Road Freight Fleet Management Systems

Road freight fleet management systems generally consist of a number of telematic systems which use remote devices on both freight vehicles and trailers to control and monitor freight operations and present this data in a useable format to freight managers, either as real time data or static data. The effective use of these systems can lead to improvements in fleet efficiency and productivity via reductions in fleet mileage, operational costs and fuel consumption. In addition effective fleet management can lead to improvements in safety and a reduction in the environmental impact of freight fleets. To maximise the impact of road freight fleet management systems careful fuel management, driver training and training in the use of the freight fleet system should be seen as being essential. In a Good Practice Guide (341) issued by the Department for Transport (DfT) (2003) seven potential functions of fleet management systems were outlined. The full list is outlined below, but certain applications will suit different hauliers more depending upon the size of their fleets and the type of operations they carry out.

Data on the performance of both drivers and vehicles;
Vehicle tracking systems;
Text messaging communication;
Trailer tracking;
Paperless manifest and proof of delivery;
Traffic information and
On-board navigation systems.

The impacts on key policy objectives and on problems will differ according to the features of the fleet management system in place. The main winners of the introduction of effective road freight fleet management will be freight hauliers and those receiving and forwarding freight consignments, though there will also be benefits for other road users and residents within urban areas who will benefit from a reduction in excess lorry miles, idling, safer driving styles and better maintained vehicles.

Terminology & Technology

Data on the performance of both drivers and vehicles;
Vehicle tracking systems;
Text messaging communication
Trailer tracking;
Paperless manifest and proof of delivery;
Traffic information and
On-board navigation systems.

With over 70 companies offering freight fleet tracking systems it is impossible to outline all the possible fleet management systems on offer in the market place. However, each of fleet management system offers some combination of the following components:

a) Hardware

This is equipment that is fitted to the vehicle/trailer and into the haulier's office to collect data. The basic on-board hardware will usually include the following technology:

On-board computer - a small device that collects and stores data from the vehicle and/or reads a Global Positioning System (GPS) and controls data communications;
Fuel flow meter - this measures the amount of fuel used by the engine and provides an important input to the on-board computer, especially when better fuel management is an objective;
GPS Receiver - usually a passive device (such as a radio receiver). It reads signals from up to 12 satellites (but needs a minimum of 3) and calculates a vehicle's surface position to within 10 to 20 metres or 1 to 5 metres if differential GPS is used;
Communication Module - a sophisticated box of electronics and software. It acts as the gateway between the vehicle equipment and the communications network;
Driver Terminal/Keypad - Usually made up of a small screen and keyboard/key pad though increasing portable units are being used;
Navigation module - an in cab display that provides turn by turn instructions (graphically, verbally or both);
Trailer tracking - a dedicated unit for trailers that are self contained and include a GPS receiver, communications modules, control electronics and batteries for when the trailer isn't connected to the vehicle; and
Other equipment - driver coaching devices (to promote more economic driving), delivery note and invoice printers, bar code wands and terminals that can record customer signatures electronically for proof of delivery applications.

b) Data Transfer

This is how data collected from the vehicle/trailer is transmitted to the office. For those hauliers who wish to have real time information the most common solutions are via the mobile phone network (GSM) or SMS. Some solutions offer satellite data communications. If real time data is not required (e.g. fuel usage) then data can be downloaded when the vehicle returns to its depot using wireless or direct cable connection.

The data flow is likely to be both ways between the vehicle and the vehicle control centre. The potential flow of data to the vehicle includes the following:

Manifest - drops/addresses/route;
Manifest modifications en route;
Text messages;
Voice - operations/turn by turn navigation;
Vehicle disabling commands;
Traffic status en route;
Route recommendation and modification;
System configuration/calibration.

The potential flow of data from the vehicle to the office includes the following:

Vehicle or trailer location at calibrated intervals or upon request;
Vehicle location when entering or leaving a 'geo-fence' (virtual fence placed around a destination to inform a depot of a vehicles imminent arrival);
Vehicle location when panic alarm triggered;
Vehicle location when fridge or other alarm triggered, e.g. off route;
Confirmation of delivery specified in electronic manifest;
Proof of delivery - electronic signature;
Consignment tracking - barcode etc;
Text messages;
Driver identification;
Fuel consumption - trip/totals;
Driving style - speed/revs/idling/braking;
Timed trip data - start, stops, average speed, distance;
Door openings - time/ duration/ location;
PTO activity;
Driving hours;
Engine performance - e.g. temperatures;
Trailer identification and mileage.

c) Management Software

This is how the data collected is transformed into useful information to assist the haulier in his management of the fleet. This may take many forms, including a custom report containing key performance indicators/information, mapping and text messaging facilities or an order tracking system linked with ordering and accounting software. The key feature of the software is that it provides the haulier with all the information they require to help manage the fleet.

