Private fleets are an increasingly critical piece of a complex transportation puzzle for shippers. Although they’re capital-intensive premium resources, private fleets wield outsized influence because of the unmatched utility they offer to an industry weighed down by chronic capacity shortages. With so much invested in equipment and the highest driver compensation in the industry, what can shippers do to ensure optimal utilization of private fleet resources?National Private Truck Council CEO Gary Petty’s recent op-ed piece in Transport Topics, “Benchmarking Private Fleet Success” (registration required) explains what fleet managers should look at when measuring the results of using a private fleet. While everything he said was accurate, he neglected to discuss how best to capture the data needed for metrics and benchmarking and measure it against other modes.
Petty says there are three key benchmarks to weigh; Upper Management Support; a Strategically Targeted Business Model; and Tactical Execution. What follows is a synopsis of each of Petty’s three benchmarks appended with Supply Chain Collaborator’s (SCC) input on how technology can be leveraged to ensure success.
Upper Management Support
Petty says, “Today’s private fleet professional must stay attuned to management shifts and expectations, and make it a priority to constantly communicate the rising value of the corporate investment in the private fleet.”
SCC says, “Having access to the data is critical. Being able to show which mode is best to move freight on any given lane or with any given constraint is key to making a data-driven argument. Yet, fleet management tools alone don’t permit comparisons between results yielded by moving freight via private fleet versus other modes. A world-class TMS with robust private fleet management functionality captures all the relevant data and can provide the illustrative comparisons between private fleet, common carrier, dedicated carrier, rail etc. Without this ability, decisions on resource allocation are not as clear to upper management as they could be.
Strategically Targeted Business Model
Petty says, “The business model of a private fleet is best understood as one component in a matrix of other transportation solutions. When the percentage [of movement by mode] is correctly balanced — seasonally adjusted and constantly fine-tuned to best fit changing company needs and customer expectations — the fleet has a sustainable business model.”
SCC says, “Balancing private fleet capacity with the shipping organization’s business objectives as Petty recommends is difficult in the absence of a technology that provides an overview all available resources. Very few TMS platforms (and no fleet management tools) provide seamless management and optimization of common carriers as well as private fleets. Those that do however, are invaluable to transportation managers because they deliver the ability to optimize fleet equipment and driver utilization while also ensuring all shipments are being moved in the most efficient manner possible. Mode selection is only an effective feature of a TMS if all modes are included in the decision logic. Feeding data from a discrete fleet management tool into a TMS is unwieldy and time consuming, especially when it comes to modeling ‘what-if’ scenarios.”
Petty says, “Every day on every run, successful private fleets rate and justify their existence. They use NPTC national benchmarking data and internal metrics to score their fleets’ comparative performance.”
SCC says, “In order to access the program data in areas Petty mentions such as empty miles, driver turnover, miles per gallon, driver pay and inbound/outbound ratios, planners need a tool that captures this data. Any fleet management technology should be able to provide this. But to truly get the most of a diversified transportation program, planners need access to this data as it pertains to other modes beyond private fleet.
SCC recommends engaging a TMS offering robust private fleet management capabilities built in. In so doing, not only will a shipper be able to optimize the private fleet, but all of their transportation spend.