Transport and Fleet Management

TRANSPORTATION
PSM 310
Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Transportation
Introduction
Transportation refers to the safe movement of goods or people from one point to another point where they are demanded
in a manner that is effective and efficient.
Sometimes is called freight transportation. Normally goods move from point of production to the point of consumption by
the means of roads, railways sea, air and or pipeline.
The major elements of transport
• Ways: It is a path in which the vehicles will pass. This includes land, water and air.
• Fleet or Vehicle: This is a thing that carry freight from one point to destination point. This includes lorries, trains, ships,
aero planes, etc
• Terminals
This refers to the starting point and ending point where goods are loaded and offloaded. Examples includes railway stations,
seaports, airports, etc.

Transportation
• Method of propulsion/Motives of power
This may include petrol, gas and electricity.
• Freight
These are physical goods or materials to be moved from one point to another where they are demanded. “No freight no
transport”.
• Modes of transport
Is the approach through which goods are moved from one point to another where are needed.
Transport is possible through land, air or water, which are called the different modes of transport. On land we use trucks,
tractors, etc., to carry goods; train, bus, cars etc. to carry passengers. In air, we find aero planes, helicopters to carry
passengers as well as goods. Similarly in water we find ships, steamers, etc., to carry goods and passengers. All these are
known as various means of transport.
The modes of transport can be broadly divided into three categories: Land transport, Water transport and Air transport.

Transportation
Modes of Transport categories : 1.Land Transport , 2.Water transport and 3. Air transport.
1. Land Transport: (Includes road, rail, pipeline and ropeway)
a. Road Transport (Roads are the means that connect one place to another on the surface of the land. )
i. Man driven (Individuals carrying goods on their head or back, in bicycles, etc…)
ii. Animal driven (We also find animal driven vehicles like carts drawn by bullocks, camels, horses, donkeys, etc.)
iii. Motor driven (include auto-rickshaws, scooters, vans, buses, tempos and trucks, etc.)
Advantages:
• Have ability to deliver goods directly to the consignee (customer) very fast.
• Highly flexible – routes and loading routines can be easily altered, operate day and night. Frequent, scheduled delivery can be done.
• It is cheaper and quick for a short distance.
• Consignment reaches the doorsteps of the customer (door-to-door service). Road is not limited to a fixed route/terminal.
• Low capital cost investment – for own fleet as compared to other modes like rail, air, pipeline.
Disadvantages:
• Higher operating costs – due to high energy consumption.
• Limited carrying capacity-Legislation limit dimensions and gross mass of vehicles.
• High safety and security risk - vulnerable to hijacking, accidents, or theft.
• High environmental impact- create noise and air pollutions.
• Affected by road conditions e.g. traffic congestion kills reliability and punctuality of road transport, road closure lasting several hours, etc.
• Can be affected by weather conditions in areas with severe climatic conditions e.g. heavy fog and snowfalls.

Transportation
1. Land Transport…cont…
b) Rail transport
Transportation of goods and passengers on rail lines through trains is called rail transport. It occupies an important place in land transport system
of our country and is the most dependable mode of transport to carry goods and passengers over a long distance. Besides long distance, local
transport of passengers is also provided by local trains or metro-rail in some metropolitan cities. Rail transport is available throughout the country
except some hilly or mountainous regions.
Advantages of Rail transport
i. It is a convenient mode of transport for travelling long distances.
ii. It is relatively faster than road transport.
iii. It is suitable for carrying heavy goods in large quantities over long distances.
iv. Its operation is less affected by adverse weathers conditions like rain, floods, fog, etc.
Limitations of Railway transport

i. It is relatively expensive for carrying goods and passengers over short distances.
ii. It is not available in remote parts of the country.
iii. It provides service according to fixed time schedule and is not flexible for loading or unloading of goods at any place.
iv. It involves heavy losses of life as well as goods in case of accident.

