Private Fleets 101: Everything You Need to Know
Whether you’re a mid-sized company or a vast enterprise, a private fleet can be an excellent option for managing your shipping and transportation needs 1.
But what is a private fleet—and what sort of advantages do they offer a company, its employees, and their clients and consumers? Is shifting to in-house vehicle operations with a private fleet a viable route for your business?
If you’re asking yourself these questions, you’re in the right place. Read on as we walk you through everything you need to know about private fleets.
What is a Private Fleet?
Private fleets are a cluster of vehicles used by a company for transportation purposes, whether that’s delivering online orders to private residences or shipping bulk items from a business’ warehouse to a big box store.
They’re also more prevalent than you might imagine, accounting for an estimated 53.3% of all carriers (according to the ATA) 2. Pepsi Co. Inc., Sysco, Walmart, Tyson Foods—these recognizable brands are just a few examples of companies that utilize in-house, private fleets to handle their freighting needs and shipping logistics.
But you don’t need to be astronomically successful or known around the world to be a private fleet operator. In fact, the U.S. Department of Transportation (DOT) reports that 97% of private fleets on file are comprised of 20 or fewer trucks.
This means a private fleet runs the gamut:
- A fleet can be five vehicles used by a local florist, or
- Five hundred vehicles used by a national grocer
What they all have in common, though, is that they’re owned (or leased), employed, and managed privately; they all use their own or temporary drivers; and they all operate in a field outside of transportation 3.
To phrase it differently, that Whole Foods driver you wave to en route is employed by Whole Foods, and the deliveries in their truck are specifically Whole Foods goods. In this way, private fleets tighten their fleet operations (and this is just one of their benefits of fleet management).
Are Private Fleets the Same as Dedicated Fleets?
In a word: no. The dedicated fleet meaning bears some similarity to private fleets but is a distinct niche 4.
With a dedicated fleet, a company is contractually served by a team of drivers (and their vehicles and other equipment), but the company doesn’t own them. A dedicated fleet reduces the burden of purchasing and maintaining a private fleet and affords businesses greater flexibility.
For instance, they can ramp up their use of drivers and shippers during peak periods, and cut down during lulls—all while reaping the benefits of having branded vehicles.
What are the Benefits of a Private Fleet?
Private fleets provide businesses with the capacity to handle transportation and shipping matters entirely on their own and hire their own staff. A dedicated team of fleet managers and drivers may offer a smoother ride (literally and figuratively) from point A to point B.
This doesn’t eliminate hiccups and exasperation entirely, but it does minimize the errors and frustration that may arise from working with a third-party trucking company—the very nature of which can lead to miscommunication.
To be more precise, the benefits of a private fleet include the following:
Enhanced Reputation and Prestige
Goods that are delivered by a company’s vehicle from its private trucking fleet, complete with the company’s logo on the side and a uniformed driver, can naturally boost a business’s reputation and prestige—it looks professional because it is professional. Peered at in this light, a private fleet can help a company:
- Establish authority
- Build trust with their consumers and the general public
- Cultivate corporate pride 5
- Gain visibility and brand recognition (in essence, advertising on the road)
Enriched Control and Reliability
Working with a for-hire carrier adds an extra layer of communication and complexity to the whole transportation journey. Private fleets enable a business to handle things internally, which may translate to:
- Fewer mistakes
- Less friction
- Better overall results
Furthermore, it grants companies visibility into the supply chain, mitigating loss and shady, ignoble transactions that could compromise their reputation.
Improved Customer Service
Private fleets further offer businesses the ability to provide stronger, more reliable, and faster customer service.
If a customer calls with a question about a delivery, a company won’t need to track down the truck driver and/or the third-party company that employs them to check in on the shipment’s status. A fleet management system can provide them with the answers they need, often in a fraction of the time.
Increased Efficiency
Whether it’s filling a vehicle to capacity or ensuring the driver uses a fuel card that does double duty, companies have the power to maximize efficiency throughout operations. For instance, if allowed, a company can ship goods for multiple businesses at the same time, which can add revenue and benefit environmental sustainability.
Improved Cost-effectiveness
When a business has its own fleet, they have the liberty to choose which equipment is used—and when.
For example, if a company has a last-minute, middle-of-the-night delivery to make in a city, they can use a smaller truck with a liftgate and a roll-up door rather than taking a larger, only partially-filled vehicle on the road. Ultimately, this can help a business decrease operation costs, while also giving them the ability to follow their own schedule instead of relying on an outside source.
In addition, with a private fleet, there are fewer wasted or “empty” miles. This, too, can contribute to a business’s bottom line.
Better Safety
It’s estimated that private fleets are up to three times safer than for-hire carriers and other entities in the trucking industry. Part of this comes down to the fleet safety solutions and technologies private fleets have the freedom to explore and implement.
