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Global Economic Recession Cuts Fleet Operating Costs

Fuel costs, the largest fleet operating expense, declined dramatically in the 2009 calendar-year due to a sharp decline in worldwide consumption. Also, many fleets have downsized, which contributed to a lower overall fuel spend.

November 2009, by Mike Antich & Lauren Fletcher

For a PDF of the complete article, including charts, click here.

The biggest impact on fleet operating costs for calendar-year 2009 has been the stabilization of fuel prices. Fuel prices have declined dramatically from astronomical highs in 2008. The global economic recession has been a key factor for downward pressure on fuel prices, which caused worldwide fuel consumption to drop sharply. In addition, the deep economic recession forced many fleets to downsize, due to widespread corporate layoffs contributing to a decrease in overall fuel spend.

Although replacement tire costs are flat, the consequence of fleets keeping vehicles in service longer has caused fleets to acquire an extra set of tires, an expense they otherwise would not have incurred. Another consequence is that operating vehicles at higher mileages has caused fleet maintenance expenses to increase. One caveat is that fleet downsizing (due to staff layoffs) has allowed fleets to redistribute unassigned lower mileage units and remarket those with higher mileage. For these fleets, this resulted in a decline in high-end maintenance expenses that occur when units reach higher mileage thresholds.

These findings and others were revealed in AF's annual operating cost survey by data provided by survey partners: Automotive Resources International (ARI), Emkay, GE Capital Fleet Services, LeasePlan USA, PHH Arval, and Wheels Inc. This year's survey is based on analysis of actual operating costs incurred by 815,252 vehicles operated by commercial fleets and managed by these six fleet management companies.

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