Rermag 6715 Telematics Panel 1
Rermag 6715 Telematics Panel 1
Rermag 6715 Telematics Panel 1
Rermag 6715 Telematics Panel 1
Rermag 6715 Telematics Panel 1

Will Telematics Work for Your Rental Center?

Dec. 12, 2017
Before you buy, here are 10 questions to determine if a fleet management system will save you money.

Not sure if you’re ready for a fleet management solution? Are looking for a way to cost-justify implementing GPS trackers?  The exact amount that you’ll save is hard to pin down as it depends on the exact size of your fleet, the geographic location you serve, your management style, how you use the data it provides, the talents of your repair crews, and many other variables. This article includes a few simple questions to help you see where cost savings and extra income can be realized by using fleet tracking software.

1. How much construction equipment do you own?

Many people feel that fleet management is just for the big players, but smaller fleets may need help with this just as much, if not more, than the bigger players. For instance, if you only have four skid steer loaders in your fleet, then it’s even more important that they’re easy to find and ready to rent.

But even for bigger companies, fleet management can be a tricky piece to incorporate into day-to-day business. Many construction firms and rental houses use 50 or fewer trackers. Those trackers are used not only on their most expensive equipment or the stuff that also rents for the highest rates but also on mid-level equipment that rents more often and returns the most income.

Compare that to larger fleets that are using hundreds of trackers, shared among multiple locations, benefit from economies of scale and by sharing the data, plus the use of features such as the branch organization, geofencing and administration functions that allow managers to see, create and monitor groups of equipment.

Based on the size of your fleet, finding the right solution to fit specific needs can make all the difference. Before making a final decision on fleet management systems, consider how your fleet currently operates, how manageable it is, and what kind of data will truly help you improve your bottom line.

2.  How old is your equipment?

As a business, your goal is to extend the longevity of your assets to eke out every rental penny possible. Industry standards indicate that, in most fleets, half the equipment is five years or younger, half is five or older.

Your equipment inventory is likely your biggest investment. Think of your equipment as if they were your employees-- some young, some older, but all work hard, seldom take breaks, and need only a bit of regular TLC (routine maintenance) to generate a steady stream of income.

The right fleet management software can help by tracking the routine maintenance and sending you reminders and alerts to make sure your maintenance and repair crew are paying attention to the equipment that needs it most. By monitoring the condition of your fleet, you will keep it healthy, reduce repairs, and extend its life.

3.  How much of your fleet is rented on average?

Ideally, 72 percent of your equipment should be out on rental, 20 percent should be prepped and available in your yard, and no more than 8 percent should be in transit or needing repairs.  The last thing you want is to add “cannot find” to that list.

Few things are as frustrating as a lost sale, but a lack of preparation can easily turn a potential regular customer into additional dollars for your competitor. GPS trackers can help by allowing you to quickly locate equipment – even those in transit – and monitoring its readiness to rent.

4. Do you rent both long- and short-term?

There are cost savings for both. But, as with most things in life, success favors the prepared mind (or skid steer loader), which makes rental length considerations an important part of your fleet management strategy.

Short-terms rental involve lots of coming and going, so GPS tracking makes it easy to know if the equipment returned yesterday is ready to rent again today. Long-term rentals, on the other hand, usually mean the equipment is going to a large project, and then moving as the project progresses. This could be a logistical nightmare if you have multiple long-term rentals.  A proper fleet management software solution will allow you to track movements by creating a geofence around your customer’s

project, then setting notifications to alert you only when the equipment moves beyond those boundaries. Knowing exactly where your equipment is and when it’s on its way back can be a huge help in preparing for the next potential rental.

5. How large is you rental/service area?

Service area is a factor fleet managers can easily overlook. While you want to make sure your well of potential clientele is as large as possible, a bigger service area can present a number of challenges—each of which could add to your total costs.

Take the Midwest, for instance. In a bigger, more spread-out state like Texas, a larger service area could mean your equipment may be hours away at any time. If that equipment malfunctions onsite, you’re going to quickly rack up additional costs as you send repair teams out there. Now, imagine if that scenario occurred with multiple pieces of equipment and it’s easy to see why this is such a major consideration.

This should come into consideration when evaluating GPS trackers and fleet management software. With the proper solution, you can monitor the equipment status and, should the equipment need it, send repair crews to the precise location -- even if that’s a location far off the highway -- with the right parts and information to efficiently fix the problem.

6. Do you have multiple locations and share equipment among them?

Multiple locations sharing multiple pieces of equipment can easily lead to costly mistakes if you’re not careful. Some GPS fleet management solutions offer “branch organization” tools that allow you to assign part of your fleet to a certain branch.