…and What are the Drawbacks of a Private Fleet?
A private fleet can offer a company enhanced control over its business operations, but it also arrives with a great deal of fiscal and logistical responsibilities, such as:
- Purchasing and maintaining the vehicles (learn more about fleet maintenance tips)
- Ensuring the vehicles are up-to-code (e.g., registering them annually)
- Implementing scheduling and routing technologies
- Complying with all federal and state regulations (check out our DOT compliance checklist)
- Recruiting, onboarding, training, compensating, and managing drivers
- Ensuring a reliable, well-padded staff
- Dealing with driver shortages, which continue to increase
- Purchasing fuel (discover more ways to reduce fleet expenses)
Additionally, fluctuations in supply and demand can be costly to a company. When there’s a dearth of business, idle, unused vehicles—which still need to be maintained and insured—can cut into the bottom line.
Moreover, managing a private fleet can divert a company’s attention away from more pressing work at hand, like managing the logistics of their actual business. This may lead to increased operating costs.
Sound daunting? This is where fleet management proves to be a crucial component of creating, maintaining, and succeeding with a private fleet.
{{CTA}}
What is Private Fleet Management?
Fleet management is the behind-the-scenes business platform used for maintaining and operating a fleet—generally, a group of five or more vehicles 6.
This software platform can help a company handle its fleet in a variety of ways, including:
- Ensuring the fleet is in compliance with government regulations
- Confirming delivery and pick-up times
- Managing and maximizing route optimization through navigation software
- Redirecting drivers when needed
- Providing driver safety and support
- Overseeing driver performance and spending (especially to prevent fuel card fraud)
- Ensuring any expenditures remain within budget
Employed by companies ranging from construction outfits to restaurants, private fleet management can behoove a wide range of industries, helping individual businesses stay on schedule, support and retain their drivers, and increase profits.
When Should a Business Opt for a Private Fleet?
Private fleets offer a number of benefits, but only a company can determine whether or not a private fleet is the right choice for their business in particular.
A private fleet may be ideal if:
- It fits within your budget—both the cost of obtaining the assets you need for your fleet, as well as the cost of maintaining it
- It aligns with your company’s growth objectives
- Your business can withstand economic swings
- You’re able to assume the risks, liabilities, and regulations innate to transportation
Whether you should transition to a private fleet really comes down to your business needs. Is it appropriate for your business’s size? Your company’s culture? Your preferences? Do the benefits of a private fleet outweigh the cost of creating, implementing, and maintaining one?
Whatever your answers may be to these questions, remember that there are several ways to render your shift to a private fleet more advantageous. These include:
- Using fuel cards that offer discounts every time one of your drivers stops at a gas station
- Opting for smaller vehicles to handle minimal deliveries
- Employing top-of-the-line fleet management software
Fuel cards can be beneficial for businesses of all sizes. Small businesses with local fleets can opt and larger businesses using interstate fleets can enjoy many fleet card benefits.
Power Up Your Private Fleet with AtoB
From increased brand recognition to enhanced control and efficiency, the benefits of utilizing a private fleet are numerous. Deemed the wave of the future, they help minimize supply chain complications and grant companies greater freedom and autonomy. While they may not be right for all companies, they can curb the concerns and headaches that come with working with an outside party while offering you the chance to amplify operations.
Whatever route you choose for your company, AtoB can help optimize your fuel management even further. We provide cost-cutting solutions your fleet needs to flourish, from Card Unlock security and telematics to highly competitive discounts. What’s more, we have a super-friendly, highly-competent support team on call to handle any concerns and answer any questions you may have along the way.
Explore the benefits of AtoB today—and get on the road with nothing less than supreme confidence.
Sources:
1 Coyote Logistics. What is private fleet trucking? How shippers use private & dedicated fleets.
https://resources.coyote.com/source/private-vs-dedicated-fleet
2 Transervice. Outsourcing options for the private fleet.
https://www.transervice.com/outsourcing-options-for-the-private-fleet/
3 TransForce. What is private fleet trucking?
4 PLS Logistic Services. Your guide to private and dedicated fleets.
https://www.plslogistics.com/blog/your-guide-to-private-and-dedicated-fleets/
5 Logistics Management. Transportation best practices/trends: advantage private fleets.
https://www.logisticsmgmt.com/article/transportation_best_practices_trends_advantage_private_fleets
6 Forbes. What is fleet management? Everything you need to know.
https://www.forbes.com/advisor/business/what-is-fleet-management/
Get started with AtoB
Reviewed by
Vedant Khamesra is the driving force behind product management at AtoB. Specializing in strategic partnerships, SMB solutions, and new product development, Vedant seamlessly navigates P&L responsibilities while leading product execution and strategy. He is fueled by AtoB's mission to empower truckers and fleets with intelligent financial tools and services, making their lives easier and more rewarding.
Start saving today
