THE CAR AND TRUCK FLEET AND LEASING MANAGEMENT MAGAZINE
Fleet operating costs increased in CY-2019 due to higher PM costs, ongoing pressure to increase maintenance labor rates to address the widespread tech shortage, and higher prices for commodities to manufacture replacement tires.
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.
Most of the subject matter experts that we spoke to expect an increase in tire prices, although predicting future tire costs is difficult due to variables that influence tire pricing.
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.
Higher fuel prices and maintenance costs, along with upward pressure on maintenance labor rates are a few of the factors increasing fleet operating costs.
With the cost of fuel representing 60% of the total fleet budget, fleet managers are looking for opportunities to reduce expenditures ranging from rightsizing, route optimization, telematics, personal use, and modifying driver behavior.
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.
Fleet operating costs increased in CY-2019 due to higher PM costs, ongoing pressure to increase maintenance labor rates to address the widespread tech shortage, and higher prices for commodities to manufacture replacement tires.
A lifecycle cost analysis that incorporates a work vehicle’s productivity can lead to greater fleet utilization and decreased fleet spend.
Replacement tire prices are driven by raw material costs, which in CY-2019 were less volatile, but higher nonetheless. Tire prices increased slightly higher than the rate of inflation, which was partially offset by improvements in tread wear longevity.