Transportation
1. Land Transport…cont…
c) Pipelines transport
In modern times, pipelines are used for various purposes. Water supply to residential and commercial areas is carried
on with the help of pipeline. Petroleum and natural gas are also transported from one place to another through
pipelines. This is the most convenient as well as economical mode of transport for petroleum as well as natural gas in
comparison to road and rail transport, provided the volume to be transported is large. But the cost of installation and
maintenance requires large capital investment.
d) Ropeway transport
Ropeway refers to a mode of transport, which connects two places on the hills, or across a valley or river. In the hilly
areas, trolleys move on wheels connected to a rope and are used for carrying passengers or goods, especially building
materials, food, etc. The famous ‘Uran Khatola Jagdamba’ in Gujarat that carries pilgrims to the temple

Transportation
2. Water transport ( Includes Inland water transport and Ocean/Sea transport)
Water transport refers to movement of goods and passengers on waterways by using various means like boats, steamers,
launches, ships, etc. With the help of these means goods and passengers are carried to different places, both within as well
as outside the country.
a) Inland water transport
Inland water transport use boats, launches, barges, streamers, etc., to carry goods and passengers on river and canal routes.
These routes are called inland waterways and are used in domestic or home trade to carry bulky goods. Passenger transport
through waterways is not so popular in our country. Inland water transport system exists only in few states like West Bengal,
Andhra Pradesh, Assam, Tamil Nadu, etc.
b)Ocean/Sea transport ( Includes Coastal Shipping and Overseas Shipping )

Ocean transport refers to movement of goods and passengers with the help of ships through sea or ocean waterways. It plays
an important role in the development of international trade. It is also used for transporting goods and passengers in the
coastal areas. Ocean transport has its fixed route, which links almost all the countries of the world.
i. Coastal Shipping - In this transport, ships ply between the main ports of a country. This helps in home trade, and also in
carrying passengers within the country.
ii. Overseas shipping - In this transport, ships ply between different countries separated by sea or ocean. It is mainly used
for promotion and development of international trade. It is economical means of transport to carry heavy machines and
goods in bulk. Overseas transport is
Mr.carried
Mollel.D out( PSM
on fixed
310 ) routes, which connect
Moshi Co-Operative almost all the countries.
University
Transportation
2.Water transport…cotn…
Advantages:
1. It is the cheapest mode as it move large volume of goods over longer distance.
2. Heavy and bulk goods or any kind of goods are transported by this mode.
3. Sea transport offers a very safe and secure service
4. No traffic congestion on the open sea
Disadvantages:
1. It can deliver wherever there is seaport capable of receiving ships.
2. It is the slowest mode and unsuitable for emergency or highly tight deadline.
3. Need huge capital fund.
4. May be affected by climatic condition (bad weather) and delay freight.
5. It is difficult for buyer to control transit time

Transportation
3.Air transport
This is the fastest mode of transport. It carries goods and passengers through airways by using different aircrafts like
passenger aircraft, cargo aircraft, helicopters, etc…. Besides passengers it generally carries goods that are less bulky or of high
value. In hilly and mountainous areas where other mode of transport is not accessible, air transport is an important as well as
convenient mode. It is mostly used for transporting goods and passengers during natural calamities like earthquake and
floods, etc. During war, air transport plays an important role in carrying soldiers as well as supplies to the required areas. Air
transport may be classified as domestic and international air transport. While domestic air transport mainly facilitates
movement within the country, international air transport is used for carrying goods and passengers between different
countries. Air transport is carried out in fixed air routes, which connect almost all the countries.
Advantages of Air transport

• It is the fastest mode of transport. (not an advantage)
• It is very useful in transporting goods and passengers to the area, which are not accessible by any other means.
• It is the most convenient mode of transport during natural calamities
• It provides vital support to the national security and defense.

