For P&R Paper Supply, it’s time to hire a fleet manager once one of its branches gets to 10 box trucks.
“We leave it to the branch operational manager,” says Jason Karnes, operations manager at P&R Paper Supply. “If the branch manager thinks that the fleet responsibilities are starting to be overlooked, we look into hiring a full-time fleet manager to help with the office’s fleet.”
Running over 60 box trucks, P&R Paper Supply’s fleet is spread across five locations in California, Nevada, and Arizona. Currently, two of the company’s locations have enough trucks to need both a warehouse manager and a fleet manager, according to Karnes. The other three locations (with fewer than nine trucks) only hired a warehouse manager who handles both the responsibilities of the warehouse and the fleet.
“At our corporate office and our Union City location, the warehouse manager position got too big for one person,” says Karnes. “We split that role into a fleet manager and a warehouse manager at both locations. The fleet manager now handles the day-to-day operations for the fleet.”
With the help of fleet management companies and fleet dealers, a small fleet owner could outsource some fleet responsibilities — without needing to hire a full-time fleet manager. Additionally, advanced technology like telematics systems can help outsource a fleet manager’s data responsibilities.
There isn’t a one-size-fits-all answer to determine if it’s time to hire a dedicated fleet manager; each fleet has different needs. We talked to small fleets and fleet experts about factors that might tip the scales toward needing a fleet manager, including fleet size, dispersement of the fleet between locations, types of vehicles, and specialized equipment.
What’s a Fleet Manager?
Olen Hunter, director of operations at PacLease, says a dedicated fleet manager is usually a member of a company’s operational team in mid-level management.
Hunter breaks down a fleet manager’s responsibilities into five key areas: strategic planning for the fleet, communication, emergency management, customer service, and fleet benchmarking.
Strategic planning includes overseeing expenditure forecasting and analyzing operating expenses. Emergency management includes getting involved if there’s a serious incident involving one of the fleet vehicles.
Many fleet managers are vehicle and equipment experts. “Specialized equipment running 24 hours a day probably needs more oversight than other companies running their vehicles or units in a shorter duty cycle,” says Hunter.
“Oftentimes for small fleets, all of these responsibilities are shared by the management team or the warehouse manager since he interacts with the drivers most of the time,” he says.
Finding an expert to manage fleet finances, maintenance, operations, and even the customer service aspect, can be quite costly, adds Hunter. “Because this role touches so many aspects of the operation, It can be quite costly to hire the right person to cover these responsibilities.
Jeb Lopez, CEO of Wheelz Up, decided to handle fleet duties internally as his fleet has continued to grow. Now that his auto parts delivery service has over 200 cargo vans, he purchased a warehouse to maintain the fleet. Lopez hired a fleet manager to oversee the fleet as well as four full-time mechanics to service the vans.
“It was time to hire a fleet manager and in-house mechanics when we got to a level where we couldn’t maintain the vehicles by using outside sources anymore,” says Lopez. “I can’t use a dealership or repair shops anymore. It takes too much time and they can’t accommodate all the work that we have for our vehicles. We need 100% uptime for our delivery vehicles because our fleet makes us money.”
Internalizing fleet management has been cost effective for Wheelz Up. Lopez analyzed the cost of increased vehicle downtime when going to outside services versus the cost of having his own warehouse, the salary of his mechanics, and the cost of vehicle repairs.
When looking for a fleet manager, Lopez wanted a person who had hands-on experience with fleet as well as project management experience. “Our fleet manager thinks like a project manager with the fleet management cap,” he says. “Every day our fleet faces unknowns; the fleet manager takes care of these unknowns.”
At P&R Paper Supply’s two biggest locations, it’s been helpful splitting the fleet duties between the warehouse manager and the dedicated fleet manager. The fleet managers have been able to focus on the day-to-day operations of the fleet, including going on ride-alongs with drivers, monitoring preventive maintenance, routing drivers, and setting up driver training, according to Karnes.
Additionally, with experience in fleet, these managers can help the company manage regulations such as DOT compliance for DOT and the ELD (electronic logging device) mandate.
