Top 4 Fleet Management KPIs Every Manager Should Track

Introduction

Determining the best fleet management KPIs to improve your company’s logistics is crucial. By fleet KPIs, we refer to the key performance indicators that affect the smooth running of operations. Fleet management optimization is about improving the essential telematics data if you know the fleet KPIs to target.

This article defines fleet management KPIs and explains the performance metrics for overall efficiency, cost-effectiveness, safety, and customer satisfaction. Whether your company has a few trucks or a large garage of vehicles, the strategy is to identify the correct KPIs for fleet management.

What Are Fleet Management KPIs?

KPIs for fleet management are the Key Performance Indicators that function as measurable metrics to evaluate progress. For fleet management, these KPIs will refer to the quantifiable values by which the company can assess its overall vehicle tracking systems. It is impossible to measure the effectiveness of your vehicle maintenance and driver management policies without fleet KPIs.

Importance of KPIs for Fleet Management

The next questions that might pop up are- how do KPIs help with fleet management? What does a company gain from gathering and analyzing fleet management metrics?
The advantages of KPIs for fleet management in any organization include:

• Fleet efficiency indicators
• Operational cost management
• Proper vehicle utilization
• Enhanced safety and compliance tracking
• Higher customer satisfaction scores
• Driver behavior analytics
• Data-driven decisions

4 Fleet KPIs to Target for Improved Performance Metrics

Now that we understand the importance of KPIs for fleet management, let’s check out the top telematics data to target. We have classified fleet management KPIs into four as listed below:

• Efficiency KPIs
• Safety and driver behavior KPIs
• Operational cost management KPIs
• Customer satisfaction KPIs

1. Efficiency KPIs for Fleet Management

These refer to the fleet management KPIs to measure the effectiveness of your vehicle tracking systems, asset management, and downtime analysis.

• Fleet Utilization Rate

This efficiency fleet KPI involves analyzing telematics data on the effective usage of your vehicle. The fleet utilization rate is a percentage of the expected capacity or maximum functionality. One method is to set your fleet management KPIs dashboard to track idle and active usage times to prevent underutilization or excessive usage.

How do you calculate fleet utilization rate?

Fleet utilization rate (%) = (Total working hours used/ Total working hours available) x 100

For a group of company delivery trucks operating an average of 8 hours out of 24 hours daily, the fleet KPI for utilization rate is 33.33%. The fleet utilization rate for a company’s freight and logistics could also be a load-based formula that compares the maximum load capacity to the average load. A 50-ton capacity truck that delivers 25-ton goods operates at a 50% fleet utilization rate.

• Fuel Economy

Fuel economy is the average distance a fleet travels per unit of fuel. Otherwise known as fuel efficiency or gas mileage, it is usually represented in miles per gallon (MPG) or kilometers per liter (km/L). Fuel economy is one of the most important fleet KPIs to improve vehicle utilization rates.

How do you calculate fuel economy for fleet management metrics?

Fuel economy = Total distance covered/Total gallons or liters consumed

Some common factors that can influence your calculated fuel economy are:

• The vehicle’s model
• Route optimization
• Drivers behaviors
• Fleet utilization rate based on load
• Routine maintenance checks

• Fleet Preventive Maintenance

The efficiency KPIs for fleet management also include the preventive maintenance compliance of your vehicles and trucks. This fleet KPI measures adherence to scheduled maintenance arrangements. Hence, preventive fleet maintenance compliance is the percentage of completed maintenance to the total scheduled tasks.

Preventive maintenance compliance = (Completed preventive maintenance tasks / Total scheduled preventive maintenance tasks) x 100

Imagine a company that completed 45 out of its scheduled 50 preventive maintenance. The compliance tracking percentage is calculated as 90%. High percentage KPIs for fleet maintenance meet manufacturer recommendations and minimize vehicle breakdown. We suggest you have fleet management software to monitor maintenance routines such as brake inspections, tire rotations, coolant, and fluid checks.

• Fleet Downtime Analysis

The average downtime of your vehicles or trucks is one of the important fleet management KPIs to track. Low vehicle downtimes signify your fleets are available almost all the time which is essential for timely deliveries and increased productivity.

On the other hand, having high downtimes on your fleet management KPIs dashboard indicates you need better preventive maintenance measures. Another solution is investing in more quality vehicle parts to minimize downtimes.

2. Safety and Driver Behavior KPIs for Fleet Management

These fleet management KPIs are quantifiable measures to evaluate safety incidents and accident rates. They help you track driver behaviors, road safety compliance, speeding, acceleration, and braking

• Safety Incidents and Accident Rates

Proper safety incidents and accident rates reporting on your fleet management KPIs dashboard reduce repair costs and legal penalties. It also promotes a safety culture among fleet drivers and minimizes downtimes.

