Private Fleet vs Dedicated: Which one is right for you?

Dedicated Transportation, Fleet Management
February 25, 2016

Private vs Dedicated FleetAs companies look for ways to remain competitive, they need to re-evaluate their fleet.

For shippers, there are many differences between owning a private fleet and using a dedicated fleet. Some of these differences include cost, service, reliability, and the time taken away from their core competencies.

Private Fleet

A private fleet provides a company with total control along with the advantages of guaranteed capacity, supply chain control, and visibility of the entire operation. Private fleet owners can brand their trucks and add revenue by shipping goods for other companies when capacity allows.

A private fleet can also add unpredictable costs for companies. These costs include:

  • Maintenance
  • Replacement vehicles
  • Fuel
  • Licensing
  • Driver hiring, training, and management
  • Regulatory compliance

Other challenges private fleet owners face include supply volatility and fluctuations in customer requirements. Private fleet owners normally own more trucks than they use on a daily basis to have the flexibility they need for peak periods, but these mostly dormant vehicles hurt a company’s bottom line. This is because private fleet owners plan their fleet to a peak period, so their capital is locked up in excess vehicles.

Dedicated Fleet

A dedicated fleet allows companies to have all the benefits of owning a fleet without having to manage it, while lowering their transportation spend. A dedicated fleet guarantees capacity, gives the company visibility it needs, and has the opportunity to make extra revenue through backhauls. Companies can also brand their trucks in a dedicated model.

A dedicated fleet also guarantees drivers who are specially trained for their company. Companies will also have a right-sized fleet with the flexibility to add capacity during peak periods. Maintenance and vehicle replacement is also covered.

For many private fleet owners who have transitioned to a dedicated fleets, they have experienced:

  • Greater flexibility
  • Fewer driver issues
  • Improved service levels
  • Increased on-time delivery performance
  • Access to capital.

They also have outsourced compliance worries and liability – both of which can be extremely costly for private fleet owners.  Along with freeing up personnel and money, a dedicated fleet allows companies to focus more on their business.

“We had become a trucking company, but we really wanted to be a nursery,” says Eric Cord, President of Windmill Farms Nurseries. “We were ready to be out of the trucking business. Immediately, Ryder committed 100 percent, providing the equipment and drivers we needed. That alleviated many of the headaches – no more 3 a.m. phone calls for deliveries or having to find drivers in today’s tight market.”

The decision to own a private fleet or have a dedicated one should be based on a full evaluation of your current fleet and its needs. After an evaluation, the shipper will be better equipped to decided whether a private or dedicated fleet is in the best interest of the company.

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