Transportation
Limitations of Air transport:-
• It is relatively more expensive mode of transport.
• It is not suitable for transporting heavy and bulky goods.
• It is affected by adverse weather conditions.
• It is not suitable for short distance travel.
• In case of accidents, it results in heavy losses of goods, property and
life.
FLEET MANAGEMENT
PSM 310

Fleet Management
• Fleet - Are number of vehicles operating together under the same ownership.
• Fleet (vehicle) management is the total management of a company’s vehicles in terms of vehicle financing, vehicle
maintenance, vehicle tracking and driver management, speed management, fuel management and health and safety
management.
• Fleet Management is a function which aims at removing or minimizing the risks associated with vehicle investment,
improving efficiency, productivity and reducing overall transportation and staff costs.
In today’s modern world, fleets can come in many different shapes and sizes. Technically speaking, both a large, nationally-
operating trucking company and a small, locally-operating delivery company are considered fleets. So, if you fall into either of
these categories or anywhere in between, you’ve got a fleet to run.
At its core, fleet management covers the practices of overseeing, organizing, and recording all aspects of a company’s fleet.
These managerial duties might include, but aren’t limited to, establishing regular vehicle maintenance schedules, establishing
cost saving measures, and implementing new driver training programs.
Effective fleet management aims at reducing and minimizing overall costs through maximum, cost effective utilization of
resources such as vehicles, fuel, spare parts, etc.

Fleet Management
The administrative policies of the individual organization will dictate which approach will be utilized. This result in the
custodian of the fleet management function to be very much dependent on organizational policies and structures.
Organizational Vehicle Policy
A vehicle policy will provide specific guidelines for the management and use of vehicles and other mobile assets. Policies are
designed to facilitate and encourage accountability, monitoring of usage and costs, provide internal control and to serve as a
management tool for better decision.
A basic vehicle policy would have the following inclusions amongst others:
• Introduction
• Purpose
• Scope
• Objectives
• Planning, Approval and Budget process
• Procurement
• Approved types for vehicles
• Ordering of vehicles process
• Assignment of vehicles
Fleet Management
A basic vehicle policy would have the following inclusions amongst others:
• Personal use of vehicles by staff
• Management of vehicles:
• control of fuel, maintenance/repairs of vehicles
• vehicle insurance scheme
• vehicle replacement
• sale of vehicles
• Guidelines for drivers:
• assignment of Motorcycles
• security
• Environment
• Reports
• Revisions
• Conclusion

Fleet Management
Fleet Management Includes
i. Identifying needs
ii. Acquisition Process
iii. Insurance
iv. Vehicle leasing (Internal & external)
v. Fleet management systems
vi. Vehicle maintenance and up-keep
vii. Vehicle usage
a) Vehicle disposal
viii. Health, Safety & Security
a) Complying with Legislature and security requirements
b) Drivers

Fleet Management
Fleet Management Includes…cont…
i. Identifying needs
Identification of fleet needs is dependent on the nature of emergency and the size & area of operation - urban operations
could utilize smaller saloon cars whereas remote field operation may require larger four-wheel drive vehicles for extreme
terrain.
Vehicle selection criteria are guided by:
• Donor criteria applicable to the purchase;
• Uniformity of fleet;
• The appropriate vehicle type for local fuel availability;
• The purpose of the vehicle (cargo or passenger);
• The terrain in which the vehicle will operate;
• Global acquisition cost;
• Availability of local dealers;
• Local availability of spare parts for the intended vehicle;
• Warranties;
• Local availability of competent mechanics.
• Depending on the level of emergency the criteria may vary.

Fleet Management
ii. Acquisition Process
The standard tender process is adopted for vehicles, as for all other goods and services, bulk items and items bought on a
regular basis. In some cases, the process may result in outsourcing of some aspects of the vehicle management or leasing of
vehicles
iii. Insurance
• Careful consideration should be given to the form of insurance selected for the vehicles belonging to the organization. The
minimum legal requirements must always be complied with; this is usually at least third-party cover.
• To ensure compliance with the vehicle insurance requirements, all personnel using operation vehicles under the
responsibility of the organization must be fully conversant with accident and incident reporting procedures for vehicles
and personal injury.
Personnel requirements: the insurance cover for personnel will depend on the type of policy the organization takes to cover
its vehicles: third party fire and theft, comprehensive or liability insurance.
Note: Rent or Outsource: insurance coverage for leased or outsourced vehicles will be dependent upon what the
organization negotiates with the service provider. The organization will either adopt the service providers insurance as-is or
adopt it with amendments. An alternative is to completely outsource the fleet management, but again the type of insurance
will be dependent upon what is negotiated with the service provider.

