A variety of factors converged to exert upward pressure on preventive maintenance costs, such as longer vehicle service lives due to limited product availability, the ongoing transition to synthetic oils, and higher labor rates to attract scarce technicians.
Part and labor prices have increased 4-8%, while part and labor availability have decreased. Due to difficulties sourcing replacement vehicles, fleets are keeping units in service longer. This caused repair spend to increase in 2021.
Many tire OEMs have increased prices in CY-2021, ranging from 3-10% depending on type of tire and size. Higher commodity prices and increased ocean freight rates are being passed on to end users as OE profit margins compress.
Many factors converged to exert upward pressure on PM costs, such as longer vehicle service lives due to limited product availability; the ongoing transition to synthetic oils; and higher labor rates to attract scarce technicians.
During calendar-year 2020, fleet maintenance expenses declined year-over-year compared to CY-2019, primarily driven by the COVID lockdowns and customer restrictions on allowing visitors on company premises. In addition, vehicles were under-utilized resulting in unintended additional problems such as flat tires, dead batteries, and rusting brakes.
Truck fleet drivers have a significant impact on a fleet’s maintenance costs. Ensure drivers are involved in truck maintenance and spell out fleet policies.
Average repair cost per unit increased in 2019, primarily due to higher labor rates. Also, PM costs were up as more units require more expensive synthetic oil. Tire price per unit, on average, increased 3% in the past 12 months.
The ongoing trend of increased costs per service will continue as more and more vehicles requiring conventional oil are taken out of service and replaced with models that require synthetics.
The vehicle maintenance and repair industries are experiencing a skilled labor shortage as technicians in the Baby Boomer demographic retire in greater numbers than those replacing them. The skilled labor shortage requires shops to pay more for skilled technicians, which translates into higher shop labor rates.
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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