Fleet safety and risk management play a pivotal role in fleet operations, influencing the safety of drivers, passengers, and other road users, as well as the fleet’s cost-effectiveness, operational efficiency, and reputation.
There is no denying the fact that fleet and safety managers have an ever-increasing workload, and measuring and comparing these factors can be challenging, as there are many variables, standards, and sources of data involved.
In this article, you will learn the best way to benchmark and compare fleet safety and risk performance, and how to use the insights to improve your fleet operations.
What is Fleet Benchmarking?
Fleet benchmarking is the practice of comparing the performance, efficiency, and safety of one’s own fleet of vehicles with industry standards, the best practices of other similar fleets, or against internally set standards.
First, you measure your current performance, and then you track progress towards your goals. This process involves collecting and analysing data related to various aspects of fleet management, such as vehicle utilisation, maintenance, fuel consumption, driver behaviour, and safety records, and then using this data to identify areas for improvement. With telematics software, users can gather a large volume and variety of data, set unique fleet goals, and then make necessary adjustments to save money and resources.
Fleet benchmarking aims to enhance the overall performance and effectiveness of a fleet, reduce operational costs and ensure compliance with industry standards and regulations. Benchmarking is supposed to answer the following questions:
- How do my fleet risk metrics look compared to the benchmark?
- Which vehicles are exposed to risk factors in hazardous areas, speeding, rain, hail, traffic, etc.?
- How can we improve driver safety?
- What factors greatly impact my total cost of risk?
- How can I amplify my driver-scoring prowess? (insurance cost)
The key aspects of Fleet Benchmarking typically include:
- Performance Metrics: Evaluating various performance metrics, such as fuel efficiency, maintenance costs, vehicle utilisation, driver behaviour, and safety records, to determine how well the fleet is performing.
- Cost Analysis: Analysing the costs associated with fleet operations, including fuel costs, maintenance and repair expenses, insurance, depreciation, and more. This helps identify cost-saving opportunities.
- Comparative Analysis: Benchmarking involves comparing your fleet’s performance and costs to industry benchmarks or similar fleets within your organisation or region. This allows fleet managers to gauge how well they are doing relative to others.
- Goal Setting: Setting specific goals and targets based on benchmarking results to improve various aspects of fleet performance, such as reducing fuel consumption, lowering maintenance costs, or improving driver safety.
- Continuous Improvement: Fleet benchmarking is an ongoing process. It involves regularly tracking and measuring performance metrics and making adjustments to fleet operations to achieve better results.
The benefits of Fleet Benchmarking
Each fleet is unique, and finding the optimal benchmark for your fleet can be a challenge. Fleet benchmarking can provide several benefits to organisations, including:
- Your Unique Fleet: Learn about your fleet’s unique driving pattern and challenges, uncover gaps, and identify strategic savings opportunities.
- Identifying Inefficiencies: It helps uncover inefficiencies and areas where operational improvements can be made, leading to cost savings and increased productivity.
- Optimising Asset Utilisation: By analysing vehicle utilisation data, fleet managers can determine if their vehicles are being used efficiently and whether adjustments, such as downsizing or expanding the fleet, are needed.
- Enhancing Safety: Benchmarking driver behaviour and safety records can lead to improved driver training programmes and reduced accident rates.
- Reducing Environmental Impact: Monitoring and optimising fuel consumption and emissions can contribute to more environmentally friendly fleet operations.
- Improved Decision-making: Data-driven insights from benchmarking enable better-informed decisions regarding fleet management strategies and investments.
Benchmarking my fleet – where do I start?
Benchmarking is a process of comparing the strengths and weaknesses of organisations with the aim of learning how best to make improvements. Here are steps to get started with fleet benchmarking:
1. Define your Objectives
The first step to benchmark your fleet performance, risks, and costs, is to define your goals and objectives. What are you trying to achieve with your fleet? What are the key challenges or issues that you want to address, and how will you measure your success?
Common objectives include reducing fuel consumption, improving safety, enhancing vehicle utilisation, or cutting maintenance costs. For fleet benchmarks to be useful, you must measure something relevant to your business needs. For example, if you set a fuel consumption benchmark of 18L/100km, you must measure the actual fuel use.
Examples of some useful benchmarks are:
- Cost per distance travelled (CPK)
- Maintenance: This can be overall per vehicle or drilled down to specific parts or components. For example, vehicles that travel regularly on dirt roads: how many windscreen breakages per vehicle.
- Tyres: Does one driver need to replace tyres more often than the others do?
- Accidents: How many incidents per 1,000 kilometres and is one driver more prone to this than others are.
- Speeding: Combined with on-board vehicle telematics this can identify errant drivers.
2. Select your metrics
The next step is to select the metrics that will help you track your progress and compare your performance and costs with others.
Metrics are quantitative indicators that measure your fleet performance and costs in areas such as safety, maintenance, utilisation, productivity, and environmental impact. It’s important to choose metrics that are relevant to your goals, such as collision rate, injury rate, claim frequency, claim severity, fuel consumption, compliance score, or customer feedback, and above all are easy to collect and report on. These metrics should be SMART: specific, measurable, achievable, relevant, and time-bound.
Common metrics for fleet performance and costs can include:
- TCO (total cost of ownership) is the sum of all costs associated with owning and operating a vehicle over its lifetime.
