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1Hari Ramesh Babu.G., and 2Surendharan.D

1kumaraguru college of technology, M.E industrial engineering, KCT, coimbatore-641006

E-mail: hari821105@gmail.com
2 kumaraguru college of technology, M.E industrial engineering, KCT, coimbatore-641006

Abstract:- In logistics management, the fleet management is important to save time and fuel
consumption and in turn increases the profit of the company. An effective fleet management should
determine which vehicle should serve which customer location and best stop sequence to accommodate
customer’s time window while minimizing travel distance and time. Fleet management plays an important
role in on time delivery of product to the manufacturer which is an essential requirement for modern
manufacturing concepts like JIT. This Paper focus on the ways and means to build an intelligent routing
based on considerations such as priority, capacity, geographic location and cost. It also focuses on the
various obstacles or barriers for effective fleet management with sources from a local logistics operator. It
discusses on certain rules and key points to be considered while calculating routes and schedules in order
to improve the efficiency and productivity.


Fleet management is the management of a company's vehicle fleet. Fleet management includes
commercial motor vehicles such as cars, vans and trucks. Fleet (vehicle) management can include a
range of functions, such as vehicle financing, vehicle maintenance, vehicle telematics (tracking and
diagnostics), driver management, fuel management and health & safety management. Fleet
Management is a function which allows companies which rely on transportation in their business to
remove or minimize the risks associated with vehicle investment, improving efficiency, productivity
and reducing their overall transportation costs. Also to determine which vehicle should serve each
customer location and the best stop sequence to accommodate your customers' time windows while
minimizing travel distance and time. We can formulate and offer intelligent routing by taking into
account actual network drive times, distances, street network restrictions, vehicle characteristics,
customer characteristics, and more. After solving a routing problem, you can export routes and
schedules back to a database using GIS-based applications or print routes with driving directions.

We need to consider the following while designing a fleet management system,

• Ability to use your own geographic data

• Takes into account specialties of vehicles and orders

• Builds routes based on network drive times, distances, and restrictions

• Outputs route summary reports, detailed and overview maps, street-level datas, driver manifestos

• Ability to integrate the Automatic vehicle location system, enterprise resource management,
global positioning system for tracking, customer relationship management, warehouse management,
routing softwares etc.

2.1 Priority

Orders can be assigned high or normal priorities to designate how they should be assigned in
route.The ability to assign priority allows the best allocation of vehicles when more orders exist than
resources will allow. Arc Logistics is able to ensure that high-priority orders are filled before normal
orders when constraints and limitations arise. This translates not only into keeping delivery/service
appointments but also better accountability and reliability in an organization's fleet management.

2.2 Vehicle capacity

Capacities for your vehicles: Weight, Volume, Custom, and Maximum Orders. Volume, Weight,
Custom, are the maximum volume, weight, and custom capacity the vehicle can carry. Custom
provide an option to specify any other capacity that affects how much your vehicles can carry (e.g.,
pallets, cases, wheelchairs). Volume, Weight, Custom, and Custom 2 can be in any measurement,
such as cubic feet, pounds, pallets, cases, or just the number of items, as long as they are consistent.

2.3 Zones

Zones are geographic map features that are associated with a vehicle in order to send that vehicle into
a preferred area. Zones are very useful when your operation has fixed routes with distinct geographies
or when you want to tailor routes to specific areas based on business requirements.

2.4 Costs

Cost can include the cost of fuel; maintenance; depreciation; and mileage-based wages, fees, or taxes.
Per Hour cost can include the hourly wage of the driver, the cost per hour of operating the vehicle, or
both. The cost per hour must be greater than zero. Per Hour OT is the per-hour cost of operating the
vehicle once overtime begins. This cost can include the hourly wage of the driver, the cost per hour of
operating the vehicle, or both. The overtime cost per hour must be greater than or equal to The other
factors include rules such as Maximum Travel Distance is the maximum distance of a route

2.5 Other factors

. The vehicle must return to its end location within this distance. Maximum Travel Duration is the
maximum number of hours that a route can be driven. The vehicle must return to its end location
within this time frame. Maximum Total Duration is the maximum duration of a route including travel
time, lunch, order service time, wait time, and time at the start and end of the route. The vehicle must
return to its end location within this time frame. Time before OT is the number of hours into a route
before the overtime hourly rate the per-hour cost.