Safety incidents cover near misses, equipment failures, or violations of safety protocols. Accident rates KPIs for fleet management are to track the frequency of accidents per million miles/kilometers driven and compare to regulated industry standards.

• Driver Behavior and Safety Scores

Our next KPIs for fleet management are the driver behavior and safety score metrics. These fleet KPIs use GPS and advanced telematics systems to measure your drivers’ average speeding, accelerating, and braking behaviors. Implementing sensor monitoring systems to get real-time data on vehicle movement helps identify risk patterns that could cause accidents. Studying driver behavior and safety scores is the use of a fleet management KPIs dashboard to take proactive safety steps.

3. Operational Cost Management KPIs for Fleet Management

Cost management KPIs for fleet management function as performance metrics to track the running costs of your vehicles. The following fleet KPIs assist managers in identifying possible cost-minimization opportunities without affecting quality deliveries.

• Fleet Administrative Costs

Fleet management KPIs for administrative cost optimization involve the overall expenses to manage and control the vehicles. That includes labor costs, training and development, insurance and licensing, to ensure budget compliance. Every cash spent on fleet utilization and efficiency must be compared to the respective ROI.

• Cost Per Mile

One of the fleet management KPIs for the cost-effectiveness of your vehicle logistics is the cost per mile. This fleet KPI evaluates the total cost incurred for every mile traveled. It is an important performance metric to discover optimization strategies to minimize expenses per trip.

How do you calculate the cost per mile?

Cost per mile = Total fleet operational costs for a fixed duration / Total miles driven for that duration

The expenses involved in this operation cost management include fuel, maintenance, insurance, driver, and administrative costs. Depreciation is another often overlooked component of the total operation costs for your fleet KPIs. Implementing a fleet management KPIs dashboard to track cost per mile can help with route optimization strategies.

• Vehicle Total Cost of Ownership (TCO)

Cost-related KPIs for fleet management also involve understanding how to calculate the true value of a vehicle. We term this the vehicle’s total cost of ownership defined as the entire cost of procurement and operation over its lifecycle.

Let’s take an illustration:

A fleet manager has to purchase one of two vehicles A and B. For vehicle A, the selling price is lower than B, but higher fuel consumption and maintenance costs. Calculating the total cost of ownership over a fixed duration of about five years will give vehicle B better cost-effectiveness. Despite the lower purchasing price, vehicle A will have higher accumulated operating costs over the fixed duration.

4. Customer Satisfaction KPIs for Fleet Management

Most managers set up their fleet management KPIs dashboard to assess performance metrics involving efficiency, cost, safety, and driver behavior. However, many overlook the importance of customer satisfaction KPIs for fleet management such as:

• Delivery Rates

The delivery rate is a key performance indicator (KPI) for fleet managers to measure the effectiveness and reliability of their good and service dispatch methods. Delivery times as fleet management metrics help you discover how many times the customers received products upon agreed schedules.

On-time delivery rate = Number of On-time deliveries/ Total number of deliveries

The advantage of fleet KPIs is in their complementary statistics. For instance, a low delivery rate could signify the following:

• Poor route optimization
• Lack of routine vehicle maintenance
• Poor driver behaviors
• Ineffective communication systems for customers who value timely service.

Delivery rates are a critical KPI for fleet management metrics to get higher customer satisfaction and competitive advantage.

• Customer Satisfaction Scores (CSAT)

Customer satisfaction score is a popular fleet management metric to measure customer feedback on goods or services rendered. Higher scores serve as fleet KPIs to indicate greater satisfaction and compliance with service level agreements (SLA).

How do you calculate customer satisfaction scores?

CSAT = (Number of satisfied feedback) / (Total number of feedback) x 100

This fleet management KPI is important because a good delivery time is not always adequate since some customers might have issues with the overall experience. An example is poor communication during dispatch even with an on-time delivery. Delivery accuracy is another factor that can affect CSAT.

Conclusion:

Fleet management KPIs are related, providing a comprehensive optimization system affected by the different performance metrics. The efficiency fleet KPIs influence cost management, which also impacts the customer satisfaction KPIs. Similarly, driver behavior and safety will affect cost optimization analysis, and ultimately the customer experience.

Determining the best KPIs for fleet management depends on identifying those that align with the company’s objectives. The top KPIs assist managers with data-driven decisions, improving the quality of fleet operations, and maintaining a strong competitive edge. Leverage the fleet KPIs that ensure smooth and efficient operations today.