are designed to detect when a vehicle is stationary or in motion, and gives accurate data at all times.
Failing to properly maintain your RODS and not maintaining logs for seven days is a violation that can lead to hefty fines. Drivers of companies running smaller vehicles may not be aware of what is required of them, but they must check with the relevant authorities. Inspectors ask for records of the previous seven days. Therefore, drivers must not misplace any record whatsoever.
Azuga works with you to deliver customized solutions for fleets and drivers. It doesn’t matter the size of your fleet, Azuga offers the right products and technology to duly maintain drivers’ records of duty status and keep you compliant with the hours of service regulations.