February 2008, Automotive Fleet - Feature
Forecast of Truck Fleet Management Trends: 2008-2010
By Mike Antich
2010 Emission Standards
A new round of more stringent diesel engine emission standards will be implemented in the 2010 model-year. As was the case with the 2007 emission standard, a significant pre-buy is anticipated since the cost of the new engines is expected to increase. If past events are predictors of the future, there will be a shortage of diesel-powered trucks during the 2009 model-year as many large fleets order additional units beyond their normal replacement cycle to beat the large price increase anticipated for 2010 engines. Other fleets will try to manage their replacement schedules to delay purchase until past the effective date to avoid early problems with the new engines.
"Truck fleets will shortly commence ordering 2009 trucks and budgeting for 2010. The issue is delivery — fleet managers want trucks ordered and delivered in 2009 to avoid the higher prices for the 2010 models," said Kholsa of PHH Arval.
"As in the case of 2007 engines, a significant pre-buy is expected since the cost of the engines per OEM manufacturer is expected to rise by approximately $4,000. In addition, the operational impact and maintenance needs of nitrous oxide (NOx) absorbers, regardless of technology, remains unknown and will be uncovered only as more units go into testing and put on significant cycles," added Khosla.
The technology to meet the 2010 emission standards appears to be settling on the selective catalytic reduction (SCR) technology (urea injection system).
"The addition of the urea injection system and, most importantly, the tank, will affect the available space on a truck’s frame to mount the necessary equipment to make a work truck functional," said Gillies. "There’s potential for this tank installation, when added to the diesel particulate filter (DPF) from the 2007 regulations, to tip some applications into a longer wheelbase to gain the cab-to-axle dimension necessary to allow mounting of all the customer’s equipment. Scrutiny of the chassis and upfit specs for compatibility will continue to rise in importance to ensure no surprises when the chassis arrives at the upfitter," added Gillies.
Truck Acquisition Trends
Fleets are keeping trucks in service for longer periods. This trend is adding importance to up-front decisions in truck spec’ing, which can achieve a longer lifecycle without the related costs.
"This makes the up-front decisions when designing a vehicle very important. If the vehicle is built properly, you can achieve a longer lifecycle," said Robley. "Fleet managers have to be kept up-to-date on both product and service trends to achieve this. That’s where fleet management companies fit right in."
Another trend is that factories are selling direct to fleets, which is causing service consequences. "As manufacturers continue to move away from distributor networks, we — the fleet management companies — move toward the manufacturers who offer support," said Dan Doucette, manager, national truck lease for Mike Albert Vehicle Management. "It’s really simple. Small fleets do not have the ability to send a vehicle 140 miles away for repairs and go without the unit when doing so. It makes sense to use local suppliers when possible. The manufacturers need to get back to improving service period, regardless of where the vehicle comes from."
There is also a trend by truck fleets to use alternative acquisition methods. "Wheels has seen clients seeking out alternative means of acquiring units such as bailment, general pools, and out-of-stock units. This is mainly because of the increased need of out-of-stock vehicles due to factors such as company growth and extended factory lead times," said Dave Decker, manager of truck engineering for Wheels Inc. "Fleets are not able to wait as long as they used to for their vehicles and need to seek out alternative methods," added Decker.
Consolidation in the truck equipment industry is another trend in fleet acquisition. "Manufacturers are acquiring other manufacturers and distributors, resulting in a more consolidated industry. This consolidation is taking place with both chassis manufacturers and truck equipment manufacturers alike. There could be many impacts on fleet such as changes in pricing, lean manufacturing lead times, and product availability," said Decker.
Others see the same trend. "Many alliances are being formed in the truck industry among manufacturers and between manufacturers and component suppliers, such as transmission and engine manufacturers," said Reynolds of LeasePlan USA.