A Cost-Benefit Analysis Of Using GPS Tracking As Part Of Fleet Management

technological advances. Fleet management uses AI and IoT (internet of things) tools extensively for a variety of purposes like location tracking, crash detection, and electronic logging of records. These devices have plenty of advantages that simplify several processes that logistics companies deal with daily.

One of the primary purposes of incorporating automation in the industry is to bring down costs. By automating repetitive or mechanical work, you can eliminate several middlemen and recurring expenses, and the same goes for fleet management as well. So, what are the additional costs (if any) that you will incur when upgrading your fleet with GPS fleet tracking accessories and how will they save you money in the long run?

The Components Of A GPS Tracking System 

The fundamental components that constitute a GPS network in a vehicle are:

  • GPS tracker
  • Engine interface
  • Input/output interface (or expander port)
  • SIM card
  • Accelerometer
  • Buzzer

These devices are attached on the truck or carrier, and they continuously collect and transmit information in real-time using the SIM card through a cellular or satellite network to a central server. From the server, the interested parties (fleet managers, clients, transport authorities, etc.) can analyse the information for any necessary purpose.

GPS Tracking

In the UK, the primary GPS devices cost approximately 30 to 50 GBP, and the high-end variants cost more. Apart from the location of the truck or asset, GPS devices are capable of providing various other data that save time and money for the user(s).

Data Collection Simplified With GPS 

Some of the benefits of using GPS directly translate into monetary value in terms of savings, while others help improve the quality of service. In the latter case, the financial realisation may not be immediate, but an improvement in the overall functioning of the business will eventually lead to more customers and higher revenues.

Safe Driving 

Apart from knowing whether the driver is taking the scheduled route, managers also need to monitor how safely they drive the vehicle. GPS systems with devices like gyroscopic sensors and accelerometers can also keep track of the speed, braking, and idling time of the truck so that they can flag any instance of unsafe or inefficient driving. Another innovative idea would be to feed data regarding the speed limits and other road rules of the route that the vehicle is taking to the GPS so that it can ensure the driver follows them.

All commercial carriers should have auto insurance to secure themselves financially in the rare occurrence of accidents. A safe driving protocol is crucial for the logistics company to get the best insurance deals for the vehicles. The authorities check the driving record of the carriers and the driver, and it is important to have a clean slate.

Asset Monitoring 

Geo-fencing is the technology that uses GPS to inform the clients or the managers when the cargo enters or leaves a particular geographical location. This feature predicts the approximate ETA at the given destination, and it also has several other uses that save money for the fleet crew.

Highway robberies are not uncommon, and these incidents can be disastrous to the company if the goods are lost. With a GPS tracker, geo-fencing will send out alerts whenever the cargo moves on an unplanned route, hinting at a robbery.

On a related note, this technology also prevents misplacing of goods, particularly at transits in warehouses. By ensuring that all the products are delivered safely without being lost or stolen, the logistics company can save thousands of pounds every year.

Route Optimisation 

Between the given pickup and drop-off locations, there could be several roads that a carrier can take. Some routes may be shorter in terms of distance, some could be shorter in terms of the travel time, and others could have minimal checkpoints, and so on. By considering these different factors, the fleet managers can chart out an optimal path between the two locations, since reducing either the time or distance during travel is critical to bringing down the cost.

Sometimes, there could be unexpected delays during a trip, like an accident, roadblock, or bad weather. In such cases, the GPS device can quickly connect to the internet and suggest an alternative road to continue the journey without wasting time.

Accident Protocol 

Ideally, logistics companies would want to take all the possible measures to prevent accidents on the road. Devices like crash detectors and speed sensors help to achieve this. If an accident does occur, GPS helps the crew to take control of the situation and swiftly take the subsequent steps as follows –

  • Using the GPS location of the accident and the destination, the fleet manager can take a call as to whether another truck should continue the delivery or the same vehicle should.
  • The system can send out an alert to the other drivers of the same company and mechanics nearby, asking for help.

Thus, there is minimal time spent in communication and tracking, making the accident-handling protocol smooth.

Fuel Consumption And Taxation

As mentioned before, tachograph analysis software can detect signs of vehicle idling and inefficient use of fuel. The distance travelled is an essential aspect of calculating the amount of fuel spent and hence, the tax liability too.

However, with some additional features to the GPS, you can also calculate the distance travelled in each state or city separately. If the tax rates are different in different territories, this split-up saves you plenty of time and effort when it comes to tax auditing. An error-free taxation process keeps your company in the clear and saves you the penalties you should pay otherwise.

Short-Term Expenses, Long-Term Savings

As this cost-benefit analysis highlights, installing GPS (and other telematics) devices on your commercial carriers requires a significant initial investment, but it pays off in the long run. Customers are likely to shift to companies that offer them more accurate and effective services, which is what GPS trackers help to achieve. In this digital era, the first-mover advantage can make a lot of difference between you and your competitor.

So, contact a logistics or telematics expert and discuss how you can upgrade your fleet today!

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