“When we had only warehouse managers running our 40-truck fleet, they didn’t go on ride-alongs with the drivers or route the trucks,” says Karnes. “They didn’t have time to do the fine details with a fleet of this size.”
Typically, a very small fleet (one to five trucks) can’t afford to hire a dedicated fleet manager, according to Hunter. In this case, a small fleet operator could look to outsource some fleet duties instead of hiring a full-time fleet professional.
Fleet management companies, leasing companies, and fleet dealers can act as a resource of expertise and take care of certain fleet roles, including maintenance of vehicles, vehicle acquisition, vehicle licensing, and driver training.
Outsourcing is not an all or nothing approach, says Hunter. “Some fleets manage everything in house while other fleets outsource everything. Some fleets have a dedicated fleet manager on staff, but that person needs to outsource some fleet responsibilities such as the paperwork and process of licensing in different states to avoid compliance issues.”
Most small fleets outsource maintenance on their vehicles. It can be costly having to wait for vehicles to get serviced at a local repair shop, but for most fleets, hiring their own mechanics might not be cost effective — after considering mechanics’ salaries as well as expenses for the repair shop, vehicle parts, regulatory compliance, and the disposal of used oil and other fluids.
Leasing companies like PacLease include maintenance as part of its full-service leasing programs and offer replacement vehicles to use during the downtime, according to Hunter.
According to a National Private Truck Council benchmarking survey, fleet members choose to operate a private fleet of trucks instead of outsourcing because they want to have more control over their service to their customer base, Hunter says.
Once a company decides to outsource some (or all) of its fleet duties, Hunter recommends doing the math to make sure that outsourcing would increase efficiency and save enough money to justify the expenses. “After one year, a fleet owner should go back and monitor the ongoing costs,” he says.
The Dealer Equation
McCluskey Chevrolet, a General Motors fleet dealer in Cincinnati, offers fleet expertise and several services to its small fleet customers. This fleet dealer has 75 technicians on staff and its maintenance shop is open seven days a week until 3 a.m., according to Keith McCluskey, CEO.
“A fleet can use its business vehicles during the day and then come to our dealership for preventive maintenance in the evening or down days,” says McCluskey, adding that the dealership provides courtesy vehicles and will pick up and return vehicles to a job site.
The technicians provide 27-point vehicle inspections and can fill out the paperwork required for DOT inspections. The idea is not only to make unexpected repairs but also predict and prevent future issues to minimize downtime and expense.
McCluskey points out that maintenance is paid for as needed, not rolled into a monthly contract. Fleets can take advantage of a commercial line of credit but aren’t charged if it isn’t used.
Additionally, fleet dealers can help fleets with vehicle acquisition and disposal. At McCluskey Chevrolet, its sales reps help fleet customers find and spec the right vehicle for their needs.
The first considerations include desired length in service and yearly miles driven, which help determine if purchasing or leasing would best fit the company’s vehicle needs, says McCluskey. “For example, if the fleet’s technicians only drive the trucks 18,000 miles per year and the company wants to keep its vehicles for at least 10 years, the fleet probably isn’t the best candidate for leasing,” he says.
For small fleets, McCluskey says a hybrid approach is often effective: “You might be able to have a warehouse manager work with our dealership for some responsibilities,” he says. “Give that a try first and then decide if you need a full-time fleet manager.”
A Mini Fleet Manager
With the advancement of technology, telematics systems can now handle a greater percentage of analytics for fleets.
“If properly set up, telematics systems can take the data and communicate directly to the driver,” says Torsten Gruenzig, sales director of Tom Tom Telematics in North America.
Telematics can manage data, diagnostics, routing, and the driver. In addition to miles per gallon and servicing, telematics can also help identify driver behavior such as speeding, hard stops, unscheduled stops, or unusually high idling time.
With telematics system’s dashboards becoming more user-friendly, fleets might avoid hiring a specific data person to read the information. The telematics system collates the data to let the operator strategize on how to make improvements and increase productivity, according to Gruenzig.
“If a telematics system is connected to a fleet’s CRM and ERP systems, telematics can serve as a mini fleet manager,” says Gruenzig. “But once you get to 25 vehicles or more, you are managing more people. At that point, you may need a fleet manager to supervise drivers and take care of other personnel tasks.”