Why introduce freight fleet management?

The impetus for the introduction of effective fleet management systems comes, very much from hauliers and to a lesser extent their customers. The financial benefits and improvements to the operation of freight services are the key drivers. The effective use of these systems can lead to improvements in fleet efficiency and productivity via reductions in fleet mileage, operational costs and fuel consumption. Figures from the DfT (2003) suggest that the minimum saving from effective fleet management systems is in the region of 5% of overall fuel and labour costs, with 10% a more likely outcome. The sources of these savings are likely to be:

On board driver coaching & data recording of the performance of the driver and vehicles. This results in more economical and safer driving and identifies any problems with the vehicle which allows preventative maintenance as opposed to prescriptive maintenance. Taken together these can lead to reductions in fuel consumption, vehicle maintenance and insurance premiums (as accident levels are reduced).
Improved fleet utilisation, leading to reductions in vehicle kms and driver costs;
On-board navigation and traffic information - leading to reduced off-route vehicle mileage and idling in congested areas (by avoiding them); a reduction in driver costs and a reduction in delivery time so an increase in productivity (more drops).

There are also a number of benefits for customers, in the shape of improved service reliability and better co-ordination of deliveries which can lead to improvements in the whole logistics chain, particularly when systems offer live vehicle tracking, paperless manifest and proof of delivery.

Demand impacts

The introduction of effective fleet management systems has very important “side benefits” that include a reduction in fleet mileage, idling and driver performance which will lead to reductions in congestion, environmental costs and improvements to safety (better driving styles, better maintained vehicles and more suitable in-cab communication). These road freight responses are reflected in the tables below. For the average road user however, the introduction of an effective road freight fleet management system is going to have little impact upon their demand patterns and responses. It should however reduce the incidence of accidents upon the road and also the levels of congestion.

Responses and situations
Response	Reduction in road traffic	Expected in situations
		Change departure time to avoid congestion.
		Change route to avoid congestion.
		No impact.
		Possible reduced empty running due to better information for freight managers.
		Reduced cost for road freight may lead to mode switch from rail freight.
		No impact.
		No impact.

	= Weakest possible response		= Strongest possible positive response
	= Weakest possible negative response		= Strongest possible negative response
	= No response

Short and long run demand responses

The introduction of effective road freight fleet management systems will change demand for road freight, but once again will not have a significant impact upon the demand responses of the average road user.

Demand responses
Response	-	1st year	2-4 years	5 years	10+ years
	To avoid congestion
	To avoid congestion
	-
	Due to more efficient utilisation
	From rail to road freight
	Not relevant
	Not relevant

	= Weakest possible response		= Strongest possible positive response
	= Weakest possible negative response		= Strongest possible negative response
	= No response

Supply impacts

The introduction of effective road freight fleet management systems will not have any significant impact on the supply of transport facilities.

Financing requirements

The costs of introduction of road freight fleet management systems will differ depending upon what features the system has and the size of the haulier’s fleet to be ‘wired up’. Figures taken from DfT (2003) suggest that a sophisticated application made up of several pieces of on-board hardware, networked software and integration with third party software would typically cost between £1,500 and £3,000 per vehicle, with straightforward vehicle tracking systems costing around about £1,000.

Expected impact on key policy objectives

The impacts on key policy objectives will differ according to the features of the fleet management system in place. For the purposes of the tables below an assumption has been made that an intensive fleet management system has been put in place.

Contribution to objectives
Objective	Scale of contribution	Comment
		Improved fleet utilisation, navigational aids and monitoring of traffic black spots helps reduce off-route vehicle mileage, idling and time spent making deliveries. Monitoring of driving style and vehicle performance also bring major benefits.
		By reducing off-route vehicle mileage and idling.
		Reduction in off-route vehicle mileage and idling will lead to reductions in noise and air pollution.
		No impact
		Reduction in off-route vehicle mileage and an improvement in driving style will improve safety.
		The improvement in fleet efficiency is likely to stimulate growth in the overall economy.
		The financial gains due to improved fleet efficiency are very likely to outweigh implementation and operational costs.

