As businesses seek ways to remain viable in a difficult economic climate, rethinking the kind of fleet they use can provide an advantage. There are numerous distinctions between owning a private fleet and using a dedicated fleet for shippers. Some of these distinctions include cost, service, dependability, and the amount of time spent away from their core strengths.
In this blog, we will discuss the different types of trucking fleet, along with the differences between them, and how you can choose the one that best suits you.
What are the Different Types of Trucking Fleet?
The ability to keep up in a difficult economic climate is essential for any company, and the timeframe, money, and energy wasted on finding new ways to do so is exponential. Companies that do not use the proper fleet risk incurring higher costs, ineffective service, poor stability, and lost time. Rethinking the type of fleet your business utilizes can provide a significant advantage. Here are the different types of the fleet:
- Private Trucking Fleet
A private fleet helps companies with secured capabilities, supply chain control, and overall visibility. In short, the company has full control, as well as the capacity to brand trucks and generate income by carrying cargo for other businesses when permitted.
However, private fleets can incur additional unanticipated costs, particularly for companies that are difficult to plan for. Repair work, replacement vehicles, regulatory requirements, fuel, licencing, driver employment, training, and management are all part of the costs.
Volatility in supply and variability in consumer demands also pose difficulties for private fleet operators. To prepare for fluctuating demand, they may have to own more trucks than they currently use. When this occurs, idle vehicles can have a significant impact on the company’s bottom line because fleet managers plan their fleets based on peak periods, leaving money tied up in vehicles that aren’t always used.
Manage your fleet efficiently with LocoNav’s Fleet Management Solutions!
- Dedicated Fleet
A dedicated fleet provides businesses with all of the advantages of buying a fleet without the complexity of managing it. This option reduces their transportation costs, ensures capacity, and gives the company the visibility it requires as well as the opportunity to generate additional revenue through backhauls. Companies can also customise their trucks with a dedicated fleet, and all risks are borne by the provider.
Drivers in dedicated fleets are specifically trained for their company. Vehicle maintenance and replacement are also included. Using this option ensures a properly sized fleet, as well as the versatility to add capacity during peak hours, as well as maintenance and vehicle replacement.
Questions to Ask While Choosing the Suitable Fleet Type for Business
When thinking of switching from a private fleet to a dedicated fleet, consider the following:
- Is my fleet’s distribution requirements unique or complex?
- Is my freight requiring special vehicle specifications or handling?
- Do I need to plan multiple stops and complicated routes?
- Would streamlining my quality and lowering empty miles boost my revenue?
- Is it difficult for me to find and retain drivers?
- Is there anything else I need, such as warehouse operations, yard management, or alternative fuels?
- Is it true that I’m having trouble finding backhauls?
- Do my trucks have a lot of empty miles?
- Is it hard to adapt my drivers and vehicles as seasonal volumes change?
If you answered “ yes ” to any of these queries, a dedicated fleet may be beneficial to you. As the transportation industry faces new challenges, it may be time for your business to re-evaluate its fleet. While having a private fleet has many advantages, a dedicated transportation solution has many advantages as well.
Highlighting the Key Difference Between Private vs Dedicated Fleet –
Staffing
Private Fleet
Staffing a private transportation fleet entails hiring everyone from drivers and emergency responders to supervisors and safety inspectors. Even in the most favourable employment conditions, such a task can be daunting.
Dedicated Fleet
In the case of dedicated transportation services, your 3PL (third party logistics) provider will most likely have other operations from which to pull personnel to cover for a sick employee.
Fleet Maintenance
Private Fleet
In a private fleet, all maintenance activities need to be planned, performed, and paid for by you.
Dedicated Fleet
In a dedicated or outsourced fleet, you need not take any part in the maintenance of the vehicles.
Management Expense
Private Fleet
One of the most compelling arguments for establishing a private fleet is the perception that a company can save funds by managing its own transportation. After all, 3PLs (third-party logistics) are not non-profits, and the significant work of working a dedicated fleet will come at a high cost. However, when you consider the time and money involved in private fleets compared to the relative ‘plug and play’ model that a 3PL (third-party logistics) with the right systems can give, you may wonder where your savings will come from.
Dedicated Fleet
In contrast, with dedicated fleet service, your 3PL (third party logistics) comes to you with all of these items already baked in. The provider will analyse your volumes and service needs and offer you a single flat rate to maintain your entire operation.
Furthermore, exiting a dedicated 3PL (third party logistics) service agreement is much easier than trying to reverse your substantial private fleet spending if your volumes do not match the infrastructure you assembled.
Liabilities
Private Fleet
In a private fleet, all accident and insurance liabilities are on your plate.
Dedicated Fleet
In a dedicated fleet, the third-party provider takes care of the accident and insurance liabilities.
Deliveries TAT
Private Fleet
A private fleet is built to handle expected volumes. You can determine the turnaround times for your deliveries more accurately when you own the fleet.
Dedicated Fleet
With a dedicated fleet, you hire a third-party logistics provider to handle a specific volume and level of service. Any increase and decrease in that volume may affect your delivery turnaround times.
Scalability & Growth
Private Fleet
A private fleet is built to handle expected volumes. However, if the volumes aren’t there, downsizing can be difficult and costly. It’s also difficult and expensive to expand your fleet because you’d have to pay to add assets by yourself (which is costly and time-consuming) or hire temporary help.
Dedicated Fleet
With a dedicated fleet, you hire a third-party logistics provider to handle a specific volume and level of service. The resources are then allocated to your operation. Even if your volumes are lower than average, you must still pay for the contracted services. The key difference is that these contracts can be adjusted or renegotiated on a regular basis to account for volume or initiative changes.
What are the Challenges with –
Private Fleet
DRIVER HIRING AND RETENTION
One aspect of having a private fleet that you must consider is driver recruitment. With the driver shortage, trying to find talent behind the wheel has become an even more difficult challenge, and driver-related problems are a current top concern for private fleets.
COSTS
Many businesses want to continue operating private fleets to manage transportation costs; however, a private fleet has many additional costs. First, there are the initial capital costs, which can be costly when starting out. Fuel, insurance, driver pay and benefits, licences, certifications, permits, technology such as ELDs or software applications, training, and drug testing are all factors to consider. There are also unexpected costs to consider, such as insurance premiums for any accidents or claims.
CAPACITY
Many businesses want quick access to the capacity of a private fleet to haul their freight. However, determining the optimal number of available hardware and drivers is difficult.
TIME SPENT TRANSPORTING
One disadvantage of running your own fleet is the time commitment required. You must organise shipments, ensure that you have drivers, cover backhauling or cover shifts when you do not have enough capacity on your own, and adhere to regulations, insurance, and other requirements.
Dedicated Fleet
THE LOSS OF CONTROL
Some people dislike losing control. When you choose to outsource, you give up some control over your provider choice, customer service, and shipment rates.
VISIBILITY LOSS
This is entirely dependent on the provider you choose to work with and the services they provide. Find a reputable provider who has advanced technologies or processes in place to keep you up to date.
RELATIONSHIP MANAGEMENT
When it comes to developing good working relationships, time and effort must be put in. To give you a competitive advantage, your chosen providers must understand your strategy and provide you with creative solutions. It may take some time to get everything in order.
INTEGRATION OF TECHNOLOGY
If you decide to outsource and use a provider’s technology, your IT teams must be prepared to incorporate their apps and processes.