The trucking industry in India is entirely in the private domain and is dominated by small road
Transport operators, majority of whom own a single truck. The industry is a major contributor to the
Economy. It has been increasing its share in the movement of goods within the country vis-à-vis other
Modes of transport, up from less than 20 per cent in 1951 to 70 per cent now. It has also, in the
process, acquired significant political influence. Given the large number of truck owners, the industry
appears to be competitive; the fact, however, is that around 5000 cargo operators handle the entire
cargo. According to industry sources, in about 2-3% of cases, do customers directly access the truck
owners and book their goods. The cargo operators cartelize and decide the freight and there is hardly
any competition at their level. This is the most important feature of the trucking industry in India and
it has a critical bearing on the quality of its service and the policy design to deal with the issue. The
regulatory provisions governing the industry have been liberalized but a lot more is required to be
done. Road traffic has overtaken the railways in both the passenger and freight segments. Currently,
road transport accounts for 85 per cent and 70 per cent of the total passenger and freight transport
respectively. Most of the remaining traffic is accounted for by the railways, with a small percentage
share going to the air transport sector. The road transport sector has witnessed a growth rate of 7 to 10
per cent every year since 1960-61. It is estimated that total freight transport output will double every
10 to 13 years. A rise in the long-term trend line of GDP growth will imply correspondingly rapid
growth in transport output. The growth of vehicle population, by type, is given in the statement in
Annexure 1. The number of goods vehicles has grown from 1.7 lakh in 1961 to 30 lakh in 2001-02,
making a growth of 8% annually. The industry has a two-tier structure. Tier 1 consists of freight
aggregators who account for the bulk of the freight traffic because of their access to information about
freight and fleet availability. They control the business and are recognized by banks. The other tier
comprises small operators with 1-5 trucks and practically no market power.


Although road freight transport industry is growing fast because of its inherent advantages, it has
developed certain features which are not in the interest of the country. These include:

• The structure of the road user charges has promoted an uneconomic distribution of traffic between
roads and railways. Road freight vehicles are undercharged; road freight rates are below their
economic level and encourage the shift of freight from rail. Ideally, railway should carry most of the
bulk goods across the country since it is energy efficient mode of transport and India continues to be
an oil importing country.

4.1 Roads

• Roads suffer from several deficiencies. Given the poor road condition, there is little incentive to
invest in better-designed high capacity vehicles. Our road network suffers from poor road geometrics,
weak and narrow bridges, frequent access from side roads to main roads, congested city sections,
poorly designed road intersections and existence of level crossings which pose problems for the
transport operators. Bad roads result in accidents, frequent breakdown of vehicles, congestion, higher
fuel consumption, greater wear and tear of tires. Initiatives taken by the central and state governments
recently to improve the highways would have a positive impact on the efficiency of road transport in
the country.

4.2 Overloading

• Overloading is the rule rather than an exception. It is responsible for faster aging of the vehicles
and their breakdown more frequently. Paradoxically, trucks overloaded in one direction are usually
empty on the return trip; so overall utilization of the trucks is low and price competition severe.

4.3 Ergonomics
• Bodybuilding remains primitive in design and material; it is unsafe and uncomfortable for the
Drivers and which leads to long term disorders and health problems.

4.4 Drivers

• Drivers work for long hours, have little wayside amenities and are potential carriers of HIV. The
negative externalities of road transport in terms of air pollution, accidents are significant and have
their high costs.

4.5 Ownership

• Structure of ownership is not conducive to introduction of improvements since it increases initial

outlay and cost of operations.

• Small operators find it difficult to access funds for acquisition of vehicles. High cost financing and
lack of working capital finance are also obstacles to truck operators who wish to expand their fleet.

4.6 Check posts

• Variation in motor vehicle taxes distorts natural inter-state traffic.

• Small operators find it difficult to access funds for acquisition of vehicles. High cost financing and
lack of working capital finance are also obstacles to truck operators who wish to expand their fleet.

