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Reduction in Fleet Costs is Temporary and Will Regress to Pre-Pandemic Levels

Reduction in Fleet Costs is Temporary and Will Regress to Pre-Pandemic Levels

The balance of calendar-year 2020 will be a time for major decisions. This includes decisions on staffing levels. Decisions on remote work versus office work. Decisions on whether a company should consider downsizing the square footage of its corporate offices due to reduced staffing needs.

June 16, 2020

Cost Variables Influencing the Commercial Fleet Market

Cost Variables Influencing the Commercial Fleet Market

Overall improved business conditions opened pent up demand for replacement units, especially in the oil sector and construction, which in the prior several years had scaled back new-vehicle acquisitions due to stagnant growth.

June 4, 2019

TCO Is Not a Static Number

TCO Is Not a Static Number

A vehicle’s total cost of ownership is comprised of its fixed costs, operating expenses, and depreciation per year or during the course of its service life, minus its anticipated resale value. During the course of a vehicle’s service life, TCO is subject to change due to a vehicle’s age and numerous external factors, which has a direct bearing on replacement policies.

March 13, 2019

Estimated 5-10% of Fleet Dollars Wasted Annually

Estimated 5-10% of Fleet Dollars Wasted Annually

While there never seems to be enough money to go around, one of the less talked about aspects of fleet management is the amount of budget dollars that are wasted every year.

January 28, 2019

Biggest Challenges Facing Vocational Fleet Managers

Biggest Challenges Facing Vocational Fleet Managers

To get the pulse of the vocational truck and van market, I reached out to a wide cross-section of fleet managers around the country to find out what’s on their minds. Here’s a snapshot of what they told me.

November 7, 2018

Extended Cycling Increases Truck Fleet TCO

Extended Cycling Increases Truck Fleet TCO

A truck’s total cost of ownership (TCO) covers a specific range of expense variables, regardless of the make or model. The four lifecycle categories that influence TCO are fixed costs, operating expenses, incidental costs, and depreciation/resale value. A key factor that drives these lifecycle categories is a vehicle’s service life.

July 28, 2018

Maximizing Utilization Maximizes Truck Revenue

Maximizing Utilization Maximizes Truck Revenue

If you want to provide added value to your company, you need to view fleet as a business and not simply an aggregation of assets to be managed cost-effectively. The fastest way to improve your bottom line is to increase fleet utilization, which increases the productivity of each individual truck.

July 2, 2018

Upward Pressure on Fleet Costs Threatens to Increase TCO

Recently, I conducted a survey of several hundred fleet managers to identify emerging industry trends. One recurrent theme expressed by fleet managers was the concern that fleet costs are starting to experience upward pricing pressures. Here's what they told me.

March 16, 2018

Fleet Operating Costs Remain Stable for Fourth Consecutive Year

Institutionalizing Cost-Control Strategies

Senior management exerts intense pressure on fleet managers to control and/or reduce vehicle acquisition and operating expenses. To accomplish this, a fleet managers can pursue three different cost-control strategies — cost savings, cost deferral, or cost avoidance. In order to implement a successful cost-control strategy you need to institutionalize the mechanisms to curb money-wasting behaviors.

May 22, 2017

Cost Control is Constrained Without Driver Buy-in

The fundamental requirements of your business necessitates minimum fleet equipment specifications that, as a result, pre-define the expense parameters from both a fixed and operating cost perspective. If you acquire vehicle assets that best fulfill your fleet application, then any supplemental cost reduction will only be based on incremental refinements The best way to achieve additional cost reduction is by modifying driver behavior.

January 1, 2017

Tires are a Depreciating Asset: 10 Ways to Slow the Rate of Depreciation

As a wear item, tires are a depreciating asset. Your job, as the fleet manager, is to slow the rate of depreciation. Replacement tires as a cost category are a fleet’s second-largest operating expense, exceeded only by fuel. By maximizing tire tread life, you lower per-mile costs, resulting in fewer premature removals and optimizing the condition of tire casings, allowing for multiple retreads.

November 21, 2016

Long-Term Impact of Longer Truck Replacement Cycles

The more expensive the asset, the longer it is kept in service; however, the need for short-term cost savings prompts some fleets to even further extend cycling parameters and defer replacements. But, what are the consequences?

July 26, 2016

Flat Fuel Prices Forecast to Extend Through 2016

Lower prices for gasoline and diesel have been a welcome relief for fleets, in some cases, reducing operating costs by 25-30 percent. While the past three years have been heaven-sent for the fleet industry overall, it has had a dramatic impact on fleets operated by energy companies, which are scrambling to cut costs to offset the decline in oil prices. The unfortunate fact of life is that one person’s fortune is sometimes another’s misfortune.

November 2, 2015

Operating Costs Flat for Third Consecutive Year

Calendar-year 2015 marks the third consecutive year that fleet operating costs have remained stable compared to the past three years, primarily due to the continuing softness in gasoline and diesel prices. Replacement tires, the second highest operating cost, were stable due to the ongoing softness in commodity prices, primarily rubber and oil, while increased maintenance intervals contributed to lower maintenance costs for fleets. The forecast is more of the same for CY-2016.

October 16, 2015

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