7.  How accurate is your billing system?

When it comes to rentals, billing can be a tricky issue. Fortunately the data from fleet management software is a huge benefit to your billing department as it allows managers to see operations by recording engine hours. This shows exactly when equipment is operating on a calendar – with totals by day, week and month.

For instance, say your customer calls on Friday to pick up a rental and you’re unable to immediately pick it up. The customer may then use the machine over the weekend. If you’re able to track engine hours through your tracking software, you’ll know if the customer added some extra hours with the equipment and exactly when they did so, allowing you to recoup the costs.

Plus, a good fleet management solution can help keep customers honest. If they claim the machine wouldn’t work, you’ll have data to prove that it did and show exactly when and for how long. Bill for all the additional hours that would have been lost!

8.  How busy is your Repair Department?

A tracking system with an internal battery will continue to send data even if the wires are cut. Photo by SolarTrak

A piece of equipment is only as good as the repair team that keeps it up and running. Unfortunately, no matter how big or small a fleet may be, a downed machine will be sidelined for as long as it takes your repair team to get to it. If your team is already swamped with repairs as it is, that could amount to a lot of downtime and lost profits caused by broken equipment.

A fleet management system can help in three ways. For starters, your repair crew supervisor can track the rented equipment and get email or text warnings when equipment battery voltage goes down to a user-determined level. He can also see how hard the equipment is being used by checking the engine-hours reports, and can double-check if told that equipment is down by seeing whether it was operational.

Once a problem does occur, having the broken equipment’s exact coordinates makes it easy for your crew to go directly to the equipment, even if it’s parked off road. Some tracking systems allow your crew to click on Bing or Google right from the software to get driving directions.

The data from fleet management software can also help your repair department plan its week. Look for a solution that includes a “Maintenance Due” report, and have your department head review the report every Monday morning, and see what equipment is due for routine maintenance or inspections that week (based on engine hours or the number of days since last service). This will help keep your fleet in tip-top shape and ready to rent.

9.  Most importantly, how busy are you?

Do you find yourself in constant need of an extra set of hands? More importantly, how essential is it that you stay involved in basic fleet management tasks once you have brought someone else on board to help out? If so, this is another point of consideration when evaluating fleet management solutions.

A proper management system should assist you by acting as your eyes and ears, watching your fleet’s location, health, and reminding you where equipment is, if it’s operating, and when to perform oil changes and other maintenance.

More importantly, it should make it easy to share that data with others in your department as well as control the rights of each user, including if and when they get alerts and notifications. 

10.  Is equipment theft a concern?

Theft can come in many forms. While “time theft”—such as using equipment for extra time than you’ve paid for or wasting a fleet manager’s time by misplacing equipment—is a major issue for fleet managers, there’s also the obvious form of theft that involves someone taking your piece of equipment without permission.

Naturally, any GPS tracker will tell you where your equipment is, but make sure to consider a tracking system that is also equipped with an internal battery. This ensures the equipment will continue to send data even if the wires to power the tracker are cut--giving you (and the authorities) up to 72 hours to find and retrieve stolen equipment.

Because of this (and other reasons) insurance companies love GPS fleet trackers and may offer your business a discount for implementing them, further reducing your costs.

How to determine exactly how much you’ll save

You’ll want to factor in the cost of the system, then balance that against the loss of equipment, the money lost when equipment is misplaced, and the time-savings for you, the fleet manager. Then, you’ll want to measure those numbers against the cost of equipping your entire fleet with trackers (which may be priced individually or in bulk), any additional costs for software, the hardware to run the management solutions (computers, company smartphones, etc.) This should give you a clear idea of the potential value a fleet management solution may bring to the business.

As far as the cost for these solutions, prices can vary from $20 to $40 per month. Some fleet management solutions contain all the data essential to fleet management for $10 per month per tracker.

When considering the best solutions, be cautious to avoid vehicle tracking systems. These are often designed specifically for delivery services and emphasize fuel usage and driver’s behavior more than the monitoring and maintain of a rental or construction fleet.  They are also in constant contact, which is more expensive than systems designed for equipment that is located at a job site for most of the day.
 

The ultimate deciding factor

When it comes to the right fleet management solution, the most important consideration is how you feel about using it. Some offer more intuitive solutions than others. Some may be more difficult to use depending on your comfort with technology.

Because of this, it’s always best to ask for a free demo before signing anything. See exactly how the system works, and if it is designed for construction equipment. By seeing it in action, you’ll know if it will save money by finding your equipment, monitoring its health, and keeping it rentable. The real benefit may be manifest in intangible ways – less aggravation, more efficient use of time – for you and your crew—and that can sometimes be worth more than money.

Ed O’Donnell is vice president of SolarTrak.

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