Private fleets have long been a topic of conversation for those in the logistics industry. Some feel that the upfront cost of maintaining a dedicated fleet with increased liability makes it seem unattractive. But increasingly, many companies are moving to a private fleet model, as they feel the long-term benefits far outweigh – and ultimately re-pay – the initial and ongoing costs of ownership.
The top 3 most rewarding aspects of operating a private fleet include:
• Improved customer service – you have ultimate control over customer experiences and can provide proactive communication
• Cost control through enhanced vehicle monitoring & driver efficiency – less miles, less fuel
• On-demand service notifications and change management – respond and communicate in real time with those in the field
By implementing tools such as vehicle routing software and GPS tracking designed around your business objectives, logistics managers can ensure that they have full monitoring of where the fleet is at any given time. Per a recent study cited by the Commercial Carrier Journal, it was found that approximately two out of every three carriers and private fleets are utilizing this technology. In using a private fleet, logistics managers are able to ensure less variance between the quality and services offered across their business, keeping customer satisfaction high. This has huge competitive advantages in an industry differentiated by customer service.
Private fleets can also enable owners to segment priority customers – keeping their delivery patterns static, while setting up other deliveries based upon least mileage and lowest cost. This keeps a healthy balance between cost savings and customer satisfaction.
Keeping a talented pool of drivers is always a challenge for those delivering goods or providing services. However, private fleets have an advantage here – Tom Moore, Sr. Vice President, of the National Private Truck Council was quoted in the Journal of Commerce saying the “turnover rate on some private fleets is 11 percent, compared to almost 100 percent for for-hire trucking companies.” This means that drivers can more consistently build a rapport with their clients. Frequently, familiarity like this can provide better feedback, resulting in even greater client satisfaction. This also fosters knowledge of routes and customers, less room for mistakes, and happier customers over all.
The decision to have a private or for-hire fleet varies by company and specific objectives, and there are pros and cons in both scenarios. But today, the customer has more power and greater needs for communication. The private fleet model aligns to the customer while putting control at the company level to manage costs and balance the two.