	= Weakest possible positive contribution		= Strongest possible positive contribution
	= Weakest possible negative contribution		= Strongest possible negative contribution
	= No contribution

Expected impact on problems

Contribution to alleviation of key problems
Problem	Scale of contribution	Comment
Congestion-related delay		Improved fleet utilisation, navigational aids and monitoring of traffic black spots helps reduce off-route vehicle mileage. In turn this should benefit other road users who will experience a reduction in traffic and congestion levels. In the long-term trip generation may erode such benefits.
Congestion-related unreliability		The reduction in off-route vehicle mileage and delivery time, particularly during the am and pm peak will help improve reliability for other road users. In the long-term trip generation may erode such benefits.
Community severence		Through reduction of off-route mileage.
Visual intrusion		Through reduction of off-route mileage.
Lack of amenity		Through reduction of off-route mileage.
Global warming		Reduction empty running and idling will help reduce traffic-related CO2 emissions. In the long-term trip generation may erode such benefits.
Local air pollution		Reduction in off-route vehicle mileage and idling will help reduce emissions of NOx, particulates and other local pollutants.
Noise		Reduction in off-route vehicle mileage and idling will help reduce traffic volumes.
Reduction of green space		No impact.
Damage to environmentally sensitive sites		No impact.
Poor accessibility for those without a car and those with mobility impairments		No impact.
Disproportionate disadvantaging of particular social or geographic groups		No impact.
Number, severity and risk of accidents		Reduction in off-route vehicle mileage, better vehicle maintenance and improvement in driving style will help reduce the number of accidents and their severity.
Suppression of the potential for economic activity in the area		Increased freight transport efficiency may help generate overall economic growth.

	= Weakest possible positive contribution		= Strongest possible positive contribution
	= Weakest possible negative contribution		= Strongest possible negative contribution
	= No contribution

Expected winners and losers

The main winners of the introduction of effective road freight fleet management will be freight hauliers and those receiving and forwarding freight consignments. From a hauliers’ viewpoint there will be significant operational savings via reductions in fleet mileage, fuel consumption and labour costs. For those receiving and forwarding freight consignments there will be benefits from a more reliable service and potentially shorter delivery time. In particular there are likely to be benefits to the overall logistics chain and manufacturing process from being able to know where exactly freight consignments are, when they will be leaving a depot/plant and when they will be arriving at a depot/plant.

On a lesser scale there will be benefits for other road users and residents within urban areas who will benefit from a reduction in excess lorry miles, idling, safer driving styles and better maintained vehicles that will result from features such as on-board navigation systems, traffic information systems, driver monitoring/coaching and vehicle monitoring.

Winners (there are no losers for this instrument)
Group	Winners/Losers	Comment
Large scale freight and commercial traffic		Likely to make substantial operator cost savings and see an improvement in customer satisfaction. Although rail freight hauliers may lose some business. In the long-term trip generation may erode such benefits.
Small businesses		Likely to experience an improvement in the reliability and delivery times of freight consignments. In the long-term trip generation may erode such benefits.
High income car-users		Likely to experience an improvement in the reliability and delivery times of freight consignments. In the long-term trip generation may erode such benefits.
People with a low income		No impact
People with poor access to public transport		No impact
All existing public transport users		Bus based users may benefit from a reduction in congestion levels within urban areas. In the long-term trip generation may erode such benefits.
People living adjacent to the area targeted		No impact.
People making high value, important journeys		Will tend to benefit from a reduction in congestion levels within urban areas. In the long-term trip generation may erode such benefits.
The average car user		Will tend to benefit from a reduction in congestion levels within urban areas. In the long-term trip generation may erode such benefits.

	= Weakest possible benefit		= Strongest possible positive benefit
	= Weakest possible negative benefit		= Strongest possible negative benefit
	= Neither wins nor loses

Barriers to implementation

Scale of barriers
Barrier	Scale	Comment
Legal		There are no legal or regulatory restrictions.
Finance		Such systems can be expensive for operators, but the cost to the city is usually small.
Governance		Most schemes are implemented by freight operators themselves.
Political acceptability		Politicians and the public are rarely aware of such schemes.
Public and stakeholder acceptability		The public are rarely aware of such schemes.
Technical feasibility		Some systems are still in the developmental stage.

