Fleet managers are critical leaders in companies that utilize equipment to get project work done. Often these are mid-size to large contractors who work on construction projects building things like roads, bridges, buildings and other infrastructure. While a simple passion for big machines such as bulldozers, excavators or dump trucks might get someone interested in equipment management, the field can be demanding and building a career as a fleet manager requires someone with a deep set of hard technical skills along with soft skills and experience.
In this guide, our team at Boom & Bucket lays out all the information on the skills required to become a professional fleet manager as well as tactics to constantly be at the top of the field. This guide is broken down into the following sections:
Feel free to hop around as there is a lot of material to digest here.
As outlined in the curriculum of the Certified Equipment Manager (CEM) fleet management certification program ran by the Association of Equipment Management Professionals (AEMP), there are five areas of expertise that the modern fleet manager must have mastery over:
Within each of these areas, there are a number of concepts that must be well understood in order to maximize the performance, utilization and safety of one's fleet.
Know how to read financial statements and reports (i.e., balance sheet, income statement, cash flow statement, actuals vs. budget)
Understand the difference between ownership costs and operating costs
Understand ownership cost buckets (i.e., depreciation, cost of facilities capital, equipment overhead, overhaul labor and overall parts)
Understand operating cost buckets (i.e., field repair labor, field repair parts, fuel, lube, tires, ground engaging components)
Know how to examine the tradeoffs of whether to execute an overhaul (e.g., engine rebuild)
Know how to make decisions around purchasing specialty equipment vs. subcontracting out work
Know how to create an annual operating budget as well as how to create a long range capital budget (spanning 3-5 years in time horizon)
Understand how to produce estimates on project job costs and revenue by forecasting utilization, equipment capacity, transportation and repairs
Understand what the best practices are for negotiating and how to get to a WIN-WIN outcome
Know how to prepare for a negotiation (i.e., the 12 power documents)
Understand the stages of a negotiation process and how to develop an action plan (also known as a needs assessment)
Know what actions can impact the direction of a negotiation (i.e., time, perceived risks, purchase volume)
Know how to identify and assess risks
Know how to implement risk control measures (i.e., avoidance, reduction, transference, retention)
Be able to accept risk when there are clear benefits that outweigh the risks being assumed
Know how to document a risk management (RM) plan and continuously improve it over time
Be able to contribute to project level risk management plans
Know the common types of insurance that can be used to transfer risk and be able to evaluate the properties of different policies
Understand the different types of warranties available (i.e., OEM factory warranty, extended warranty, etc)
Know how warranties are priced and know how to stay compliant with warranty terms
Be able to create models that can help determine what the appropriate warranty coverage needs are
Know what a performance guarantee or uptime guarantee is and how to value them (e.g., Caterpillar's CVA product)
Know how to develop Business Process Maps to document internal flows
Know how to define a metric or key performance indicator that can be tracked to determine whether improvements are being made to a given process
Be able to compare metrics against others in the industry (i.e., peer comparison)
Be capable of implementing an improvement agenda by working with others across your organization
Know how to compute the total capitalized cost of a piece of equipment
Be able to estimate useful life in years and hours
Be able to compute total life cycle costs (i.e., depreciation, interest, taxes/fees, insurance, overhead, maintenance, repair, and fuel)
Be able to compute annual hours of utilization
Know how to compute life cycle costs per hour of operation
Know how to create practical specifications that blend together technical, functional and performance requirements
Be able to use specifications to drive competition amongst manufacturers/dealers and capture value
Be able to run an effective and transparent bid process
Understand EPA emissions requirements and how to "green" one's fleet over time
Know how to gather requirements for a fleet management system from internal stakeholders and assess needs
Be able to assess any constraints for selecting products or vendors
Know how to run a selection process to evaluate all candidate solutions in a thorough manner
Be able to engage vendors in an on-going relationship for support, upgrades, etc.
Be able to customize settings and reporting output
Know how to facilitate training of new systems for other internal stakeholders
Keep up to date with new equipment operational technologies (i.e., telematics, machine control systems, etc)
Be able to assess the training needs of one's organization by identifying the knowledge, skills and abilities of every position
Know how to create a focused plan and develop tailored training materials
Ensure general safety training takes place and is compliant with all regulations/laws (e.g. OSHA)
Be able to deliver differentiated training for leaders, managers and supervisors so they accurately answer questions from other personnel
Know best practices and federal, state and local regulations around fuel storage (both underground and above ground tanks).
Know the dos and don'ts around fuel transportation and vehicle fueling.
Understand the Clean Air Act, Energy Policy Act and other emissions regulations. Be able to assess the impact to one's fleet.
Know the classifications of different types of hazardous wastes and requirements for storage, handling and disposal.
Have mastery over all employment laws (i.e., anti-discrimination, fair labor standards act, etc).
Know how to screen job applicants in a manner that enables the hiring of the best employees while reducing risks (e.g., claims of third parties injured by an unqualified employee).
Know how to evaluate one's job application and interview questions to avoid claims of discrimination in the hiring process.
