Managing the Financial Side of Commercial Fleets

How to Manage Your Fleet Management Company

With resources and staff increasingly dear, fleet managers are often forced to outsource. When they do, they become vendor managers as much as fleet managers. Here is how to effectively manage a fleet management company.

January 2013, by Staff

Managing a fleet of company vehicles is a complex (and rewarding) profession. It takes an unusually broad range of skills and experience, and, in today’s economy of reduced headcounts and budget cuts, it takes smart, careful choices in outsourcing.

Today, fleet management companies (FMCs) can provide services to cover any and every process or need a fleet manager has, and, when fleet managers have limited staffs (or none at all), these programs are life savers. That said, however, outsourcing now brings a new responsibility to the fleet management table: managing suppliers. Doing so can leverage the fleet manager’s effectiveness substantially.

Determining What to Outsource
Before developing strategies to manage an FMC, fleet managers need to break down the various processes in the department and determine what should — and should not — be outsourced. The ultimate goal in outsourcing should be to bring in expertise and resources the fleet manager lacks, while at the same time maintaining control.

There are two broad categories of activity in fleet management: clerical/administrative and management.

Distinguishing between the two is the first step in determining what can, and should, be outsourced. Clerical/administrative activity includes:
Communication. Not what is to be communicated, but the actual form of communication itself. This includes e-mail, company Intranet, telephone, and hard copy (“snail mail”) distribution of information.
Paper flow. Registration renewals, title transfers, payment of fines and violations, new-vehicle order placement, and any activity that involves the completion of forms or other paperwork (not necessarily paper, but including online forms, etc.).
Data capture and access. Most FMCs provide tools that capture critical cost data, which the fleet manager can access.
The aforementioned activities don’t require any specific fleet management expertise or decision making. They don’t involve how company resources are used on a day-to-day basis; they are only tools used to do so.
Management activity, on the other hand, would include:
Determining policy, such as who qualifies for a company vehicle, what
vehicles are provided (selector), and how long they remain in service.
Deciding when to repair and when to replace damaged vehicles.
● What repairs should and should not be done (i.e., setting limits on
mechanical or body repairs and authorizations).
Put simply, administrative and clerical activities encompass how things are done, and management activities are about what is to be done. Anything that involves the allocation of company resources — time, people, money — should not be outsourced (over and above an established minimum level).

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