= Minimal barrier

= Most significant barrier

Evidence on performance

A number of case studies are reported by the manufacturers of a number of road freight fleet management systems and also by DfT (2003) itself. These refer to a range of road freight fleet systems which have widely differing features. The information is brief for the most part and as such this report has brought together a collection of case studies that amalgamates the contribution to objectives.

Case Study One - Marks and Spencer (ISOTRAK)

Marks and Spencer chose to equip its General Merchandise distribution operation and vehicle fleet with a system comprising in-cab computer equipment, a handheld terminal for the driver and a control centre. Collecting real-time information, it provides analysis of actual performance against planed and reported feedback to monitor performance against KPIs. The system was installed 3 years ago as a pilot scheme to provide environmental and customer service benefits, however it has since played such a major role in streamlining costs that it has been rolled out to over 240 vehicles. The fleet management system has resulted in a 15% reduction in vehicle mileage and an 8% improvement in fuel consumption, all of which have had a significant impact on the overall operating costs for Marks and Spencer.

Marks and Spencer put the cost savings down to the ability of the fleet management system to close the information gap in the supply chain, the one between the truck leaving the yard and coming back. It gives the fleet operator the ability to access information on the exact position, performance and status of each vehicle in the fleet regardless of fleet size or number of sites. The fleet management system also allows vehicles to be shared between different depots and re-routed away from traffic jams, to accommodate changing pick up or delivery times and immediately respond to backhaul opportunities.

Case Study Two - Sainsburys (ISOTRAK)

Sainsbury’s initially began to trial ISOTRAK at the Sainsbury’s Rotherham depot, before rolling it out to the North Fleet and East Kilbride. The ISOTRAK system comprised of in-cab computer equipment, a handheld terminal for the driver, a control centre at Sainsbury’s HQ and a hub at ISOTRAK HQ. The system collected real-time information, providing analysis of actual performance against planned and reporting feedback to monitor performance. Sainsbury’s planned to implement the system in its entire UK fleet by 2004.

Sainsbury's found a number of tangible benefits from the system which included:

improved and safer communication between transport office and driver via SMS;
real time vehicle tracking allows depots to share vehicles and dynamically re-route vehicles away from areas of congestion, or to accommodate changing pick-up or delivery times;
depots receive automatically notification when a truck is approaching with a delivery ('geofence') to help depot staff ensure space is ready; and,
the greater 'visibility of trucks has helped to improve back-loading, reduce the number of vehicles required and the number of kilometres travelled.

Case Study Three - MinorPlanet

The case studies for companies using the Minor Planet fleet management system are presented in the Table below.

Company	Business	Fleet	Key Benefits	Key Results
Forge Group	Fencing/barriers	3 vans	Fuel: Bills cut by £500 per month; Labour – cut by £1,296 per month; Environment – reduction of idling and greater fuel efficiency reduced air pollution	Saved £21,552 per year on fuel and wages.
Worldwide Mobility	Disability Aids	4 HGVs	Fuel: Bills cut by £700 per month; Mobile phones – bills cut by 10% and improved safety; Insurance premiums – 10% discount given (improved security aspects of vehicle tracking)	Saved £8,400 per year on fuel.
Admiral Signs	Signs	9 vans	Labour: Bills cut by £250 per week; Fuel – rerouting has saved £3,600 per year; Insurance – secured a premium (improved security aspects of vehicle tracking).	Saved £16,600 per year on wages and fuel.
Riggot & Co Ltd	Road markings	12 vans	Labour: Bills cut by £250 per week; Fuel – ability to re-route and on-board navigation have saved 15% on fuel costs; Quality Standards – the fleet management has helped the firm qualify for its Environmental Standard ISO 14001.	Saved £11,040 on wages and 15% on fuel.
Northumbrian Water	Transporting Bio-Solids	19 tankers & 2 ships	Fleet Utilisation: Reduced original fleet from 21 to 19 due to efficiency in route planning and scheduling; Fuel – reduction in idling; Labour – reduced overtime by increasing productivity.	Saved £350,000 on vehicle leasing and £20,000 per year on fuel and overtime.