Fleet Management
iv. Vehicle leasing (internal and external)
A vehicle or asset lease is a contract by which one party lets vehicles or assets to another party for a specified period of time.
A lease is a written agreement by which one party agrees to let another party have the use of specified assets for a period of
time for a fixed amount of money.
In an external leasing option, the ownership could:
▪ Remain with the leasing company or entity, but the rights for use are passed on to the lessee for the period of the lease;
▪ in other cases, at the expiry of the lease, the ownership is transferred to the lessee; and
▪ The ownership remains with the lessee, but management of some aspects such as maintenance, could remain with the
leasing company depending on negotiations.
However internal leasing is different. The organization itself owns the vehicles which are centrally managed and issued to
programs on a cost recovery basis. Organizations therefore budget for leasing costs only.

Fleet Management
Features of an external leasing agreement:
• Lease agreement is drawn up between the organization and the leasing company clearly specifying the terms of
agreement.
• In some cases the lessee may pay a monthly bill irrespective of mileage covered or a fixed amount with additional costs
per kilometer outside of a specified range.
• Depending on nature of agreement the lessor may be responsible for:
• repair and maintenance at agreed intervals;
• insurance;
• In some cases the vehicle may come with a driver.
• The lessee is responsible for:
• provision of competent drivers;
• monthly payment; and
• Managing routing of vehicle.
• The lessee’s drivers will be responsible for good driving.
• The contents of the agreement will depend largely
Mr. Mollel.D on310
( PSM the) negotiating powerUniversity
Moshi Co-Operative of the lessee.
Fleet Management
Advantages of leasing
▪ Routine repair or maintenance costs are built into leasing costs.
▪ No overheads in garage set-up and maintenance.
▪ No high initial purchase items in lessee’s books.
▪ The lessor bears most of the risk.
▪ The organization is able to focus on core business.
Disadvantages of leasing
▪ The organization losses control of some aspects of its fleet management.
▪ Discontinuation of services by the service provider can cause huge disruptions in the day-to-day operations.
▪ If the leasing contract is cancelled for any reason, the organization may have to make heavy investments in vehicle
purchases or temporary hire to ensure business continuity.
▪ The organisation would not be able to build up any institutional capacity in fleet management.

Fleet Management
Outsourcing
The nature of the contract is dependent on the ownership status which could be:
• An external company is contracted to supply and manage the vehicles;
• An external company supplies the vehicles, but the management remains with the organization; and
• The vehicles are owned by the organization and an external company undertakes the management of
the fleet.
The preferred options are dependent on the organizations approved procurement or sourcing policies
and operational needs. Contracting, sourcing and leasing are done in strict adherence with the
organizations approved procurement policy.
In emergency situations outsourcing and external leasing are common practices. In a rapid on-set
emergency, it takes time to ship-in or purchase vehicles for use in the response. Organizations are
sometimes left with the option of outsourcing or leasing vehicles or trucks from the local market. In the
initial days of the emergency, this can prove to be an expensive option.

Fleet Management
v. Fleet management systems
In recent times commercial organizations have designed automated control systems and other approaches to vehicle management. Simple
management systems can be designed in-house for internal use to provide a good analysis of the vehicles and driver performance.
Vehicle management systems are structured in a way that enables the capturing of information on various aspects of fleet usage, maintenance
and operations. For example:
▪ distances travelled;
▪ destinations reached;
▪ distance travelled by vehicle showing official and private mileage;
▪ fuel consumption;
▪ repair and maintenance per vehicle;
▪ rate of consumption of spare parts; and
▪ Servicing planned and completed.

