What is Construction Fleet Management?
What Is Construction Fleet Management?
Digging a hole, paving a road, moving dirt, laying cement, demolishing a building—these are just a few of the myriad projects that construction professionals will handle on the job. But the creation and maintenance of residential, commercial, or industrial buildings and infrastructure isn’t conducted manually, at least, not anymore.
Many of today's large-scale projects rely on a fleet of heavy-duty vehicles and assets—pavers, excavators, tractors, bulldozers, backhoes, cranes, you name it—each vehicle within the fleet has a specific use case and serves a unique purpose in support of operations and during a construction project.
But these assets aren’t cheap to buy or fix. They need to be properly deployed and maintained. If you run a construction company, naturally you want your fleet operation and fleet maintenance processes to go smoothly. To that end, if you want to get the most value out of your capital investment, you must practice diligent construction fleet management.
Here’s what that looks like and why it matters.
Construction Fleet Management
At its essence, construction fleet management is about accountability. The goal is to ensure the proper use, condition, and maintenance of your commercial vehicles to generate the most long-term value from each one. Several concerns fall under the auspices of construction fleet management. That said, the overarching definition would be the planning, direction, and oversight of all the vehicles and assets.
What does that entail? Common fleet management roles and responsibilities include:
Vehicle Acquisition
As mentioned, the sticker tag on a construction vehicle is high. That price can range from the tens of thousands to the hundreds of thousands of dollars depending on the vehicle type, size and accessories.
Such an investment can’t be made lightly. Smart asset acquisition can significantly reduce life cycle costs.
If handled judiciously, you can expect this process to be lengthy since there are several considerations, including:
- Confirming that’s a certifiable demand for that specific vehicle
- Determining the number of vehicles you require
- Deciding whether to buy or rent
- Buying new or at auction
The financing and performance of the fleet hinge on the decisions made above. Therefore, this commitment of capital must be based solely on what’s best for the business.
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Preventative Vehicle Maintenance
The routine inspection, upkeep, and repair of your vehicles is widely considered to be one of the most essential aspects of fleet management.
As the name implies, preventative construction fleet maintenance is about addressing small issues before they can turn into much larger and more costly problems.
For that, you must create and instill a formalized action plan to verify that vehicles are in working condition and safe to operate at all times. This will include:
- Setting maintenance schedules where you frequently inspect and maintain vehicles
- Inspecting and then triaging the vehicles that need the most immediate attention
- Leveraging automated tools that set service reminders and streamline processes
- Performing daily operations checks to flag issues that might arise ahead of schedule
- Training drivers and operators to properly use, maintain, and inspect their vehicle
- Designating a fleet inspector responsible for maintenance oversight
Taking actions such as this can protect your employees, maximize vehicle performance, increase resale value, and reduce your operational costs.
Learn more about fleet maintenance tips to keep your vehicles in tip-top shape.
Fleet Expense Analysis and Management
In order to budget, set expectations, plan for the future, and operate a business, you need to know how much you’re spending. Only then will you be able to take necessary actions to reduce costs and optimize operations.
Typically, these costs will be divided into one of two categories:
- Fixed costs – These are the overhead costs that won’t change in the short term, no matter whether your fleet is deployed or in storage. This includes:
- ~Lease or purchase payments
- ~Vehicle insurance
- ~Depreciation
- ~Licenses and permits
- ~Office space
- Variable costs – These are the costs required to operate your construction vehicles. They’re subject to change according to external factors. This includes:
- ~Fuel consumption
- ~Maintenance and repairs
- ~Accidents and fines
- ~Operator salaries
The goal of fleet analysis and management is to identify opportunities for saving, particularly within the variable cost category.
For instance, fuel tends to be one of the largest fleet expenses in either category—it’s the lifeblood of construction companies since the equipment is useless without it.
According to a 2017 report, 44% of respondents said that up to half of their operational budgets were allocated to fuel alone. And that was before fuel had reached the historic highs they currently sit at.
Fortunately, there are several ways you can keep fuel costs at a minimum even as prices soar, such as:
- Integrating universal fuel cards to track vehicle-related expenses and provide fuel discounts
- Performing preventative maintenance
- Tracking vehicle mileage and reducing idle times
- Optimizing routes and dispatching
- Avoiding unnecessary weight
Keeping tabs on your fleet fuel management processes can help you strategize your budget.
Proper Fleet Deployment
Different projects require different types of construction trucks and assets. And your resources are finite, which is why the delivery of construction materials is an important step for any construction operation. Even with a large fleet with multiple vehicles, you must strategically decide where and how to deploy the assets to best support operations.
