The Power of Benchmarking
Rising costs, labor shortages and a challenging operating environment have put immense pressure on fleets to optimize operations and increase efficiency. Benchmarking is a vital tool for companies to compare their performance and critical metrics to industry standards and similar operations to uncover opportunities for improvement and gain a competitive advantage.
Metrics To Monitor Include:
Fuel Efficiency: When even pennies per gallon add up, the cost savings from increasing fuel economy and minimizing fuel consumption become significant. Benchmarking fuel costs can help fleets determine if they’re above the industry average and then delve into contributing factors, such as driver behavior, poorly maintained vehicles or the wrong vehicle specs, and implement corrective measures.
Fleet Utilization: Fleet utilization — the extent to which trucks or trailers are being used relative to their total capacity or availability — is a key performance metric in transportation and logistics. Reviewing utilization rates can help maximize efficiency and reduce operational costs.
Maintenance Costs and Effectiveness: Effective maintenance reduces unexpected breakdowns, extends vehicle lifespan and ensures compliance with safety regulations. High maintenance costs or frequent breakdowns may indicate inefficient processes or the need for vehicle replacement. Metrics could include breakdowns per 100,000 miles and average vehicle downtime.
Cost Per Mile: Fleets’ average cost per mile includes all operating expenses, including fuel, maintenance, insurance, driver wages and overhead. The cost per mile can vary by truck or operating area. Tracking it and comparing it to industry averages or competitors can help identify trends in operational expenses, allowing fleets to dig into and correct issues that may be driving it higher. Knowing the cost per mile is also critical for setting rates.
Empty Miles: Empty miles represent lost revenue opportunities and higher operational costs due to unnecessary fuel usage and vehicle wear. Reducing empty miles improves profitability and resource utilization. Solutions can include optimizing routing and dispatching or sourcing backhauls.
Revenue Per Truck: Measuring total revenue generated by each truck over a specific period can help fleets uncover performance disparities, identify underperforming assets or operations, and determine which areas to optimize.
Driver Turnover: High turnover increases recruiting and training costs, disrupts operations, and can negatively affect customer service. Monitoring turnover helps fleets identify and address issues related to driver satisfaction.
Benchmark Effectively
Historically, the freight industry has relied on static forecasting and metrics, such as static KPI reporting and comparisons of the fleet to static industry averages. There are several valuable industry reports, including the National Private Truck Council’s Benchmarking Survey, American Trucking Association’s (ATA’s) Driver Compensation Study, and the ATA Technology & Maintenance Council’s North American Service Event Benchmark Report.
While these reports are valuable, they limit fleets’ ability to create benchmarks that are exactly matched to their operations. Fleets are inherently distinct. They operate in all kinds of conditions. They are spec'd differently, and there are different kinds of vehicles, which means it can be challenging to get an apples-to-apples comparison using reports alone.
Penske’s fleet benchmarking tool powered by Catalyst AI™ allows fleet managers to measure key performance indicators and compare their fleets to create comparisons to their own fleet over time, while creating dynamic comparisons to similar operations and equipment. It looks at comparisons across fuel efficiency and vehicle utilization.
Catalyst AI leverages artificial intelligence, advanced machine learning algorithms and Penske’s rich data set to enable fleet managers to evaluate true fleet performance, allowing them to gain accurate, real-time fleet comparisons and make decisions with greater precision and accuracy.
It processes 57 billion data points, with 200+ million new data points added to the fleet dataset daily. It also synthesizes thousands of variables into digestible key performance indicators and diagnostic metrics, helping fleets uncover the root cause of their performance. More than 300 models run simultaneously to deliver the insights and actions that help drive real change and impact