Fleet Management
Maintenance
Vehicles are regularly maintained for optimum performance, and kept in good repair. In emergency situations the
Logistician is sometimes tasked with the responsibility of managing the vehicle fleet. To streamline vehicle
management the FM should put in place a simple process. Such a process could entail the following:
Maintenance Options
1. "In house maintenance" – performed using the facilities and staff of the organisation.
2. "Outsourced maintenance" – under taken by an outside contractor.
3. "Contract hire" - undertaken by an outside contractor as part of a vehicle operating system.

Fleet Management
Maintenance Planning
Whichever maintenance options is followed, vehicle maintenance schedules must be drawn up together with, and
published by the FM as part of the vehicle planning. All members of the management team must make a commitment
to respecting the scheduled dates for maintenance.
Preventative maintenance
This is done on a ongoing basis. This type of maintenance addresses the basic things that could cause a problem in
vehicles if they are not properly maintained. The Logistician or FM develops an inspection check-list to be used by all
drivers as a guide.
Each day, the first driver to use a vehicle will inspect the vehicle using the check-list.

Fleet Management
Routine maintenance
This type of maintenance is done on a monthly basis. It may cover the following:
i. the vehicle supervisor should periodically organize a test drive each vehicle and report on its condition and also ensure that normal/regular service has been done for all vehicles;
ii. tyres: any abnormal wearing should be reported to the FM; and
iii. Cleaning of the engine at least once a month.
Selection of Garage
Based on the organization's needs, the criteria for selection of the right garage are set with the input of the Logistics officer and the FM, keeping in mind the organizations approved
procurement procedures. For example the minimum requirements may include:
• number of qualified technical staff and details of qualifications;
• list of minimum equipment;
• services offered;

Fleet Management
Requirement for garage selection … cont…
• accessibility/location;
• credit facilities;
• satisfactory References;
• financial stability;
• repair/service costs;
• spare parts available; Basic spare parts in a workshop
Should the organization decide to manage its vehicle maintenance in-house, certain fast moving spares are recommended for stocking. This reduces vehicle
down-time.
The number of vehicles owned by the organization will determine the purchase of these parts and equipment.

Fleet Management
Maintenance Documentation
Vehicle maintenance summary:
Workshop job cards:
Vehicle Files and documentation:
vii. Vehicle usage

This aspect of vehicle management is very sensitive and is often abused. It is therefore necessary to have a clearly defined
policy regarding vehicle usage and staff benefits. Understandably, most organizations do not have the capacity to assign a
driver for each vehicle that they own. Under these circumstances, after testing, staff may be authorized to self drive.
Vehicle disposal
Running old vehicles may lead to high costs of maintenance and uneconomical fuel consumption. To avoid this, organizations
should have approved and clearly stipulated policies and procedures on how and when to replace and dispose of
vehicles/assets

Fleet Management
vii. Vehicle usage
Vehicle disposal
The need to dispose may arise due to any of the following reasons:
• as a result of extensive irreparable damage, or cost-prohibitive repairs;
• when the vehicle attains the stipulated mileage or years for disposal;
• when the vehicle is no longer economically sustainable;
• when the vehicle is no-longer required; and
• When programs downscale or shut down.
The disposal procedure applied for vehicles will apply for all other assets such as:
• Generators,boats/canoes/barges,motorcycles,fork lift trucks, etc…

Fleet Management
Vehicle safety is one of the key roles of the FM. It leads to staff safety
and enhances road safety.
The key to successful observance of health and safety is the
development of an organisational culture of awareness of, and
compliance with health and safety issues. To ensure that this is possible
the Health & Safety policy document must be practical and be
incorporated within day to day tasks.
Complying with legislature and security requirements is necessary…

Fleet Management
Legislature and security requirements are country specific and may relate to:
• driving authorization documents;
• type of vehicle allowed;
• size of vehicles;
• communication equipments fitted into vehicles;
• duties and taxes;
• return of vehicles - some countries do not allow the re-export of vehicles;
• safety requirements; and
• Vehicle jurisdiction - some vehicle cannot operate outside a specified area.

