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All you need to know about in-house vs outsourcing fleet management

Some industry observers believe the traditional fleet manager is now an endangered species, especially in the small business sector, as the responsibilities and focus of managing a fleet continue to shift.

In companies where fleet managers remain in place, the role has often expanded to involve a host of different disciplines, including compliance requirements and duty of care. Sometimes the role has taken on more of a strategic focus.

Elsewhere, the role has vanished altogether and fleet responsibilities have been outsourced to fleet management specialists, or subsumed into other departments, such as finance, operations or human resources.

Before looking at the pros and cons of outsourcing fleet management and maintenance, there are some important considerations which may be unique to your company. These include size and type of your business, company culture and the economic climate (during a downturn, the temptation is often to keep complete control of costs).

Outsourcing fleet management – advantages

  • Economies of scale – fleet management specialists can focus on the job at hand, which means they can negotiate lower rates and higher discounts for the purchase and/or leasing of vehicles, parts, maintenance, plus the disposal and/or remarketing of used vehicles.
  • Increased efficiency – a dedicated fleet maintenance and management company will be able to analyse fleet metrics and establish Key Performance Indicators, leading to lower operating costs, less money spent on repairs, fuel, administration and fewer hours off the road.
  • More insight – a fleet management specialist can provide a business with detailed reports about the performance of vehicles and drivers via technology such as telematics.
  • Streamlining – instead of making multiple payments with numerous expense reports, a business can simply pay one company, significantly reducing the amount of internal administrative work required to manage a fleet.
  • Benchmarking – fleet management companies can better benchmark the performance of a fleet because they are managing others. In addition, this means they can identify opportunities for improvement as well as anticipate problems and inefficiencies.
  • Driver productivity and safety – access to training programmes and technology such as telematics can lead to more efficient and safer driving techniques, as well as savings on fuel.
  • Devil in the detail – A reputable fleet management specialist should have a complete understanding of what is required from a legal point of view and best practices.

 

Outsourcing fleet management – disadvantages

  • In-house knowledge – the switch to outsourced fleet management can mean a company loses valuable in-house knowledge, skills and control. It can also place a business at the mercy of a fleet specialist with no-one internally with the experience to challenge decisions.
  • Visibility of data – fleet management companies can limit performance reporting to the bare essentials, resulting in a lack of in-depth knowledge.
  • Out of sight, out of mind – ultimately, directors are always responsible for their drivers and outsourcing increases the risk of losing corporate accountability.
  • Relationships – an in-house fleet manager is there to talk directly to drivers whenever they have questions or concerns. However, that level of relationship can rarely be achieved with outsourcing. Also, previous relationships between the in-house fleet manager and dealerships, suppliers, insurers, for instance will break down.
  • Ear to the ground – an outsourced fleet management solution can’t match a fleet manager’s connection with a company and its culture.
  • Customer care – decisions based purely on cost-cutting aren’t always the best for customers and could result in a company losing business.


The future of outsourcing

It’s also worth remembering that technology will increasingly play its part. For instance, the Uber ride-hailing service has starting to roll out its fleet management ‘UberFLEET’ app for fleet partners that have Uber driver-partners working for them.

The app has been designed to provide fleet managers with a set of tools to efficiently operate their business and overall productivity, allowing them to keep a check on their drivers’ activity and reducing downtime.

Deciding whether to outsource is a balancing act and it could be that the best solution is not to go 100% either way but to maintain an internal fleet manager to act as a liaison between a business and fleet management provider. But with so many variable variables the decision comes down to what suits individual business’ needs.

All you need to know about choosing the right telematics for your business

 

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