Five factors — vehicle complexity, unscheduled maintenance, parts delays, inflation and labor costs — have contributed to double-digit price increases.
A tech’s pay is determined by the type of job and whether they can complete the repair in less time than specified by the flat-rate, which will allow them to increase their work volume.
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.
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.
The robust economy is creating record numbers of new jobs and a subsequent labor shortage that is being exacerbated by the large wave of Baby Boomer retirements, but some see uncertainty of future market conditions.
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.
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.
The Fayetteville (N.C.) Public Works Commission has been charging the city up to 44% in markup and administrative charges to service the city's vehicles, according to an internal audit.
Direct labor can be summed up as time on task, or any time spent doing a specific task or repair. The work order is open, and as soon as the technician clocks in to perform preventive maintenance, for example, that counts as direct labor. The issue of monitoring and managing indirect labor costs is important because time is so important to fleet management.
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