• Extortions by law enforcing agencies at every stage starting from vehicle registration, licensing, toll
points, check posts etc. result in increasing costs, inordinate delays and decreasing efficiency of
transport operations. Transit time is dependent on the distance between the point of origin and
destination of cargo and the speed of vehicles. Discussions with transport operators of high-valued
sensitive cargo revealed that it takes three days for a truck to cover a distance of 1408 km between
Delhi and Mumbai and four to five days to traverse a distance of 2019 km between Delhi and
Bangalore. In USA, the transit time for similar distances would be two and three days respectively.
The trip time is adversely affected by stoppage at check-posts. These barriers consume line haul hours
in unproductive waiting. Truckers reported that 15 to 25 percent of line-haul time was lost at
checkpoints, although other estimates were as low as 4 percent. The vehicles are also not able to
achieve optimum speeds due to traffic mix of non-motorized and low-powered vehicles. The position
is further compounded by overloading of trucks beyond the permissible loading limits. It is for these
reasons and poor road infrastructure that the average speed is generally in the range of 30-40 km/hr
against 60-70 km/hr in developed countries.

4.7 Types of trucks

Factors adversely impinging on the quality of service are the types of the trucks in use, lack of
tracking facilities and the unorganized nature of industry with a host of intermediaries. As the
situation stands, most of the trucks are two-axle and fitted with leaf-spring suspensions affecting both
the output and the productivity of the industry. In addition, the existing insurance regime covering the
loss of cargo is detrimental to the interests of the shippers. Besides, the archaic provisions of the
Carriers Act, 1865 are harsh on the truck operators. Despite the above-mentioned infirmities, on a
broad sweep, it can be concluded that basic transport services are generally available at low cost when
and where needed. The present standards of service are probably adequate for a large portion of the
traffic. However, there are concerns as to the transit time and safety of cargo, particularly of time
sensitive and higher-valued goods.

4.8 Intermediaries

The trucking industry has a number of intermediaries who play a significant role in facilitating the
business of truck operators and the provision of efficient transport services. These include the booking
agents and the brokers. While broker is a person (or a group of persons) who takes commission from
the truck owners and ensures the supply of trucks to the transport contractor, booking agent is a
person engaged in the business of collecting, forwarding or distributing goods Carried by trucks. In
addition, some of these agencies also provide finance and go down facility. Despite the provision in
the Act for their registration, the intermediaries are an unregulated lot. No code of conduct has been
stipulated for them.

4.9 Other factors

The smooth flow of goods carriers is hampered by frequent stoppage of vehicles at various check-
points. Broadly, the detention is caused by (i) RTO checking: Vehicles are detained for checking the
essential documents: registration books, driving license, permit, etc. (ii) vehicles are also detained by
the respective agencies for checking payment of taxes (sales tax, octroi etc) at separate points, (iii)
police checking for booking the drivers for offences, such as violation of traffic rules and regulations
and (iv) border-post checking of vehicles before these are allowed entry in the state. The systems and
procedures, infrastructural facilities and level of automation vary from check-post to check-post. The
detention causes congestion, delay and leaves the vehicles idling thereby adversely affecting the
efficiency of the road transport system.


Most of the shippers expect quality of service which consists, essentially, of three things: transit
time; reliability of service and safety of cargo. A list of attributes of the quality of service was
formulated and the shippers were asked to provide scores on a scale of five to the individual
parameters on the basis of importance attached by them. The findings revealed that maximum
importance was attached to transit time and interestingly the freight rates received the least
importance. The safety of cargo and the experience of the drivers were other important considerations.

There is low level of technology used in the manufacture of Indian trucks; the technology used is of
the late 1940s or that of early 1950s. This is despite the fact that the prominent truck manufacturers
like Ashok Leyland and TATA and the trucking firms are in the private sector; they ought to have
shown sensitivity to the technological aspects of the industry. This has not happened; the market/ the
economics of business is perhaps not transmitting the signals required for technological up gradation.
The body building industry is totally unorganized and unregulated. There is no uniformity in design
features which vary from state to state. The case for modernization is that with increasing age, trucks
ability to transport goods declines due to lower fuel efficiency, increased maintenance requirements
leading to longer down time period. Modernization of vehicle fleet may involve: improvement of
vehicle technologies, promotion of multi-axle vehicles and replacement of older vehicles by
newer/younger vehicles.