Case Study Four - Glanbia Food Services & Pinpoint Tracker

Glanbia Food Services is a fresh and chilled food supplier based at Tamworth, Staffordshire operating 120 HGVs. They installed BT Cellnet's Pinpoint Fleet Management System, which uses TRACKER Network's Communicator technology. The system provides real time, 24 hour data on:

vehicle location;
mileage and speed;
fuel consumption;
driver hours; and,
temperature of goods in transit.

Trials established that the fleet management system could save 10% of the current fuel budget of £2 million per year by enabling drivers to be re-routed quickly and efficient, that they followed recognised routes at authorised speeds and reduced vehicle idle time. Even more important to Glanbia was the ability of the system to help them to ensure that the produce they were hauling was in perfect condition throughout the journey by monitoring the temperature of the trailer and alerting the driver if it fell outside a specified range.

Contribution to objectives
Objective	Contribution	Comment
		Improved fleet utilisation, navigational aids and monitoring of traffic black spots has helped reduce off-route vehicle mileage, idling and delivery times. Monitoring of driving style and vehicle performance also brings major benefits. In the long-term trip generation may erode such benefits.
		Reduces off-route vehicle mileage and idling. In the long-term trip generation may erode such benefits.
		Reduces off-route vehicle mileage and idling, leading to reductions in both noise and air pollution. In the long-term trip generation may erode such benefits.
		There was no discernable impact on equity and social inclusion.
		Reduction in off-route mileage and an improvement in driving style will improve safety.
		The improvement in fleet efficiency may stimulate growth in the overall economy.
		The gains in fleet efficiency are very likely to outweigh the implementation and operational costs.

	= Weakest possible positive contribution		= Strongest possible positive contribution
	= Weakest possible negative contribution		= Strongest possible negative contribution
	= No contribution

Contribution to alleviation of key problems
Objective	Scale of contribution	Comment
Congestion-related delay		Improved fleet utilisation, navigational aids and monitoring of traffic black spots has helped reduce off-route vehicle mileage. In turn this should benefit other road users who will experience a reduction in traffic and congestion levels. In the long-term trip generation may erode such benefits.
Congestion-related unreliability		The reduction in off-route vehicle mileage and delivery time, particularly during the am and pm peak will help improve reliability for other road users. In the long-term trip generation may erode such benefits.
Community severance		Through reduction of off-route mileage. In the long-term trip generation may erode such benefits.
Visual intrusion		Through reduction of off-route mileage. In the long-term trip generation may erode such benefits.
Lack of amenity		Through reduction of off-route mileage. In the long-term trip generation may erode such benefits.
Global warming		Reduction empty running and idling will help reduce traffic-related CO2 emissions. In the long-term trip generation may erode such benefits.
Local air pollution		Reduction in off-route vehicle mileage and idling will help reduce emissions of NOx, particulates and other local pollutants.
Noise		Reduction in off-route vehicle mileage and idling will help reduce traffic volumes.
Reduction of green space		No evidence given.
Damage to environmentally sensitive sites		No evidence given.
Poor accessibility for those without a car and those with mobility impairments		No impact.
Disproportionate disadvantaging of particular social or geographic groups		No impact.
Number, severity and risk of accidents		No evidence given but reduction in off-route vehicle mileage, better vehicle maintenance and improvement in driving style are likely to have reduced the number of accidents and their severity.
Suppression of the potential for economic activity in the area		No evidence given but increased freight transport efficiency may help generate overall economic growth.

	= Weakest possible positive contribution		= Strongest possible positive contribution
	= Weakest possible negative contribution		= Strongest possible negative contribution
	= No contribution

Appropriate contexts

Road freight fleet management systems are very suitable in all areas, so it is difficult to rate the suitability of the system other than to identify the areas in which it might have more impact.

Appropriate area-types
Area type	Suitability
City centre
Dense inner suburb
Medium density outer suburb
Less dense outer suburb
District centre
Corridor
Small town
Tourist town

= Least suitable area type

= Most suitable area type

Adverse side-effects

Reduced cost for road hauliers may in the long-term encourage further mode shift to road from rail. It may also encourage an increase in overall number and length of freight journeys.

References

Department for Transport (2003) "Telematics Guide". Good Practice Guide 341.