Building a successful and efficient fleet is no easy task. Tracking equipment, managing drivers, analyzing costs, ensuring regulatory compliance, and providing top-notch customer service are essential daily activities. But how do you know if you are moving in the right direction? Fleet management metrics and fleet utilization metrics provide the data you need to monitor your fleet’s overall success and financial stability, and help inform decisions as you grow your business.
This article presents metrics and KPIs to measure your fleet’s efficiency in terms of costs, maintenance and repairs, equipment management, safety, workforce, and customer satisfaction.
Utilization & Costs
- Revenue per truck and mile
Having a clear picture of revenue per month is the foundation to understanding your fleet’s efficiency. This can be calculated as revenue per mile or revenue per truck, although per truck is generally more telling as it incorporates time the truck isn’t generating revenue, including empty miles and downtime.
- Revenue per truck = total monthly revenue / number of trucks
- Revenue per mile = total monthly revenue / miles driven
- Cost per truck and mile
Cost metrics are critical to efficiency measures as well, and should be tracked closely. Note there are two key metrics here, which typically serve different purposes.
- Cost per truck is used to calculate how efficiently expenses are being managed over your entire operation.
Cost per truck = total monthly expenses / number of trucks
- Cost per mile is used to calculate profit margins on each load and can work to inform bids on future loads.
Cost per mile = total monthly expenses / miles driven
- Fuel economy
Fuel is one of the largest ongoing expenses for any fleet and is estimated to make up 24% of total operational costs. With that in mind, it is imperative to carefully monitor and track fuel economy across your fleet. Solid tracking can help identify potential issues with individual vehicle performance or driver behaviors that are increasing fuel usage, and allow you to take corrective steps to address those issues.
Tracking and logging fuel expenses across a fleet can be tedious if done manually or if you are relying on drivers to supply data and receipts. Enrolling in Triumph’s fuel program can simplify expense tracking and help you save money with fuel discounts at over 2,400 locations.
In addition, there are now several apps that can help give greater insight into your fuel use and expenses, and help simplify IFTA tax payments. Check to see if your ELD provider has this functionality. It’s especially helpful during interstate hauls.
- Yield
Measuring total revenue and costs provides a general overview of your fleet’s financial health, but it does little to inform if your existing network is being fully optimized. That is, if you are maximizing revenue while minimizing costs for each load movement. Yield is a compound metric that estimates network-based margin per load per day based on:
- Revenue
- Costs (variable and direct)
- Efficiency (time or velocity)
- Margin per shipment
- Value to network
While there is no set calculation for measuring yield, implementing a strategy that takes these factors into consideration can help you identify underperforming lanes or customers and understand imbalances within your network as a whole.
- Vehicle and trailer utilization rates
Fleet utilization rate is the difference between total fleet mileage capacity and the actual mileage covered over a period of time. It reflects your fleet’s capacity potential vs actual utilization. The vehicle utilization formula requires several simple calculations:
- Average miles per driver = total fleet miles driven / number of drivers
- Total mileage capacity = number of fleet vehicles * average miles per driver
- Vehicle utilization rate = total fleet miles driven / total mileage capacity
While 100% utilization is impossible, identifying excess capacity can help you make informed decisions around your business by reallocating vehicles or potentially selling underused assets to cut operational costs.
- Percent of truckload capacity utilized
LTL fleets should also monitor truckload capacity utilized, as every trailer with empty space is a lost revenue opportunity. This metric represents the amount of growth potential that exists through available capacity. It can be calculated using either gross weight or cubic volume.
- Truckload capacity utilized = used trailer capacity / total trailer carrying capacity
- Detention & dwell time
Hours of service spent on the loading and unloading process have significant impacts on productivity and profits. In fact, it is estimated that nearly 50% of pickups and deliveries result in detention that exceeds two hours. With that in mind, tracking detention times to account for lost productivity can provide insight into a fleet’s shipper and receiver network and assist in contract negotiations and route planning.
Tip: Make sure you know a broker’s detention pay and terms so you can add that average into your calculations.
- Empty miles & deadhead
Empty miles, or deadhead, are an undesirable but inevitable reality for most fleets. They use up valuable resources, like driver time and fuel, but they do not generate any direct revenue. Tracking and evaluating empty miles can provide insight into which trucks or routes are causing these miles and allow fleets to optimize route planning and resource allocation. This metric should compare empty miles driven to total miles driven both fleet-wide and by individual vehicle or driver.
Maintenance and Repair Costs
- Inspection results
Daily Vehicle Inspection Reports (DVIR) are mandatory to keep fleets compliant and bring attention to immediate issues, but can also be valuable to understanding the overall health of your assets. Compiling consistent data on DVIRs provides insights into common defects across your fleet and can help you proactively prepare for upcoming maintenance or repair costs by alerting you in advance.
- Preventive maintenance
Consistently tracking odometer readings and implementing a preventative maintenance schedule ensures regular, timely maintenance across all of your assets. Sticking to this schedule can lengthen the lifespan of your equipment, save on repair costs, and increase your overall ROI.
- Diagnostic trouble codes
Despite regular DVIRs and preventative maintenance, issues with equipment are bound to happen. Tracking diagnostic trouble codes (DTC) from your assets over time allows you to see the most common faults across your fleet and identify vehicles with the most fault occurrences. Monitoring these can help you plan better maintenance and determine replacement strategies for vehicles with recurring repair costs.
- Repair Turnover
Preventing downtime and keeping trucks on the road is important for any successful fleet. Trucks that are stuck in the shop for days result in lost profits, in addition to the costly repair bills. Monitoring the time your assets are out of commission during repairs provides insight into shops or technicians may be underperforming and helps you identify where to consider new service providers.