For an effective management of Fleets and to improve the productivity and revenue for the carriers
as well as providing quality of service to the customers we have proposed the following set of
guidelines based on the requirement and problems that the Indian fleet owners face today. The
procedure or guidelines can be classified into four subsets or clauses and they are discussed in detail

1. Vehicle Tracking

2. Planning and Scheduling

3. Control and Security

4. Driver Qualification and Performance

5. Physical fitness

6. Customer Relations

6.1 Vehicle tracking

The most important component in a fleet management is the tracking of vehicles as it gives the
information about the location of vehicles and the status of the vehicle which will be important for
controlling the operation and providing updates to the customers. The customers will be interested to
know the status of their goods and this will help in improving the customer relationship. Currently
only the larger Fleet owners have this facility and most of the small fleet owners including the owners
who have 50 to 60 trucks do not have a latest tracking system like GPS based systems, they simply
rely on the drivers messages and check post information which are prone to false in formations. In
order to have an cost effective and better tracking system the owner’s association like Namakkal lorry
owner association and Namakkal Trailers owners association can have a common tracking system for
all of their vehicles so that these tracking devices can be fit into the Trucks and the movement of them
can be monitored from a central office. By doing so the cost involved in installing maintenance can be
shared and at the same time improves control and productivity.

This component is usually GPS based, but sometimes it can be based on a Cellular triangulation
platform. Once vehicle location, direction and speed are determined from the GPS components,
additional tracking capabilities transmit this information to a Fleet Management software application.
Methods for data transmission include both terrestrial and satellite. Satellite tracking communications,
while more expensive, are critical if vehicle tracking is to work in remote environments without
Principle of geolocation based on the GPS for the position determination and the GSM/GPRS or
telecommunication satellites network for the data transmission.

6.2 Planning and scheduling

It is important to maximize safe driving efficiency through planning at the dispatching level.
Assisting the driver with pre-trip planning avoids overburdening the driver with unusual driving
conditions caused by tight schedules, unusual cargoes, and unfamiliar or hazardous routes.It greatly
reduces the fuel costs and other costs such as check posts, damages to vehicle part due to poor
selection of roads and time of transit.

In order to plan and schedule a effective trip for the trucks the following set of questions are
framed, the management should satisfy all the following questions to have an effective scheduling.

• Are Hours-of-Service statutory regulations enforced?

• Are records of driver duty status maintained?

• Does the carrier have a means of forecasting available driver hours?

• Is dispatching planned to minimize the need for excessive on-duty schedules?

• Are tight schedules minimized and allowances made for adverse weather conditions?

• Are dispatchers knowledgeable in matching cargoes with vehicles during dispatching?

• Are drivers instructed how to deal with sealed cargoes?

• How does the company handle the problem of overloading?

• How does the company instruct drivers with regard to improperly loaded or secured cargoes?

• Are routes planned and drivers coached to avoid high hazard locations?

• Are schedules reviewed to ensure against Hours-of-Service violations?

6.3 Accident control and security

A preventable accident is one which occurs because the driver fails to act in a reasonably expected
manner to prevent it. In judging whether the driver's actions were reasonable, one seeks to determine
whether the driver drove defensively and demonstrated an acceptable level of skill and knowledge.
The judgment of what is reasonable can be based on a company-adopted definition, thus establishing
a goal for its safety management programs.

The concept of a preventable accident is a fleet safety management tool which achieves the
following goals:

• It helps establish a safe driving standard for the driver.

• It provides a criterion for evaluating individual drivers.

• It provides an objective for accident investigations and evaluations.

• It provides a means for evaluating the safety performance of individual drivers and the fleet as a

• It provides a means for monitoring the effectiveness of fleet safety programs.

• It assists in dealing with driver safety infractions.

• It assists in the implementation of safe driving recognition programs.

