How does fleet management work?


According to MarketsandMarkets, the fleet management market, including GPS tracking and telematics, is expected to grow from $ 19.9 billion in 2020 to $ 34 billion by 2025 at a compound annual growth rate of 11, 3% over the forecast period. The MarketsandMarkets report suggests that the main reasons for the growth are strict government regulations, the increase in the number of cloud-based solutions in use, the growing use of the Internet of Things (IoT) and the growing demand for analytics. big data.

So what is fleet management and which companies are using it?

Simply put, fleet management is the organization and administration involved in the coordination of company vehicles. The ultimate goal is that companies can control the entire lifecycle of the fleet, which in turn would allow them to improve efficiency, reduce costs, increase productivity, reduce risk and ensure compliance with government regulations.

Work vehicles are an important part of the economy and are used in one way or another in almost all industries. Companies with fleets include carriers, couriers, sales, repairs and services, utilities, public transportation, oil and gas delivery, and emergency services. Even if a particular company does not have its own fleet, it is likely that it depends on a fleet for part of its supply chain and may outsource it to another company.

The components of fleet management

There are many components of a fleet management technology solution. Here we take a look at the main parts:

Fleet monitoring

Fleet tracking uses GPS to monitor assets – vehicles, workers, or equipment. It uses telematics technology to collect real-time data to immediately deliver actionable information to fleet managers. This way a manager can know which vehicles to send, where a vehicle is positioned and when a vehicle returns, for example.


Fleet management software allows a manager to have all the information they need about the fleet in one place. It acts effectively as a database, which can help organizations keep track of everything from expenses to dispatching drivers, sending updates to customers, compliance tasks, driver behavior and to fuel consumption. Some of them will require different applications as part of a suite, but the data could be pulled from the overall database, making the administrative process much more efficient and fleet managers more productive.


Telematics are usually black boxes installed inside a vehicle that track its location, performance and also give the fleet manager an idea of ​​how the driver is driving. For example, it can tell them if a driver is accelerating too much or braking hard, resulting in additional fuel costs. Operational data collected by telematics systems includes: vehicle speed, miles per gallon, fuel consumption, load weight, gear, braking intensity and driving style. In addition, some telematics systems can inform the fleet manager if the ignition is on, if a vehicle’s doors are open and if the panic alarm has been triggered. The data is sent directly to corporate servers or to a vendor’s server to which an organization has access.

Security and safety

Security is typically built into the solution rather than as a stand-alone application or feature.

As the use of technology has grown, cybersecurity risks have increased, so it is imperative that a fleet manager examines software and hardware products before selecting them. Those with encryption policies, identity and access management, and security validation are more likely to have the right security in place to secure the software. It is also important to know the type of infrastructure they are using and where the data will be stored, as well as the third party providers used.

Most other aspects of safety are concerned with maintaining the safety of the driver and the vehicle.

One of the features available in some solutions is driver identification, so that drivers can identify themselves when using a vehicle using biometrics or a key fob. This will help you if there are speeding tickets or third party insurance claims.

Additionally, vehicles can be configured to be started only by authorized drivers, and there can be notifications when doors are opened and closed, alerting the fleet manager to suspicious activity.

Tracking technologies such as telematics and GPS tracking can help detect unsafe driving patterns, anticipate a potential accident, and allow the fleet manager to intervene. They can also help locate remote assets or vehicles to ensure that the content and the asset itself are safe.

Maintenance follow-up

With vehicles being one of the most important investments for a fleet manager, it is essential that there is a proactive approach to maintenance.

Maintenance software, often included in fleet management solutions, allows organizations to plan and track vehicle maintenance and repairs. They can also create purchase orders for parts and suppliers, and send invoices to customers through this platform. In addition, other documents such as warranties, claims, supplier details and maintenance history can all be stored.

Using GPS fleet tracking, fleet managers can automatically track mileage, fuel consumption and engine hours, so they can be alerted when a vehicle needs repair or maintenance. It is also a strategic decision as it can enable them to plan how they will use their assets, budget and people in the most efficient and cost-effective manner. In addition, the ROI of the vehicle will increase thereafter.

The difference between active and passive trackers in GPS tracking

When selecting GPS tracking for fleet management, there are two different types: active and passive. Depending on your needs, either of these fleet tracking systems could work for your business.

Passive tracking systems can store GPS position, vehicle speed, and other data on driver behavior. Think of them as a data logger – similar to the GPS trackers on many fitness watches, they can log information and this data can then be downloaded and viewed once the vehicle is reconnected to the fleet management software.

For fleets that want to track mileage and more basic information, without the need for real-time tracking data, passive tracking systems are ideal.

Instead of having to manually download and access data, active systems use cellular networks – 4G and 5G – to send data directly to the server. This means that businesses don’t have to connect the device to the server to download the data, instead it is processed and delivered in real time. For fleet managers who want to make sure their drivers receive notifications and alerts anywhere, they have a better understanding of real-time location and vehicle information. This allows them to subsequently have more strategic control over their fleet; for example, public transport systems or delivery companies can redirect their drivers in real time to make them more efficient.

Businesses that want to set up a geofence – a predetermined area on a map – can do so on active tracking systems. This means that if the vehicle arrives or leaves the geographically fenced area, the fleet manager will be alerted.

There are more security measures for active tracking systems, as they allow fleet managers to track the location of the vehicle in the event of theft.

Due to the additional features of active GPS trackers, they are more expensive than passive trackers. However, software vendors will argue that the additional productivity and efficiency gained would make up for the difference in being able to access data in real time.

In summary, passive trackers are used to record and store important data, which can be downloaded later, while active trackers record and store the same information, but also transmit this information in real time, opening up new possibilities on how whose fleet managers can act on this data.

Main features and benefits of fleet management, GPS tracking and telematics software:

  • Many administrative tasks such as quoting, invoicing, identifying and dispatching drivers, managing expenses and informing customers can be simplified or automated.
  • Fleet managers can track fuel consumption, monitor vehicles and drivers for over-fuel consumption, and monitor driver behavior. By doing this, fleet managers can manage fuel costs more effectively. For example, by analyzing driver behavior, managers can gain insight into downtime that can contribute to significant fuel expenditure.
  • Fleet management software can be equipped with workflow automation software, providing managers with regular service and maintenance reminders based on factors such as date, mileage or time of use . By monitoring the maintenance schedule, managers can act before a vehicle shows signs of malfunction
  • Simplification of the management of drivers in the field with an application to communicate with them via messages and commands. In addition, vehicles can provide information on updates regarding the order and estimated time of arrival.
  • Improved data accuracy – telematics data would help remove redundant entries in fleet management databases
  • Regulatory and legal compliance can be better monitored as all information is kept up to date and notifications on expiration dates can be used.
  • All of the above can help fleet managers become a more strategic part of the overall business, as they can help with budgeting and forecasting, sustainability efforts, and managing big changes (such as dealing with resulting changes. of the Covid-19 pandemic).
  • Fleet management products also integrate with other software vendors, making other tasks more transparent such as payments, route optimization, and HR tasks.

Overall, fleet management software, GPS tracking, and telematics can help fleet managers automate, optimize and ultimately reduce costs.

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