- Parts, inventory, and technician productivity
Fleets that are managing maintenance in-house should monitor efficiencies in their maintenance department as well. Keeping tabs on your parts inventory helps avoid costly stockouts and delays, and can reduce unnecessary inventory costs. Tracking technician productivity is also important, as it directly impacts your assets’ downtime during maintenance and repairs. Technician efficiency means quickly getting your trucks back on the road and generating revenue.
Equipment Management & Investment
- Equipment audits
Regular audits of your fleet’s equipment provides more information than is obtained through routine inspections. Knowing an asset’s factory specs and logging any modifications or aftermarket devices can ensure that your equipment is up-to-date and identify any equipment that no longer fits your efficiency standards.
- Total cost of ownership
Total cost of ownership (TCO) is the all-inclusive cost of your fleet from the purchase price to maintenance and operational expenses. TCO can drive decision-making for budgeting, planning, as well as equipment procurement through purchases or leasing.
While there is no established formula for calculating TCO, there are several standard costs that should be included in the equation:
- Driver wages & benefits
- Equipment lease or purchase payments
- Fuel
- Repair & maintenance
- Equipment insurance premiums
- Tires
- Permits & licenses
- Tolls
- Vehicle replacement
Replacing vehicles and other assets is a daunting but necessary part of fleet management. Vehicles that remain in operation for extended lengths of time often decline in performance while increasing operating costs due to things like excessive fuel consumption and more frequent repairs. Tracking metrics like odometer readings, service history, and TCO can help you determine when vehicles should be replaced.
When the time comes to replace equipment, choosing a trusted financing partner is critical. You should have a forecast of where you expect to grow, and how much you will need to invest in trucks and equipment to reach those goals.
Safety & Compliance
- Hours of service/HOS
Tracking drivers’ hours of service is necessary for regulatory compliance, but should also be considered for revenue purposes. Keep in mind, drivers taken off the road for violations equate to lost income and profits for a fleet. Fortunately, mandated ELD implementation has made tracking and monitoring HOS much simpler for drivers and fleet managers.
- Accidents and safety
Safety is paramount to fleet efficiency, as violations and accidents have a huge impact on profitability. A 2005 FMCSA report estimated that the average cost of a truck accident was $91,000 and accidents with injuries was $200,000 – adjusted for inflation, this increases to $132,000 and $291,500, respectively.
Safety metrics to consider for monitoring your fleet include speeding, harsh acceleration and braking, corner handling, and accidents. The sum of these occurrences can be used to calculate a general safety score and should be measured at both a fleet-wide level and by individual drivers.
- Incidents per mile = total miles driven / number of critical events
- GPS and telematics
Telematics devices provide data on mileage and equipment diagnostics that are critical for maintenance purposes, but they also help monitor driver behavior and identify unsafe practices. Using a combination of GPS technology, sensors, and on-board diagnostic codes, telematics systems can alert fleet managers to occurrences like speeding or harsh braking and identify where there is need for improvement with specific drivers or across the fleet. This information helps keep vehicles, drivers, and your finances safer.
Workforce
- Driver assignments & productivity
Driver management is an important component of an efficient fleet. Tracking miles is essential for safety and compliance purposes, but can also be used to calculate driver productivity by identifying out-of-route miles. This information can help you better manage scheduling, driver assignments, and routing.
The calculation is simple, but don’t forget to pad the miles in your ideal route to account for extra miles that inevitably arise during stops for fuel, scale tickets, etc.
- Driver productivity = ideal route miles / total miles driven
- Employee satisfaction
Measuring employee and driver satisfaction is critical for maintaining a healthy and productive workforce, particularly in today’s competitive job market. Conducting regular satisfaction and engagement surveys can help you make improvements to workplace conditions and alert you to a decline in overall morale, allowing you to address employee concerns before they lead to underperformance issues or resignations. Happier employees are generally more productive, increasing overall profitability.
Customer Experience
- Customer retention
An important metric for understanding customer satisfaction and loyalty is retention. You should track this over one year at a minimum, but data over longer periods of time can provide even more insight into your fleet’s success in meeting customer needs.
In order to calculate your retention rate you will need to determine the number of customers at the end of a period (CE), new customers acquired in the same period (CN), and customers at the start of the period (CS).
- Retention rate = ((CE-CN) / CS) * 100
- Customer revenue growth
Fleets should also track year-over-year growth in revenue by individual customers in order to track trends and identify lost revenue. Customers with larger declines should be followed up with to see if declines are a result of fleet performance or a shift in their demand, and to explore if there are opportunities for new business partnerships. Consider discussing new routes or cross-selling warehousing and other services.
- Damage claims
Claims are another unfortunate reality for trucking fleets and should be considered a metric for both finances and customer service. Tracking claim amounts against total revenue can help you identify pain points and provide a starting point for conversations with customers regarding packing or loading practices. Taking proactive steps to address damage claims can have a major impact on future profits.
Fleet Efficiency Metrics – What Matters for Your Fleet
While there are numerous metrics that provide insight into a fleet’s efficiency and identify areas of improvement, it is important to develop a system that is manageable and useful for your specific needs. While generally you should include a KPI within each category – costs, maintenance and repairs, equipment management, safety, workforce, and customer satisfaction – metrics and frequency of reporting may vary within your organization. For more information check out Triumph’s articles on Technology in Fleet Utilization Metrics and Fuel Efficiency for Smaller Fleets.