The following questions need to be answered satisfactorily to prevent accidents,

• Does the company have a program for investigating accidents?

• Is there a company accident review committee?

• Has the company defined a standard for the safe driving performance of its drivers ?

• Is the carrier's standard for safe driving performance sufficiently challenging such that it would
serve to highlight areas for fleet safety improvement?

• Are the drivers instructed as to what the company standard for safe driving is ?

• Are the drivers instructed about company procedure for evaluating the preventability of accidents?

6.4 Driver qualifications and performance

The great majority of preventable accidents can be shown to be directly related to the performance
of the driver. It is therefore extremely productive to any fleet safety program to have careful new
driver selection and adequate monitoring procedures for existing drivers.

The set of questions to be answered by the management to have better driver performance,

When hiring new drivers:

• Are recruiting efforts sufficient to attract an adequate number of qualified applicants for

• Effective selection?

• Is there an established formal procedure for interviewing, testing and screening applicants?

• Is there a defined standard of skill and knowledge to be met by successful applicants?

• Are appropriate methods being utilized to check out previous employment history and references?

• Is the prior driving record being checked?

• Are the applicants' physical qualifications checked?

Monitoring existing drivers' qualifications:

• Is there a formal program for monitoring drivers' qualifications?

• Is there a periodic review of the driving record?

• Is there a periodic review of the drivers' health?

• Are drivers monitored for drug and alcohol abuse?

• Is there a means for identifying deficiencies in drivers' skills and knowledge and a procedure for
remedial training?

• Is there an established procedure for terminating unqualified drivers?

6.5 Physical fitness

To prevent accidents caused by ill and fatigued drivers through the use of common sense and by
compliance with FMCSR’s (Federal motor carrier safety regulations) regarding physical
qualifications and hours-of-service.

Guidelines for management,

 Are maximum on-duty and driving times clearly spelled out to your drivers?

 Do you cross-check driver-logs with odometer readings, fuel receipts and weight scale tickets?

 Do you use tachographs or on-board trip computers if you suspect driver violations?

 Have drivers been explicitly informed how violations will be dealt with?

Instructions for drivers,

• Don't start a long trip unless you get a good sleep before you go.

• When possible, schedule your trips so that you drive when you are normally awake and
you sleep when you are normally asleep. Don't throw off your body clock more than necessary.

• Be careful with any kind of medication. Many medicines can make you sleepy.

• If you get drowsy, don't drive. You're asking for problems. At least take a short nap until
you can drive somewhere to get a good sleep.

6.6 Customer relations

Customer satisfaction is the most important key factor for withstanding the competition and
increasing the revenue. Hence the firms should design the customer relation policies based on the
expectations and requirements of the customers.

Customer expectation and requirement can be studied and analyzed by using the techniques like
QFD (Quality Function Deployment) to collect the data from customers which uses questionnaires,
Feedbacks, Customer relationship teams etc.


The vehicles plying under the national permit should be multi-axle as they cause less damage to the
roads, are fuel efficient and cost effective as is brought out in the following table:
able 1: Two-axle Truck Vs Multi-axle Vehicle

Parameter 2- axle truck 3- axle truck 4 – axle truck

Payload (tonne) 9 15 31

Annual utilization (km) 96000 96000 96000

Productivity (km) 864000 1440000 2976000

Operating cost (per Rs. 0.99 Rs. 0.78 Rs. 0.60

tonne km)

Operating crew 3 persons/truck 3 persons/truck 3 persons/truck

Fuel efficiency (per 100 2.95 litres 2.47 litres 1.77 litres

Source: Study on Trucking Operations in India (1999).

The operating cost per tonne km for a 3-axle truck is 21% less and for 6-axle truck 39% less
Compared to that of a 2-axle truck. Besides, larger vehicles achieve higher levels of utilization


Thus the importance of improving the fleet management system and its current situation in India are
discussed. By following the set of guidelines as given in this paper which can be evolved to a higher
level in future to develop a standard for fleet management and if these guidelines are followed
properly it will not improves the productivity and return of investment but also helps to improve the
economy of the country as the logistics plays an important role in supply chain.