Be able to run a background check on a candidate prior to onboarding along with any other post-offer medical examinations.
Know how to complete an I-9 form and verify an employee's eligibility to legally work in the USA.
Be able to evaluate performance of employees and provide feedback/coaching/discipline.
Understand proper procedures for investigating workplace conduct and terminating employment if required.
Understand proper procedures for executing a reduction in force (i.e., downsizing due to business conditions).
Know how to implement the shop safety standards in part 1910 of the Code of Federal Regulations (CFR) which contains the Occupational Safety and Health Standards (OSHA).
Know how to implement safety standards for vehicles that operate both on and off highway and are thus additionally subject to Department of Transportation (DOT) requirements.
Understand the Federal Motor Carrier Safety Regulations (FMCSRs) around hours of service (49 CFR part 295) and ensure compliance.
Know how to ensure compliance with part 382 of the FMCSRs regarding controlled substances and alcohol use and testing.
Know how to ensure compliance with parts 396 as well as 392 of the FMCSRs regarding inspection, repair and maintenance operations.
Know how to evaluate the cost vs. benefits of outsourcing a given process or task and how to work with partners to ensure productivity or efficiency gains.
Be able to execute change management and overcome any organizational resistance to change.
Understand the various types of labor outsourcing along with the pros and cons.
Know how to measure the effectiveness of an outsourced task or process.
Understand fundamental concepts of supply chain management including how to determine the economic order point and the value of having a just-in-time system.
Know how to account for seasonality or deviations in demand patterns by having sufficient safety stock.
Understand what the carrying costs of inventory are (e.g., cost of space, inventory support, taxes, insurance, personnel, obsolescence, interest, etc).
Be able to compute the cost-benefit of stocking big ticket part purchases relative to the cost of downtime.
Know how to negotiate prices and establish good buying habits.
Be able to utilize an inventory control system to stay on top of stock levels and purchasing needs.
Understand the key considerations around whether to use rebuilt or remanufactured parts.
Know how to effectively store inventory to maximize efficiency.
Understand the performance failure curve for components and the difference between proactive, predictive and reactive maintenance measures.
Understand the high cost of reactive maintenance relative to condition based maintenance that anticipates the needs of equipment and systematically saves money by extending the life of machines.
Be able to develop or leverage PM checklists and work with operators to get insight on what the needs of a given piece of equipment are.
Know how to read an oil analysis report and determine maintenance needs of a piece of equipment based off of it.
Be able to perform a post-mortem or a root cause analysis on any major failures.
Know how to document maintenance work on machines to maintain a clear and transparent history over the life of the asset.
Be able to prioritize and schedule maintenance work across the entire fleet (i.e., manage the maintenance backlog).
Know how to track shop productivity and uncover tasks that could be performed by other lower cost labor.
Know how to compute the appropriate number of mechanics to staff in the shop in accordance to fleet size, composition and maintenance needs.
Know how to manage overtime hours of shop staff and determine when it makes economic sense to increase headcount.
Be able to establish processes and frameworks around repair authorization as a means to control costs relative to residual value.
Track KPIs and metrics around shop productivity (i.e., equipment uptime, estimated vs. actual repair time, etc).
Establish and utilize a system for shop control (e.g. work order management).
Be able to assess what your customer segmentation looks like (i.e., who your organization is serving and what their needs are).
Know how to tailor offerings that are attractive to those segments and profitable to your operation.
Know how to build a marketing campaign to attract and retain customers.
Be able to set appropriate expectations for customers and ensure no surprises when it comes to service delivery.
Be able to empathize with customers and recover from mistakes / complaints.
Understand how to create an internal service culture and train customer facing personnel.
Know how to develop a system for capturing customer feedback to uncover opportunities for improvement.
Every company is different in how they approach recruiting and hiring new equipment or fleet managers. While some will focus on promoting experienced individuals from within the company, others will actively recruit the best talent that they can find on the market.
If you are preparing for a fleet manager job interview, here are some of the top interview questions that you should be ready to answer:
Walk me through your resume and tell me about some of the most significant results you achieved.
What attracted you to this role and why do you think you are an outstanding candidate?
Tell me about a time when you had to solve a really complex problem? Why was it a tough situation, what did you do, what happened in the end?
Tell me about a time when you made a poor decision. What was the decision? Why did it go wrong? What did you learn from that experience?
Tell me about a time when you had an ambitious goal and led a team in accomplishing it.
Tell me about a time when you had to give some really tough feedback to one of your employees. What was it, how did you communicate it and how did they react?
Tell me about a time you had to negotiate a large purchase. How did you prepare and what was the outcome.
Tell me about a time when you had to outsource a process. What was the process, what analysis did you do, what were the results.
Tell me about a time when you built a risk-management plan. What was the risk, how did you go about analyzing it, what was the outcome?
What is your experience with telematics and can you give me some examples of how you utilize data to inform critical decisions about the fleet?
How would you go about creating a plan for "greening" our fleet (i.e., reduce the climate footprint)?
