According to a report released by the American Transportation Research Institute (ATRI), the average marginal cost per mile for operating trucks last year decreased 9.3 percent to $1.65 from the year before. But that has bucked an upward trend, where marginal costs were still 6 cents higher than three years before, indicating the costs are generally rising, and will continue to do so.
Whilst these increases also include driver wages and benefits, fuel, lease or purchase payments, permits, licenses, tolls and insurance; maintenance and repair costs can make up 10% of the total cost per mile.
And you don’t need us to tell you that the costs of maintaining fleets are rising fast. ATRI noted a main reason for this is that newer equipment is proving to be more expensive to repair and maintain. In addition, the ongoing need to recruit and retain maintenance technicians is creating additional pressure on labor costs.
The big problem with fleet maintenance is that the costs are variable and can be impacted by a number of factors, including the types of assets within your operation, the cost of parts and supplies, warranty coverage and even elements out of your control such as road conditions and the weather.
But this isn’t an insurmountable task! Here are our five top tips to get you started…
1. Improve communications among stakeholders
Your first job is to get talking! Talk with your drivers, shop supervisors, technicians, parts and outside service providers – and keep doing it.
In our experience, regular contact with everyone involved is key to a cost-effective fleet maintenance program. This will allow you to gain timely insights into vehicles, which gives you the ability to realize lower costs by being able to monitor asset use and address maintenance issues quickly and efficiently.
2. Determine the most cost-effective approach
One of the biggest choices you must face is how to approach maintenance – do you do it in-house or outsource it to a specialist? For some businesses, managing maintenance efficiently requires a mix of both practices. So what are the advantages and disadvantages between in-house and outsourcing fleet maintenance?
- Control fleet maintenance costs
- Control over vehicle scheduling
- Full quality control
- Responsive in carrying out defect management processes
- Quicker vehicle turnaround time
- Familiarity of vehicles
- Full records of vehicle maintenance
- Manage parts inventory
- In-house disadvantages:
- Availability and management of a skilled workforce
- Ongoing training costs
- Workshop operational costs
- Parts inventory and investment
- Outsourcing advantages:
- Fully trained technicians
- Pre-agreed fleet maintenance costs
- Warranty on works carried out
- Reduced capital investment in workshop building and tools
- Outsourcing disadvantages:
- Parts and service mark up
- Increase in downtime
- Limited quality control
3. Create and follow fleet maintenance programs
Repeat the mantra ‘planning prevents poor performance’. If you don’t do the simplest things, such as adhering to maintenance schedules, it can come back and bite you hard with unexpected costs.
By scheduling maintenance work this will give you predictable costs because you can plan efficiently, knowing how long a service interval will take and the parts, technicians, tools and shop space required. Planning a maintenance program – and more importantly executing it – leads to higher quality work and improved shop productivity, which in turn means lower costs.
Your role in this is to provide clear and concise instructions in the form of checklists that detail and define services that need to be performed. Use all of the information you can access, such as data from on-board telematics systems and driver reports. If you do this, it becomes easier to lower costs by making repairs during routine service intervals when they are less costly to complete.
And remember, this is not just about the fleet department. You need to involve operations personnel and asset users and get them to understand the importance of routine fleet maintenance and the maintenance department’s needs. Stress to them that it is in their best interest to co-operate because doing all of the above makes it more likely that your company’s assets are in use and earning money.
4. Managing parts inventory
We also recommend you ensure that effective parts inventory management practices are part of your fleet’s maintenance program – you need to ensure that the right parts are in the right place at the right time.
If this happens, your technicians can complete service and repair work more efficiently, thereby lowering labor costs. If needed parts are not available for maintenance or repairs, these costs will rise.
Having the right inventory for your vehicles helps ensure that they spend less time in the workshop – make sure that regularly used parts are always available and cut back on rarely used or obsolete parts.
5. Using technology to your advantage
We think one of the best ways to cope with this issue is by using fleet maintenance software – this can provide a host of data which you can interpret to find areas where your operation can improve or make savings.
To conclude, maintenance schedules should be used to manage parts, labor and all aspects of fleet maintenance operations. They form part of asset management and used correctly, become a central point for creating a fleet maintenance process that promotes efficiency and supports the bottom line.