Ways private fleets have grown stronger

By John D. Schulz, contributing editor -- Logistics Management, 4/1/2008

Private fleets operate in a totally different environment today than 10 or 15 years ago. Efficiencies are possible now that didn’t exist even just a few years ago.
Technology has been a huge boon to private fleets. These fleets can now buy the same software that the best for-hire carriers use to maximize load optimization, keep their trucks full, and eliminate costly empty miles. In-cab communication with drivers is now done in real time, further improving private fleet equipment utilization in the battle to reduce empty miles. In fact, some technology providers for the trucking industry say private fleets are in some ways ahead of their for-hire brethren in this area.

According to Ron Konezny, COO and CFO of PeopleNet, a mobile communications and onboard computing provider, 40 percent of his company’s business now comes from private fleets—they had virtually no private fleet business 10 years ago. “That shows you the strength of private fleets,” Konezny says. “Private fleets are generally much more rigorous in their decision-making process. Typically, a CFO of a company has to sign off on any major purchase, so private fleets are very accountable for the money they choose to spend while for-hire fleets tend to be a little more emotional.”

The next big thing for private fleets may be electronic onboard recorders and electronic log books. While fleets today are awash in data, the next generation of business intelligence will enable fleet managers to automatically adjust for exceptions to operations, says Konezny. But while the technology is making fleet operations a little more exciting, one major concern of private fleet managers is the increasing complexity of the trucking business. In areas such as background checks, drug testing, environmental issues, and the ever-changing hours of service regulations, private fleets are being tested in more ways than ever before. That’s why some fleet managers choose to outsource equipment and driver options to leasing companies.

“That allows us to manage it better,” adds Thomas Stedman at Walgreens. “I don’t want our fleet managers running around worrying about the price of tires. That’s not where the money is saved. It’s the number of miles and utilization of that truck is where you get the biggest bang for your buck. We hire the experts and they do it. That’s where we achieve the biggest chunk of savings.”