What is your experience with warranties and working with OEM dealers to ensure that agreements were clear and upheld. Have you ever dealt with a warranty dispute? How did you navigate that situation.
What do you think are the most important things to avoid unplanned downtime?
Case Study / Exercise: You get a call from a site superintendent about a piece of equipment that has gone down. What do you do?
Case Study / Exercise: Let's compute the total life cycle cost per hour of operation for the following piece of equipment.
Case Study / Exercise: Here's some data, walk me through how you would determine whether to sell this piece of equipment out of the fleet vs. repowering or performing a major overhaul to extend its life.
What does good company culture look like to you? What did you do at your previous employer to help create that culture?
What do you do to get better and improve your skills as fleet manager? How do you think about creating growth and career opportunities for your direct reports?
If I asked your former supervisor what it is like to manage you, what would they say? If I asked your former direct reports what it is like to be managed by you, what would they say?
Let's say you got the job and decided to accept our offer, what would you do in your first 90 days on the job?
Like almost all jobs, the salary range for heavy equipment fleet managers varies widely by location as well as years of experience. Based on recent data for the United States, one can typically expect to earn a combined base plus bonus of approximately $78,291 to $110,949 (25th to 75th percentile).
10th percentile salary (base + bonus): $65,957
25th percentile salary (base + bonus): $78,291
50th percentile salary (base + bonus): $91,839
75th percentile salary (base + bonus): $110,949
90th percentile salary (base + bonus): $128,348
While meeting virtually over platforms like Zoom is certainly on the rise (thanks Covid-19 pandemic), there's nothing better than a good old fashioned face-to-face in-person conference to expose you to best practices and new state of the art technologies in the equipment industry.
As a fleet manager, here is a list of the best conferences to attend:
Note that there may be some other conferences specific to your region that will also be worth attending.
Becoming a great fleet manager generally requires experience and mentorship from those who have 'been there, done that' making a career search tricky for entry-level fleet managers. That being said, over the past decade there's been an uptick in courses, certifications and formal training available to help accelerate one's progression and professional development in the industry.
We talked to several fleet and equipment managers and the following courses were commonly mentioned as great opportunities to learn new skills and get exposure to best practices:
Podcasts are an easy way for fleet managers to stay on top of burning topics in the heavy equipment industry. Often there are interviews with leaders who have unique insights and perspectives and listening to them in the background at work or while commuting can help you keep up to date with the latest news and trends.
Some of our favorite podcasts for equipment managers include:
One of the biggest benefits of the internet and the rise of social media is that it has made professional networking and connecting with other equipment management professionals easy and efficient. Through social media sites like LinkedIn and using video conferencing tools such as Zoom, fleet managers can connect with one another to talk shop, problem solve, discuss best practices and push the state of the art of equipment management forward.
Below is our list of the top associations, groups (both offline and online) and online discussion forums. Note that there are also several regional associations and groups that you might also want to seek out.
Professional associations are great as they are fully vetted, have been around for decades and often offer formal professional development programs to help heavy equipment fleet managers get to the next level professionally and be more successful at work. Some of the most prominent associations include:
NAFA Fleet Management Association (If you oversee a fleet of on-highway equipment)
LinkedIn Groups can be a bit hit or miss. Some of them are great and enable individuals to connect with one another, trade knowledge and share career opportunities however some are susceptible to high amounts of marketing posts for products and services and don't deliver a ton of value.
Below is our list of the best LinkedIn Groups to join as a fleet manager:
Discord is an emerging platform for online communities. The chat occurs in real time and there are also voice capabilities to enable equipment managers to talk to one another live and contribute to active conversations. What's great about Discord is that it has a best in class mobile app for both iOS and Android that makes it really easy to stay plugged in.
If real time chat isn't your thing and you prefer the slower pace of forums, there's definitely some great options available that let you follow conversations in a more asynchronous manner. Reddit has a great Heavy Equipment subreddit with over 5500 members and Heavy Equipment Forums has over 85000 members.
Reddit's audience tends to be a bit younger so you'll find many up and coming equipment managers, operators and mechanics. Heavy Equipment Forums is a much older website so you'll mainly find individuals who have been in the industry for decades. Both offer great insight into the industry and host insightful conversations.
It's often overlooked and under-appreciated but there's no doubt that being a fleet manager requires outstanding leadership skills. So much capital is tied up in the equipment out in the field and in the yard and it's a big responsibility to ensure that a company is getting the most from its fleet as well as its equipment operations personnel.
Recently, there's been a big push to address some of the leadership education gaps within the industry. While it is still a bit hard to find programs and content specific to equipment management professionals, the construction industry more broadly is starting to see value in formal leadership training for key employees.
In conclusion, starting a career as a full-time fleet or equipment manager is no easy feat but it is incredibly rewarding. The job is always changing and forces you to learn new skills, adopt best practices and drive more efficiency. Your role is critical within your organization and the decisions you make have a direct impact on the profitability of the business.
If you're interested in learning more about how to become a fleet manager, we'd love to help. Reach out to our team at firstname.lastname@example.org.