Vehicles have a limited lifetime, and the frequency of breakdowns and cost of repairs goes up...

Vehicles have a limited lifetime, and the frequency of breakdowns and cost of repairs goes up proportionately as vehicles age. Even vehicles that have provided years of reliable service will sooner or later experience component failures.

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Unscheduled vehicle downtime is not only a maintenance issue, it is also an accident-avoidance issue since, on average, 20% of a fleet’s vehicles annually incur downtime due to accidents. While many vehicle downtime events are unavoidable, downtime can be managed and minimized by adopting a proactive versus reactive maintenance program and by implementing a driver-based versus asset-based fleet safety focus.

The bottom line is you can’t change the fundamental requirements of your business, which necessitates specific asset requirements. The best way to minimize preventable accidents (and by default vehicle downtime) is by modifying driver behavior. In addition to maintenance and accident-related issues, downtime is also caused by numerous other circumstances ranging from tires damaged by road debris, to recalls, vehicles booted for unpaid tickets, to expired license tags.

The end result is that vehicle downtime negatively impacts the ability to perform service jobs, complete deliveries, or make sales calls, all of which result in a loss of productivity and revenue. Reducing downtime will reduce overall operating expenses and optimize vehicles productively, which increases fleet uptime.

Reasons for Downtime

With fleet budgets tighter than ever, it makes it imperative to track all expenses associated with downtime. However, not all fleets track downtime costs, one estimate showed only 36% of the fleets do so. Also, because there is no universally accepted industry definition of downtime for light-duty fleets, benchmarking downtime with peer fleets is difficult.

For instance, should downtime include all repair events? Or, only unscheduled events? Also, downtime metrics vary widely. Should you track cost of downtime hours per day, vehicle downtime per month, total downtime costs per event, or something else? Regardless, one thing is true, fleets generally underestimate the total cost of downtime, but it can be managed. For instance, vehicles participating in a scheduled preventive maintenance (PM) program experience about 20% fewer maintenance-related downtime days than those that aren’t.

In essence, the objective of a PM program is to ensure a vehicle is able to operate without any break in service until its next PM. A scheduled PM program helps to identify service issues before they become major problems. Follow-through on fault codes and alerts from onboard diagnostics and telematics systems will fix small issues before they become major, more costly, issues.

In addition, many incidents of unscheduled downtime can be avoided using predictive maintenance, namely forecasting when components are near the end of their useful life based on historical maintenance data rather than waiting for component failure. Developing a maintenance schedule to replace or rebuild components before the end of their expected lifecycles, fleets can offset higher expenses incurred from unscheduled downtime. Vehicles have a limited lifetime, and the frequency of breakdowns and cost of repairs goes up proportionately as vehicles age.

Even vehicles that have provided years of reliable service will sooner or later experience component failures. The rule of thumb is the older the vehicles, the more the problems and greater the risk of catastrophic failures. One analogy is with a person’s health. Approximately 80% of a person's lifetime medical expenses occur in the last years of life — a similar ratio is true with vehicles.

A vehicle replacement policy, based on mileage or months in service, allows you to systematically phase out older vehicles that have a greater propensity to have problems, which will proactively help to lower incidents of unscheduled downtime.

Another cause of unscheduled downtime is vehicle overloading. Fleet maintenance surveys consistently show that overloading is the No. 1 cause of unscheduled maintenance for trucks. When a vehicle is overloaded, its emergency handling capability is reduced, which can contribute to an accident. For instance, braking distance increases, which can cause drivers to misjudge stopping distances, and tire failure rates are higher because tires run hotter.

Hard Costs vs. Soft Costs

Downtime costs are typically broken into two categories: tangible costs of downtime (hard costs), and intangible expenses (soft costs) due to driver inactivity.

Hard costs related to downtime include lost revenue, towing charges, temporary rental, and employee overtime. Soft costs are those incurred during driver downtime such as lost employee productivity, lost revenue-generating opportunities per day, and delays in delivering the product or service your company provides to its customers.

Key components to calculating the total cost of downtime are:

  • The costs of repairs necessary to get the vehicle back on the road again. This includes the cost of labor, replacement parts, diagnostic fees, and towing costs,
  • Know the approximate compensation costs of drivers to fully calculate employee soft costs, along with employee productivity costs. When drivers are not able to work due to a vehicle problem, they cannot produce revenue. This is a lost “opportunity” cost that impacts current and prospective customers.

In summary, you need to track downtime in detail. Don’t accept "repair time" as downtime, rather downtime should extend from the moment a vehicle is pulled out of service until the driver is able to get back on the road to resume work. Sometimes, the largest expense of downtime isn’t related to the actual repair, but other related soft costs, such as employee compensation and the lost revenue generation from the product and service provided.

Fleet data analysis can identify recurring downtime issues. It’s important to determine the causes of downtime so procedures can be developed to minimize such problems in the future.

Let me know what you think.

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About the author
Mike Antich

Mike Antich

Former Editor and Associate Publisher

Mike Antich covered fleet management and remarketing for more than 20 years and was inducted into the Fleet Hall of Fame in 2010 and the Global Fleet of Hal in 2022. He also won the Industry Icon Award, presented jointly by the IARA and NAAA industry associations.

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