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Five factors — vehicle complexity, unscheduled maintenance, parts delays, inflation and labor costs — have contributed to double-digit price increases.
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Discuss the top reasons why maintenance costs have increased in this week's State of the Fleet Industry video.
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There is lot of uncertainty about the timeliness of deliveries of 2023 model chassis earmarked for upfitting. Many fleet managers still have fresh memories of the inconsistent delivery of chassis to upfitters during the 2022 model-year.
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One key reason for a current shortage of service technicians is the result of the flat-rate compensation plan, a contentious payment system that assigns standard times to complete a repair job. Many technicians assert that the flat-rate compensation plan under-compensates them in relation to other industries requiring similar skillsets.
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A tech’s pay is determined by the type of job and whether they can complete the repair in less time than specified by the flat-rate, which will allow them to increase their work volume.
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Now is when the fleet industry should be proactively identifying these future technicians. The fleet industry has a window to tap into this idled labor pool, who will look attractive to other industries experiencing labor shortages leading to increased competition to recruit this talent.
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Higher labor costs will continue to increase the maintenance spend for routine repairs in 2020, especially at service facilities located in high-cost-of-living metro areas.
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Fleets are being impacted by a variety of inflationary pressures ranging from higher acquisition prices due to the proliferation of onboard safety equipment, to increased material costs pushing up pricing on parts, upfits, and replacement tires.
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The robust economy is creating record numbers of new jobs and a subsequent labor shortage that is being exacerbated by the large wave of Baby Boomer retirements, but some see uncertainty of future market conditions.
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More complex vehicle technology, higher labor rates due to the ongoing skilled labor shortage, higher tire prices, and increased use of synthetic motor oils are putting upward pressure on overall fleet maintenance costs.
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