Fleet deployment and operation costs are on the rise with necessities like fuel, driver salaries, and insurance reaching unprecedented levels in many regions. Vehicle maintenance and management are experiencing similar price surges as material availability fluctuates and the demand for skilled labor increases.

Traditional solutions have become less effective than they once were — digitalization is the only apparent alternative for modern construction companies. Industry leaders should consider fleet connectivity for its unparalleled profitability and uncommon ability to help businesses break into highly competitive markets.

Why Fleet Managers Must Embrace Connectivity

According to the American Transportation Research Institute, the cost of trucking increased by around 21.3% from 2021 to 2022. If companies want to remain competitive, they must understand the difference between digitalization and connectivity — and why the latter is superior.

Overreliance on Manual Methods

Despite the abundance of technological innovations in the construction industry, a widespread overreliance on manual methods persists. Many small- and medium-sized companies prefer a pen-and-paper system over driver scheduling and route planning software. However, while physical timetables and maps may be helpful, they’ve become outdated.

While manual tools limit visibility and delay communication, stunting business growth, many hesitate to digitalize — and they pay the price. In fact, 42% of operations leaders admit they don’t have a centralized view of their assets, finances, and drivers, with about 33.3% reporting that they lack the visibility needed to do their jobs effectively.

Disparate Systems Drain Resources

Manual methods inadvertently produce an excessive number of disparate systems, draining more resources and funds than are available. A lack of comprehensive visibility into asset condition, driver behavior, and resource usage is ultimately more costly than embracing fleet connectivity, especially considering that operating even a small fleet has grown expensive.

Excessive idling is an excellent example of this phenomenon because it costs approximately $12,000 per fleet truck each year, with every 10% of idle time resulting in a 1% fuel economy decline. A connected vehicle would alert managers in real time, enabling them to change the drivers’ behavior and minimize losses.

Digitalization Isn’t Competitive Enough

Standard digitalization — using software, digital spreadsheets, or internet-connected devices — is no longer enough. Decision-makers must reimagine fleet management to recoup fleet operation costs and drive long-term profitability in today’s competitive landscape. The only way to maximize this approach’s potential is to embrace it fully.  

Many construction leaders are investing in electric vehicles because they use rechargeable batteries and electric motors that shut off when not in use to lower maintenance and operational costs. Maintenance is also streamlined with electric equipment, lithium-ion batteries, and electric motors requiring less upkeep to run optimally, helping workers remain occupied with their daily tasks. In addition, electric fleet vehicles have fewer parts, reducing the number of components that need repair.

However, modernizing an entire fleet at once may not be feasible for small- and medium-sized companies. Connectivity is a good middle ground for those seeking modernization.

What Modern Fleet Connectivity Entails

A connected fleet is a group of interconnected vehicles — construction equipment, commercial trucks, or passenger cars — that use various aftermarket digital systems and physical sensors to talk with each other and the fleet manager. The interconnected devices collect and transfer data on driver behavior, asset condition, and route status in real time.

Fleet connectivity offers exceptional visibility and control compared to traditional systems. Modern telematics are far more precise than global positioning system technology. Instead of simply pinpointing a driver’s position via satellite, they capture in-depth location, movement, acceleration, vibration, and temperature readings.

The same can be said for modern fleet management software, which integrates seamlessly with other systems, updates in real time, and offers a centralized visual dashboard. It’s vastly superior to the traditional pen-and-paper approach, even for smaller companies with few vehicles. Instead of simply entering information into fields, managers can generate data-driven insights.

Advanced connected fleets collect, process, and store information at the edge — meaning on-device or on local servers — instead of sending it to the cloud and back. This diminishes network strain and lowers latency, helping companies generate insights even faster. 

Leveraging modern fleet connectivity is a sound business decision and the technologies that drive it are profitable. In fact, experts expect the global fleet management market to achieve a compound annual growth rate of 10.6% from 2021 to 2030, generating an absolute revenue of $5.25 billion during the forecast period.

How Does Fleet Connectivity Increase Profitability?

In addition to resolving fleet management pain points, connectivity makes it easier for businesses to break into competitive markets, enabling them to acquire new regions, clients, or cargo types. This, in turn, increases profitability in several ways:

• Eliminates bad behaviors: Managers can see precisely when drivers break harshly or accelerate haphazardly. Intervention improves fuel efficiency and reduces vehicle wear.
• Increases uptime: Data emitted from connected vehicles can increase fleets’ uptime and enhance predictive maintenance strategies, reducing scheduled repair costs.
• Optimizes resource usage: Comprehensive visibility into any metric allows decision-makers to address overspending and inefficiencies, increasing profitability.
• Enables change: Real-time insights enable immediate change, making it easier to identify and address irregularities as soon as they happen, mitigating cost overruns.

Change can be intimidating because manual management strategies are familiar. However, the construction industry is evolving, and fleets must adapt or be left behind. Adhering to outdated methods of a bygone era will only cause exponentially more significant losses over time. The only way to break into competitive markets — and remain there — is to embrace connectivity.

Besides, although investing in fleet connectivity requires a relatively high initial investment, it quickly pays for itself. Approximately 90% of connected fleet operators reportedly receive a return on investment within 12 months and around 40% receive a return in half that time, underscoring how profitable these technologies can be.

Driving Profitability Requires an Ongoing Effort

Although connectivity is profitable, decision-makers must still apply sound business tactics, as correctly leveraging fleet-generated operational data is vital. Ultimately, mitigating cost overruns requires strategic and informed decision-making.

In today’s competitive landscape, digitalization-driven success is an ongoing effort. After all, technology is constantly evolving.