- CPK (cost per kilometre) is the average cost of operating a vehicle for one kilometre.
- Fuel efficiency is the average distance travelled by a vehicle per unit of fuel consumed.
- Maintenance cost is the total cost of preventive and corrective maintenance for a vehicle.
- Safety performance measures the number and rate of accidents, injuries, fatalities, violations, and claims involving fleet vehicles and drivers.
- Utilisation rate is the percentage of time that a vehicle is in use.
- Productivity measures the amount and quality of work performed by fleet vehicles and drivers.
- Inventory Management: Maintaining and tracking inventory can help in avoiding a shortage of assets (drives and vehicles) to eliminate or reduce downtime.
3. Collect and analyse your data
Once you have your goals and metrics, you need to collect and analyse your data. You can use various sources of data, such as telematics, driver behaviour monitoring, vehicle inspection reports, maintenance records, insurance claims, regulatory reports, or customer surveys. You should ensure that your data is accurate, complete, and consistent and that you use the same definitions and methods across your fleet. You should also use data analysis tools, such as dashboards, charts, or tables, to visualise and summarise your data, and to identify trends, patterns, or outliers.
The two most important data sources for fleet managers are:
- Fleet Management Software
Fleet management software serves as a centralised platform that integrates various aspects of fleet operations. It allows fleet managers to track and monitor KPIs such as fuel efficiency, maintenance schedules, and driver performance. The software provides real-time data updates, enabling fleet managers to have a comprehensive view of their fleet’s performance at any given moment. This empowers them to identify areas for improvement, track progress, and make informed decisions to optimise operations.
- Telematics Systems
Telematics systems, which consist of GPS tracking devices and onboard sensors, provide valuable data on vehicle performance and driver behaviour. These systems capture information such as speed, acceleration, braking patterns, and idling time – all of which can have a significant impact on a fleet’s cost and performance.
Most fleets have a mix of different vehicle types, no matter what benchmarking tool you use, ensure your data is segmented by vehicle type, which enables a far more accurate comparison. This will allow you to use a two-benchmark system.
The first allows you to compare your performance to the all-user average in the system. This gives organisations a clear indication of where they sit as part of the whole picture – are they above or below average? But that in itself is only part of the picture and doesn’t help them determine if where they are is good enough.
The second benchmark is to compare against good practice and industry standards.
Examples of data to analyse are:
- Fleet age, utilisation, downtime, funding for replacement equipment
- Uniformity throughout the organisation (policies, measures and targets)
- Life cycle costing for purchasing equipment
- Fleet management accountability
- Measures and targets for downtime and scheduled vs. unscheduled activities
- Who is responsible for fleet management?
- Collaboration between operating organisations
4. Compare with internal and external benchmarks
After you have your data and analysis, you need to compare your fleet safety and risk performance with internal and external benchmarks. Internal benchmarks are the standards or targets that you set for your own fleet, based on your goals and metrics. You can compare your current performance with your past performance, or with the performance of different segments, units, or drivers within your fleet.
External benchmarks are the standards or norms that are set by the industry, the market, or the best practices. You can compare your performance with the performance of other fleets, competitors, or peers, or with the performance of industry leaders or benchmarks. These fleets will serve as your benchmarks. You can often obtain benchmarking data from industry associations, consulting firms, or fleet management software providers.
5. Identify gaps and opportunities
Based on your comparison, you need to identify the gaps and opportunities for improving your fleet safety and risk performance, then set realistic targets for improvement in the areas where your fleet is underperforming.
Gaps are the areas where your performance falls short of your benchmarks, and where you need to take corrective actions or implement changes. Opportunities are the areas where your performance exceeds your benchmarks, and where you can leverage your strengths or share your best practices.
You should prioritise the most critical or impactful gaps and opportunities and set realistic and attainable goals for addressing them. These targets should be specific, measurable, and time-bound.
6. Implement and monitor actions
Finally, you need to develop and implement strategies and initiatives to address the identified areas for improvement, this includes:
- Implementing Changes: This may involve changes in vehicle maintenance practices, driver training, safety programmes, or technology adoption.
- Monitoring Progress: Continuously monitor your fleet’s performance against the benchmarks. Regularly update your data and assess the impact of your improvement initiatives.
Once the recommended improvements have been implemented and given time to take effect, one can ask the final question, “How big was the improvement?”, which in turn means:
- Adjusting Strategies: If you find that your fleet is not meeting its improvement targets, adjust your strategies as needed. Flexibility and adaptability are key to successful benchmarking.
- Sharing Insights: Share the results and insights of your benchmarking efforts with relevant stakeholders, such as management, drivers, and maintenance teams. Effective communication can foster support for improvement initiatives.
- Repeat the Process: Benchmarking is an ongoing process. Regularly revisit the benchmarking cycle to track progress and make further improvements.
Benchmarking is a good way for fleets to leverage the data they have. For benchmarking to be effective, fleets must look at data over time to see if their performance improved or deteriorated. They also need to compare vehicles in their own fleet and then compare vehicles in their fleet with those from other fleets. This information can be used to pinpoint areas that need improvement or to spot new trends and ultimately assess their fleet risk profile.
When data is collected, analysed, and put in context, it can give fleet managers great insights into their operation and help them make better decisions on how to improve all aspects of their operation.