Fleet Management
Some organizations manage their own routine minor repairs and vehicle service workshops.
Basic health and safety measures for workshops would be:
• clear environments around work stations;
• completed risk assessments and action taken where risks are highlighted, i.e. warning tape on raised flooring;
• inductions;
• practice drills for fire evacuation; and
• Availability of and mandatory use of safety equipment such a goggles, boots, gloves, etc.

Fleet Management
There are five areas specific to transport management where local health and safety procedures will
probably need to be agreed and documented by the fleet technical staff:
1. Fuel stores
2. Safe operation of vehicles
3. Accident and incident procedures for vehicles
4. Vehicle workshops
5. Security of vehicle assets

Fleet Management
Drivers
• As part of fleet management it is necessary to divide drivers into categories based on skills and competence.
Constant evaluation of their skills, regular training and refresher courses will improve driver and vehicle
performance, reduce number of accidents and reduce maintenance costs.
• Each organization has the responsibility of identifying relevant training and courses available. These could be
included in organizational capacity building programs for drivers.
Following need to be considered when recruitmenting drivers.

• Take references to all previous employers
• If possible speak person to person with passed employers and discuss applicant’s records and characters
• Don’t accept open reference such as “ To who it may concern”

Fleet Management
Drivers
Following need to be considered when recruitmenting drivers. Avoid employing applicant with known alcohol abuse.
• Check driving license carefully.
• Obtain a photograph of the applicant and get the applicant signs in your presence.
• Care should be taken when employing temporary drivers, unless they personally known to you.
• Be ware with unexplained gaps in the employment record – query them.
Note on magaging drivers hours
• Establish maximum numbers of hours a driver may operate. For instance driver operating in inter regional transportation is
allowed to drive a max. of 10hrs following 8hrs off-duty.
• Check frequently if the minimum hours have been attended
• Ensure no driver work beyond acceptable hours limit unnecessary

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TRANSPORTATION

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Limitations of Railway transport

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

b)Ocean/Sea transport ( Includes Coastal Shipping and Overseas Shipping )

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Advantages of Air transport

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

• The appropriate vehicle type for local fuel availability;

• The purpose of the vehicle (cargo or passenger);

• The terrain in which the vehicle will operate;

• Global acquisition cost;

• Availability of local dealers;

• Local availability of spare parts for the intended vehicle;

• Local availability of competent mechanics.

• Depending on the level of emergency the criteria may vary.

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

In an external leasing option, the ownership could:

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

▪ distance travelled by vehicle showing official and private mileage;

▪ repair and maintenance per vehicle;

▪ rate of consumption of spare parts; and

▪ Servicing planned and completed.

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

2. "Outsourced maintenance" – under taken by an outside contractor.

3. "Contract hire" - undertaken by an outside contractor as part of a vehicle operating system.

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

iii. Cleaning of the engine at least once a month.

• number of qualified technical staff and details of qualifications;

• list of minimum equipment;

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Requirement for garage selection … cont…

• spare parts available; Basic spare parts in a workshop

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

vii. Vehicle usage

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

• as a result of extensive irreparable damage, or cost-prohibitive repairs;

• when the vehicle is no longer economically sustainable;

• when the vehicle is no-longer required; and

• When programs downscale or shut down.

• Generators,boats/canoes/barges,motorcycles,fork lift trucks, etc…

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

• driving authorization documents;

• type of vehicle allowed;

• communication equipments fitted into vehicles;

• duties and taxes;

• return of vehicles - some countries do not allow the re-export of vehicles;

• safety requirements; and

• Vehicle jurisdiction - some vehicle cannot operate outside a specified area.

Mr. Mollel.D ( PSM 310 ) Moshi Co-Operative University

Basic health and safety measures for workshops would be: