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Market Trends•by Mike Antich•March 16, 2010

More Salespeople on the Street Pitching Reimbursement

Reimbursement has re-emerged as a fleet issue. One reason is that Runzheimer has a rival, which means two competitive sales forces are aggressively selling vehicle reimbursement programs. Also, the recession, corporate downsizing, funding/credit constraints, OEM viability, and economic uncertainty have renewed senior management's desire to re-examine reimbursement.

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Market Trends•by Mike Antich•March 9, 2010

Fleets Reassess Amortization Rates

In the commercial fleet industry, the most common amortization rate used for establishing a depreciation reserve is 50 months. Recently, some major fleets extended amortization rates on new-vehicle orders.

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Market Trends•by Mike Antich•March 2, 2010

Maintenance Costs Up Due to Frequency of Repair Increases

Maintenance costs increased in 2009 due to higher cost of replacement tires, PM oil changes, and labor rates. However, the biggest factor was widespread deferment of vehicle replacement, resulting in the operation of older units.

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Market Trends•by Mike Antich•February 18, 2010

Short-Term Cost-Cutting Strategies Backfire in the Long-Run

The new reality of a tighter corporate operating environment has forced fleet managers to pursue two different types of cost-cutting goals - cost deferral and cost elimination. However, many cost-cutting decisions for fleet are made for the short-term, with very little consideration for total cost of ownership. Sometimes senior management is more interested in the fiscal, rather than economic, consequences of their decisions.

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Market Trends•by Mike Antich•February 2, 2010

Morgan Stanley & Goldman Sachs Forecast $100-per-Barrel Oil in 2011

Goldman Sachs was the first to forecast a $100-plus-per-barrel crude oil price when the bank issued a research report last November, which called for a $110-per-barrel average price for West Texas Intermediate (WTI) crude in 2011. Morgan Stanley released a similar report in January and targets $95-per-barrel of WTI futures by December 2010, with an average price of $100 per barrel in 2011.

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Market Trends•by Mike Antich•January 25, 2010

Fleets are Facing an Era of Higher Taxation

In 2009, of every $100 spent on fleet, $5 was consumed by taxes. This compares to $4.10 in 2006 and $3 in 1983. The recession has caused sales and property tax revenues to plummet creating widespread shortfalls in government budget funding. States and other governmental jurisdictions are scrambling to find new ways to generate new tax revenues. Again, commercial fleets are in their cross-hairs.

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Market Trends•by Mike Antich•January 8, 2010

The State of Commercial Fleet Management in 2010

There continues to be economic uncertainty among fleets manifested by extended cycling, right-sizing initiatives, and intense pressure to control costs. The consensus is the worst is behind us, but 2010 will be a tough road.

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Market Trends•by Mike Antich•January 4, 2010

Fleet Predictions for the 2010 Calendar-Year

Barring the occurrence of unforeseen calamities beyond our control, here are my predictions as to how current fleet industry trend lines will play out in the next 12 months.

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Market Trends•by Mike Antich•December 22, 2009

State of the Fleet Market Outside North America

The global economic downturn created havoc in the fleet markets in Europe, Australia, Latin America, Asia, and Africa. Here's a summary of each of these regional markets and a forecast of what to expect fro 2010 based on a recent meeting in Barcelona with lessor representatives from each of these regions.

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Market Trends•by Mike Antich•December 1, 2009

A ‘Cash for Clunkers Program’ for Work Trucks

Turnover in diesel fleets happens slowly. The average service life for a medium-duty truck is 5-10 years, while a short-haul owner-operator heavy-duty truck typically has the lifespan of 18-20 years. Despite the 2007 and 2010 diesel emission standards, tens of thousands of older, dirtier trucks will remain on the road into the next decade. Is there a way to accelerate the turnover of pre-2007 diesel trucks? One way is a Cash for Clunkers program specifically for work trucks.

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Market Trends•by Mike Antich•November 17, 2009

Deferring Vehicle Replacements is Counter-Productive to the Intended Goal

During economic uncertainty, senior management demands expense reductions and limits capital expenditures. Since fleet is usually among the top 10 corporate capital expenditures, there is pressure to defer vehicle replacements. However, this cost-containment strategy misses the point that all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is replaced. Cost reductions in acquisitions are often offset by rising costs elsewhere.

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Market Trends•by Mike Antich•October 30, 2009

Shareholder Pressure for Carbon Disclosure Puts Corporate Fleets in the Cross Hairs

A record number of resolutions were filed during the 2009 proxy season by investor groups to get companies to voluntarily disclose data about their "carbon footprints," which includes the greenhouse gas (GHG) emissions caused directly and indirectly by their operations. These investors argue companies that disclose and mitigate GHG emissions will be rewarded with higher valuations and a lower cost of capital. At many companies, fleet represents a sizeable percent of their carbon footprint.

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