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Labor Rates

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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COVID-19 Offers Opportunity to Make a Dent in the Technician Shortage

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.

Upward Pricing Pressuring Fixed and Operating Costs

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.

Maintenance Costs Increase as Labor Rates Rise

Despite high build quality, vehicle maintenance costs are trending up due to increased advanced technology content, skilled labor shortages, higher tire prices, and more engines requiring synthetic oils and high-capacity oil pans.

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.

Fleet Management 2025 Forecast: Vehicle Maintenance

Most agree that many of the trends we are experiencing today will continue for the next decade; however, technology, in particular vehicle connectivity, will have a dramatic impact on how vehicles will be maintained in the future.