Medium-duty trucks, often considered Class 3 through Class 6 (sometimes encompassing up to Class 7 units), are the backbone of the work truck fleet.
These trucks are used for hauling heavy loads, working in more extreme conditions, and often require specialized equipment needs. Managing the lifecycle of these medium-duty trucks requires a slightly different approach than their light-duty counterparts.
Lifecycle Management Challenges for Medium-Duty
Managing medium-duty trucks can present unique obstacles.
“Some added obstacles may include vehicle acquisition costs, remarketing challenges, and data availability,” said Alexander Walker, sr. data strategist for Donlen. “The simple fact that medium-duty trucks are more expensive to acquire than light-duty trucks may result in financial planning and cash flow challenges. It can be more difficult to raise and budget for needed capital. Additionally, companies that lease these assets may use lease products similar to a fixed-term lease (FTL), which may lock that truck into a fixed asset life, dictating when replacement will occur.”
Additional challenges include higher overall costs.
“Medium-duty has higher upfront costs resulting from higher chassis and upfitting expenses, as well as higher maintenance and downtime expense,” said Collin Reid, truck strategic consultant for Element Fleet. “The balancing act between fixed and variable costs is still similar for medium-duty and light-duty trucks, but for medium-duty, both fixed and variable costs are much higher and impact the business even more.”
The same overarching principles still apply when looking at medium-duty units compared to light-duty counterparts, but you need to account for the equipment and upfits.
“In many cases, the potentially significant cost of the upfitting/equipment will influence the lifecycle with units likely remaining in service longer due to the larger capital investment. With the extended lifecycle in mind, you’ll need to plan accordingly and strictly adhere to proper preventive maintenance schedules to extend the unit’s useful lifecycle,” said Ed Powell, manager of business intelligence & analytics for ARI.
When conducting a lifecycle analysis for medium-duty trucks, one needs to consider the cost of upfitting.
“Often, with expensive upfitting, a fleet is forced to run their vehicles longer and outside optimal cycling terms to ensure they account for the upfront costs associated with upfitting. Running vehicles past the optimal cycle period can lead to more non-preventive maintenance (PM) cost and vehicle downtime expense,” said Eric Miller, CAFM, senior fleet consultant for Merchants Fleet.
TCO must also be reviewed regularly to evaluate the optimal replacement timing.
“This not only applies to new vehicles going out, but to vehicles already in operation. It’s important to determine if it’s time to pull a vehicle out of service ahead of schedule to take advantage of market conditions or technological and safety enhancements. Consulting with drivers is also essential to ensure vehicles are spec’ed appropriately for their current and forecasted usage,” said Jeff Krogen, assistant vice president of fleet strategy for Enterprise Fleet Management.
Lead times can be a challenge with both light-duty and medium-duty trucks but add in the aftermarket, and things become much more complicated, Krogen added.
End-of-life also presents challenges for medium-duty assets.
“Remarketing outlets may be less available than those used by light-duty trucks. Medium-duty truck size and limited use may also present remarketing limitations. A truck remarketing specialist with an understanding of sales outlets may be required,” Walker noted.
Finally, there fewer medium-duty truck options than light-duty trucks.
“Furthermore, medium-duty trucks are less likely to be utilizing telematics data. This means there is less available data to use for lifecycle analytics,” Walker added.
Tips for Managing Medium-Duty Lifecycles
Improving the lifecycle management of our medium-duty units is necessary. Getting started can be tough, but one recommendation is to use data to show the best replacement cycle.
“Stagger the replacement of your fleet; it’s easier to replace 20 trucks per year than 100. Know the OEM requirements for load and tow capacity, maintenance costs, and order lead time,” said Dale Jewell, director, North American maintenance for Emkay.
In addition to adhering to proper preventive maintenance schedules on the vehicle itself, the same is also true for upfit components and equipment.
“The best advice I can offer is to ensure your maintenance strategy is tailored to service those items as well to keep them in top operating condition. Also, be sure to keep data on the upfit service records. This information is beneficial when assessing the total cost of ownership for your vehicles, allowing you to further optimize your lifecycle parameters,” said Powell of ARI.
The operational impacts on older medium-duty trucks are even greater to the business than they are for light-duty trucks, noted Reid of Element Fleet.
“When medium-duty fleets allow the age of their fleet to grow too high, the field operations team will focus a lot more attention on how to fix trucks instead of how to better serve customers,” he said.
Getting the most out of your upfits is also vital advice.
“Consider upfitting that can be transferred from an older vehicle chassis to a new chassis, as upfitting components tend to have a much longer useful life than a vehicle chassis/engine. By doing this, the fleet is only paying for upfitting over one vehicle’s term with minor transfer and reconditioning cost during chassis replacement,” said Miller of Merchants Fleet.
Planning is always important, but when it comes to medium-duty, it’s critical for success.
“Fleet managers should work with their fleet management partner and truck dealer to choose the right specs for the job and for total cost of ownership. They should also work with their fleet management partner and aftermarket vendors to help avoid unnecessary costs and delays,” said Krogen of Enterprise Fleet Management.
Proper financial planning, including a sound own-versus-lease strategy, can work to overcome financial challenges, noted Walker of Donlen. “Where leasing is used, choosing the right lease product that is aligned with replacement strategy will also be key,” he said.
The end-of-life sale is a key component in a vehicle’s lifecycle and largely impacts the final total cost of ownership.
“Concerning remarketing, utilizing a remarketing specialist and/or aligning with a strong fleet management company that understands the unique truck space can make a difference,” Walker added. “Finally, keep detailed records of truck maintenance and utilize telematics to gain insights.”
Trends for Medium-Duty Trucks
In terms of trends of the medium-duty trucks, fleets are increasingly more careful about the size and weight needs of their trucks and looking for ideas to better meet those needs, noted Reid of Element Fleet.
“Additionally, the manufacturer offerings have changed significantly since 2010, and clients are looking for help understanding the right options,” Reid added.
As previously noted, data is essential in managing lifecycles.
“One new and continuing trend concerns the use of more data to manage lifecycles and make data-driven management decisions. Use real-time dashboards to understand the readiness and availability of your trucks, historical and projected costs, and key performance metrics,” recommended Walker of Donlen.
Recycling upfit components, as mentioned, is also becoming common.
“The recycling trend is influenced by increasingly expensive and complex upfit requirements and vehicle chassis costs,” said Miller of Merchants Fleet.
Powertrains are always an area of interest for medium-duty trucks.
“For several years now, gasoline engines have been the favored option for most vocational applications , and that preference continues to dominate the segment to an even greater percentage,” said Powell of ARI.
The time it takes a vehicle to get to you from the time it is ordered to the time it goes through any specialized equipment or upfitters has a massive impact on a fleet’s downtime.
“Many fleet managers are becoming impatient with extended lead times for both the chassis and bodies and are looking for pre-built options instead. They risk settling with the wrong setup for the job, which can hinder efficiency and create safety concerns,” said Krogen of Enterprise Fleet Management.
Finally, like other segments, the medium-duty truck market is benefiting from increased technology and safety features.
“Design features continue to improve and provide benefits to drivers,” Walker said.