A savvy fleet manager understands it’s important to have set schedules and utilize standardized best practices. But, is a set-in-stone truck replacement schedule the best path to follow?
It’s rare for everyone to agree on any one topic, but every single expert confirmed: Flexible replacement schedules are a must.
“While adhering to a formal cycle policy is considered the best practice in controlling total fixed and variable fleet costs, some situations may arise where replacement decisions need to be made on a vehicle-by-vehicle basis. Manufacturers moving up build-out dates, early catastrophic engine failures, and current market conditions can all play a role in deciding to replace vehicles outside of policy,” said Dale Mottram, fleet consultant for Merchants Fleet Management.
It’s important that fleet managers are always ready to capitalize on a change in the market.
“When managing a more complex truck fleet, there is a need to be flexible. But, due to the long time to build and in most cases upfit on a truck, fleet managers are often limited. There are so many factors, both internally and externally, such as corporate budget, OEM production delays, railcar shortages, etc., that can affect the schedule. To sustain long-term success, working with your fleet management company you need to anticipate factors outside of your control and create a strong plan to make sure your business operations are not affected by changing timelines,” said Ross Ingham, account manager for Wheels Inc.
Depend on the Data
Accurate data does not lie. Today’s fleet managers have more information at their fingertips than ever before.
“Compare your fleet to others in your industry, assess the cost to maintain and replace assets. Look for trends that can save you 20% of your maintenance expense. Spend more time on long-term planning than the cost to run daily. Rotate the vehicles’ routes. Buy when manufacturers are offering concessions,” said Dan Doucette, senior truck engineer for Mike Albert Fleet Solutions.
Reasons to Flex Your Schedule
There are many reasons to utilize a flexible replacement schedule.
“Unforeseen events will arise, such as a total loss incident or a major powertrain component failure, where a fleet will need to shift the replacement cycle or consider replacing the vehicle at a shorter interval versus a longer interval to avoid long-term maintenance costs,” said Demetrios Varnasidis, truck specialist for EMKAY.
Truck fleets often see the need to add or remove vehicles due to seasonal operating parameters, business growth cycles, or unexpected events.
“One of the best ways to mitigate risk associated with fleet flexing is to use commercial rental vehicles. Renting allows a company to meet its seasonal needs without adding permanent equipment. Additionally, when fleets see growth opportunities, such as moving into a new market, renting vehicles for a short period of time might be prudent while deciding on longer-term commitments,” said Jim Wood, vice president of sales for Penske Truck Leasing.
Geographic areas and other elements will impact how much a fleet can benefit from a flexible replacement schedule.
“Fleet managers should also consider flexible replacement schedules to accommodate variations in geographic operating areas such as: snow or sun belt, short or long drives to service delivery point, high idle hours for temperature control of cab, height restrictions (parking garage, loading dock, residential, or commercial destinations), to allow for differences in vehicle size/capacity/weight rating and auxiliary equipment requiring a power take-off (PTO),” said Ken Gillies, senior consultant, commercial truck solutions, CTP for Element Fleet Management.
Build Flexibility In
Flexibility should be built into every fleet plan.
“Fleet managers need to reevaluate the plan every year, and more often if factors change with the company or the market. Closely monitor maintenance and repair expenses and watch for upward trends. There are times when incentives, coupled with strong resale values, change the math,” said Jeff Krogen, AVP Fleet Strategy for Enterprise Fleet Management.
Benefits Beyond Cost Savings
A flexible replacement schedule allows a company to add or dispose of assets as the needs of their business changes.
“A flexible replacement schedule will also allow companies to continually refresh their fleet and image as well as take advantage of all the new technology that comes out every year. It also helps spread out the spend for the capital or lease equipment in small doses, in lieu of having it hit you all at once every few years,” said Ian Griffin, national account sales executive for PacLease.
Know Your Fleet
As with just about every aspect of fleet, there is no single approach that will work for every fleet type.
“There are factors that may limit just how flexible an approach may be. For example, an open-ended lease may provide more flexibility than a fixed term lease product. But, in general, having a replacement philosophy supported by an approach is certainly advisable, so long as the approach is not set in stone. A fleet manager will need to be flexible in his or her approach to take advantage of changing market conditions and new demands. There will be times where altering from a prescribed course for the near term will provide benefits,” said John Wuich, vice president, strategic consulting services for Donlen.
Do you utilize a flexible replacement schedule that works well for your fleet? Have you had a set schedule and are considering changing over to a flexible one?
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