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Medium-Duty Truck Operating Costs Remained Flat in 2003

October 2004, by Mike Antich and Chad Simon

Medium-duty truck fleet operating costs were flat in the 2003 calendar year based on a survey of fleets operated by utilities/railroads, delivery, and service companies. Key reasons for the flat costs were a greater use of recapped tires and a lengthening of preventive maintenance (PM) intervals. These were several of the findings in a first-ever survey of medium-duty truck operating costs conducted by Automotive Fleet and survey partner GE Commercial Finance, Fleet Services, a fleet management company headquartered in Eden Prairie, Minn.

The study tracked operating cost data for 69,928 medium-duty trucks from January 2003 through December 2003. Rather than aggregating all medium-duty operating costs into a single industry-wide average, Automotive Fleet and survey partner Fleet Services broke out these costs by three industry segments as accrued by 89 representative fleets. These costs were broken out in 40,000-mile intervals up to 240,000-plus miles. Recognizing that fleet application is the primary determinant of medium-duty operating costs, costs were analyzed by industry segment.

In addition, the operating cost data in the accompanying charts does not include expenses associated with upfitted auxiliary or PTO equipment and is restricted to cab and chassis expenses involving preventive maintenance, tires, and vehicle repairs, said Mark Lueck, customer data analyst for GE Commercial Finance, Fleet Services, who developed the program to track the expenses for this survey.

Recaps Keep Tire Costs Flat
Increased acceptance of recapping has reduced tire costs in the three industries surveyed by Fleet Services. Tire recaps are less expensive than buying new replacement tires, and most tire casings can be recapped twice during their lifetime. The cost of a capped tire ranges from $80 to $250, averaging $148, while a new replacement tire costs approximately $150-$400, averaging $243. Two other reasons for the increased use of recaps are the improved quality of today’s recaps and the proliferation of companies providing tire-capping programs.

“Over the past several years, tire recapping for medium-duty trucks has become an accepted industry practice,” said Mark Stumne, product manager of maintenance and safety, GE Commercial Finance, Fleet Services. Industry-wide, an estimated 70 percent of all medium-duty trucks equipped with tires that can be capped are being recapped. On average, recapped tires have a 70-80-percent life expectancy compared to an original new tire.

PM Intervals are Lengthening
As with light-duties, there is also a trend to extend PM intervals for medium-duty trucks. Although PM intervals may have lengthened, the amount of PM work done at each interval has increased.

Most medium-duty fleets have moved away from a three-level PM schedule - A, B, and C - and instead have adopted a two-level PM schedule, called a B and C schedule.

“The B schedule is a wet PM, in which the oil is changed, and the truck chassis is lubricated and inspected,” said Stumne. Typically done annually, the C-schedule PM includes everything on the B schedule, in addition to the DOT-required inspection, which includes tires and brakes.

The A schedule, considered a dry schedule, is still used by heavy-duty over-the-road truck fleets. Although an A-schedule PM includes many variations, it typically covers greasing the chassis and inspecting tires and lights. The upcoming 2007 diesel engine requirements may drive some PM costs up due to possible increased vehicle inspections and increased oil change intervals, said Stumne. An oil drain for an average medium-duty requires replacing over five gallons of engine oil and two oil filters. *Insert Delivery Fleet Operating Costs*

Under-Spec’ing is a Problem
A primary cause for unscheduled maintenance for medium-duties is under-spec’ing. “It boils down to spec’ing the right truck for the job,” said Stumne. “If you don’t start with the right vehicle, a truck won’t achieve its expected lifecycle. There is a strong relationship between spec’ing the right components and gross vehicle weight rating (GVWR) to a truck’s total lifecycle maintenance costs. Minimizing upfront costs by under-spec’ing a truck results in faster tire and brake wear, suspension problems, and other related expenses, all leading to higher operating costs,” said Stumne.

Some fleets under-spec trucks to stay under 10,000 lbs. GVW to avoid the regulatory compliance requirements of higher GVW trucks, said Eric Strom, manager of maintenance and safety services for GE Commercial Finance, Fleet Services. Also, fleets under-spec trucks to remain below 26,000 lbs. GVW, avoiding the mandate that company drivers possess a commercial driver’s license, added Strom.

Engine Hours vs. Odometer Miles
The Fleet Services medium-duty truck operating cost survey tracked expenses only by odometer mileage and not by engine or driveline hours, said Lueck. Many industries, such as utilities and railroad, use hour meters to track PM intervals, but the use of hour meters is inconsistent between companies, which could result in inconsistent data. *Insert Service Fleet operating Costs*

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