Greg Nichols reports on how fleet operators can boost the bottom line by managing driver behavior
In the quest for greater fuel efficiency and lower maintenance, repair, and replacement costs, fleet operators often focus on optimizing vehicles and routes. But driver behavior, studies show, impacts both fuel economy and vehicle repair and maintenance to a tremendous degree.
Fleet operators are now finding that intelligently implemented driver policies aimed at reducing poor driving behavior can increase road safety and bring substantial savings, which benefit the bottom line.
Jeff Pursell, vice president of telematics and strategic development at Donlen, a fleet management company, is part of a growing cadre within the industry focusing on the potential savings associated with driving behavior.
“We can literally plug a device into a vehicle, and plug one into a second vehicle, let the drivers go drive for a month, and we can tell them, based on comparison, which driver has better MPG, just looking at raw behavior,” says Pursell. (For more on driver behavior, see New telematics tech for fleet and asset management.)
At Donlen, Pursell and colleagues have spent the last few years developing parameters to quantify these behaviors. Their research shows how drivers—even those with impeccable safety records—are being wasteful.
“We break it down into four critical behaviors,” says Pursell: acceleration, deceleration, over speed, and idle. While these may seem like obvious indicators, the savings are unexpected.
“If you take a fleet that has done no training, has paid no attention to driving behavior, you can typically see anywhere from a 10% to 20% decrease in fuel costs by putting in some kind of driving behavior program and actually monitoring your drivers,” says Pursell.
That number starts to make sense when you look at the waste associated with inefficient driving behaviors. Speeding, for example, has a huge impact on fuel economy. On average, operators can expect a vehicle to lose 7% of its fuel economy for every five miles per hour exceeding 65 MPH.
And the potential for savings doesn’t stop there. “We’ve seen customers reduce accidents by as much as 25-30%,” says Pursell. That translates into huge cost reductions related to vehicle repair and maintenance. (For more on fleets, see The future of fleet telematics, part I and The future of fleet telematics, part II.)
Establishing a policy
The question is, What can fleet operators do with this knowledge?
“You have to establish a policy,” advises Pursell. “The policy can be informal, it doesn’t have to be written.” Companies that have established policies, and have combined those policies with effective monitoring and driving feedback mechanisms, have seen huge dividends.
Molex Incorporated, a leading supplier of cable components and connectors, has a fleet of 300 vehicles and does about 14,000 fuel transactions each year. In an effort to cut soaring costs associated with rising fuel prices, Molex partnered with Donlen to come up with a strategy that included fuel expenditure monitoring.
Donlen used a centralized billing system and analyzed the fuel spend patterns for each driver monthly. It then informed drivers, via individualized emails, of things like below average fuel economy and fuel purchases that exceeded the vehicle’s tank capacity. By combining monitoring with direct driver feedback, drivers started to understand the consequences of their inefficient driving behaviors.
Aware that they were being held accountable, they also became more conscientious on the road and at the pump. “So [drivers] improve their driving behavior,” Pursell observes. “They stop doing the rapid acceleration, rapid deceleration. They’re no longer tailgating drivers on the highway. They’re using the momentum of the vehicle. They’ve become safer drivers.”
Six months after implementing the program for Molex, Donlen found that the company was saving, on average, $141 per vehicle in fuel costs alone. (For other growth areas in fleet telematics, see Fleet telematics: Where the growth is, part I and Fleet telematics: Where the growth is, part II.)
The psychological effect of monitoring
The psychological effect of monitoring can’t be overstated. Donlen worked with Multiband Corporation, a DIRECTV home service provider, to install DriverPoint™ telematics devices in a portion of the company’s vehicles. While drivers typically plug the DriverPoint™ devices into the vehicles themselves, Multiband head Carl Roth instructed his regional managers to install the devices instead.
As an experiment, and to gain a baseline for effective benchmarking, a third of the drivers were told about the monitoring while two-thirds were not. After a few months, the difference in driving behavior between the two groups was astonishing.
Those who knew they were being monitored drove more safely. Roth decided to expand the DriverPoint™ program. After eight months, accident rates at Multiband decreased by 16% and complaints to the company’s Driver’s Alert number fell by 30%.
Fleet operators interested in capitalizing on these kinds of savings should be looking to combine robust monitoring and feedback systems, such as those that employ in-vehicle telematics devices and driver report cards, with clear driver policies and proven training programs. “Once you start combining all that,” says Pursell, “you can really take the cost savings to a whole new level.”
Greg Nichols is a regular contributor to TU.
For more on fleets, see Special report: Fleet telematics.
For the latest on fleets, visit Telematics for Fleet Management USA 2012 on November 13-14 in Atlanta.
For all the latest telematics trends, check out Telematics Japan 2012 on October 9-11 in Tokyo, Telematics Munich 2012 on October 29-30, and Content and Apps for Automotive USA 2012 on December 4-5 in San Diego.
For exclusive telematics business analysis and insight, check out TU’s reports: In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.