To that end, there are several fleet logistics issues you must juggle, including:
- Determining how to best transport extra large or wide vehicles to and from the site
- Timing the arrival and departure of vehicles so that they align with operational schedules and aren’t in the way, especially for sites with limited space
- Protecting vehicles and assets from theft or loss, which accounts for $300 million to $1 billion in losses for the construction industry annually
- Optimizing asset utilization
Worker Safety
Construction is an inherently dangerous industry.
A significant portion of this risk is due to the use (or improper use) of heavy machinery, particularly cranes, bulldozers, excavators, dump trucks, and backhoes. As Travelers Insurance notes: “Struck-by” deaths are one of the construction industry’s “Fatal Four” leading causes of death on the job site—of which 75% involve heavy equipment.”
Some of the more common issues that lead to injuries and/or death include:
- Operating machines without guards
- Falling materials and loads
- Getting crushed or run over
- Leaving equipment in gear without setting the brakes
- Equipment rollover
- Equipment or controls unlocked during maintenance
An integral aspect of construction management involves taking every necessary precaution to address and mitigate hazards that could threaten the health of vehicle operators or people on site.
This starts with adequate vehicle training and risk awareness. From there, you must conduct rigorous pre-planning and instill safe work practices. Finally, since lack of visibility is a significant cause of work-site accidents, having spotters in blind spots can help protect operators, workers, and civilians.
Selling and Disposing of Used Vehicles
Over time, vehicles wear down.
Even with proper preventative maintenance, construction equipment will eventually reach their usage limit. When that occurs, they’ll need to be decommissioned and then replaced.
While you could drive your vehicles into the ground, in many cases, it may be wiser to sell your used construction fleet vehicle at an auction in order to recoup some of your investment cost. Knowing when that time is right depends on the type of construction fleet vehicle, the market, and the specific machinery.
That said, oversight of the negotiation and transaction is an important way you can minimize losses to your company.
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Why Does Construction Fleet Management Matter?
The ultimate goal is to boost fleet efficiency and, in effect, operational efficiency. All it takes is a single fleet vehicle breakdown, construction site incident, or improper asset deployment to delay or completely derail a project. For construction projects faced with the mounting pressure of flexible timelines and limited budgets, such an issue could be calamitous.
For instance, let’s say you only have a single crane in your fleet.
If that were to break down at a crucial point, all your operations might come to a grinding halt until it’s either fixed or replaced, costing you both precious time and money. But, now, imagine if that were to occur during the job, resulting in bodily injury and/or property damage.
And what if that could have been prevented?
As you might imagine, the penalties could be steep. It could easily result in a liability claim or even criminal negligence suit, either of which could cause irreparable harm to your construction business’ bottom line and reputation.
Aside from potential litigation or compliance issues, there are several other benefits to construction fleet management, including:
- Improved productivity and increased workflows
- Efficient and accurate invoicing
- Optimized budgeting and forecasting
- Safer, happier, and more productive workers
- Fewer disruptions to workflows caused by delays, errors, or breakdowns
- Maximized investment in your vehicles
- Increased resale value of vehicles
- Reduced operational costs
- More satisfied clients
Streamline Your Fleet Business with AtoB
The construction industry has a high barrier to entry due to the exorbitant cost of heavy machinery.
Thriving in the industry requires that you practice diligent construction fleet management, which includes essential tasks, like acquiring vehicles, performing preventative maintenance, and conducting fleet expense management.
But even more so, you need fuel to keep your fleets and business moving in the right direction. That’s where AtoB fuel cards come into play. With exclusive discounts on fuel, payroll processing, and real-time monitoring and analysis, we offer a best-in-class platform to increase savings and efficiency for your construction fleet.
Want to see what else we can do?
With no hidden fees and the ability to pay for other non-fuel-related expenses like vehicle maintenance and lodging, our fuel cards are designed to help your construction fleet function at its best every mile of every day.
Sources:
Balboa Capital. The Cost of Construction Equipment.
https://www.balboacapital.com/blog/types-construction-vehicles/
Cratos. High Fuel Costs In The Construction Industry Have Owners Searching For Alternatives – And Finding Surprising Solutions.
National Equipment Register. 2016 Equipment Theft Report.
http://www.ner.net/wp-content/uploads/2017/10/Annual-Theft-Report-2016.pdf
Travelers Insurance. Staying Safe Around Heavy Equipment.
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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.
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