Fleet-service provider communication is a critical factor in keeping freight moving and on-schedule. When it comes to third-party maintenance and repair service, it is often not performing needed repairs and maintenance that is the problem. It is the communication process of authorizing the work that’s the roadblock.
Recognizing the importance of fleet-service provider communications, the TMC launched its S.16 Service Provider Study Group to develop recommended guidelines for fleet-service provider business practices. To date, the group has issued, or nearly completed, a dozen TMC Recommended Practices (RPs) – voluntary practices that assist equipment users, vehicle/component manufacturers and other industry suppliers in the maintenance of commercial vehicle equipment – to improve fleet-service provider interaction.
This column is the beginning of a series that will put the spotlight on this study group’s thought leadership in this area.
Expectations Defined
In today’s business environment, it is important to build new business relationships with third-party service providers based on communication, performance, trust and accountability. In the course of creating these relationships, one essential element is defining the expectations of both parties to ensure mutual satisfaction of the service experience.
The first best practice the S.16 Study Group completed in this area was a template for establishing a business relationship between a fleet and a third-party maintenance provider, entitled TMC RP 535, Template for Establishing Fleet-Service Provider Relationships.
The template consists of six central areas of interest that fleet and service providers connect upon for communication standards that have been in place. These areas, which ensure the agreement and mutual arrangement is foreseen by both parties so experience and contextual argument are serviceable, are:
- Contact Information – Reports an abundance of information from each party, including vendor/fleet name, address, contact name and ways to contact individuals.
- Repair and Maintenance Services Required/Available – Specifies the services required by fleet and available by vendor. It is a commitment wherein both agree to the specified service the fleet requires and the vendor to have available for the business relationship.
It is also an authorization statement that includes technician certifications, warranty providers, estimates and purchase order requirements, along with fleet contacts for authorization to approve repairs.
- Pricing – One of the most important areas of fleet-service provider communication, pricing is sectioned by labor, parts, discounts and waste disposal and shop supplies. These subparts distinctively describe the many areas of most important business relationships: exchange of costs.
“Labor” costs, for example, include labor rate, effective date of that labor rate, posted labor rate adjustment, determination of labor time and variable labor rate billing by skill level of technician required for repair.
“Parts” describe in which way parts price structure is used and the manufacturer’s suggested list or published fleet price.
These two entities can change the final cost by a large amount due to the availability or relationship the service provider has with the fleet. Are any discounts offered off of the final invoice amount? Labor and parts, depending on volume or prompt payment, can lessen the bill by individual discount programs.
“Waste disposal” and “shop supplies” are expenses, but most of the time they are not accounted for due to additional charges. Yet, it is these charges that sum up a repair cost to an expense over what was discussed.
- Billing and Invoicing Information – Addresses the account for receivable/payable information and made valid by the template’s Contact Information. It also asks for the standard warranty offer for the repair, a very important detail for billing direction.
- Certifications and Representations – Asks three important questions for the service provider:
+ Is the service provider I-9 compliant? (Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the U.S.)
+ Does the service provider have hazardous waste disposal certification?
+ Does the service provider have liability insurance coverage certification?
The answers to these questions may deter fleets from using certain vendors where business relationships fall short due to assuming third-party certifications and representations.
- Sublet of Repairs and Services – Covers occasions where a vendor needs to use another service provider because it cannot perform the repair. It also identifies the sublet repairs and services allowed, and makes both fleet and service provider aware of the limits of its use.
Kenneth Calhoun is the current chairman of TMC’s S.16 Service Provider Study Group and vice president of customer relations for Truck Centers of Arkansas (www.truckcentersar.com), a full-service dealership with headquarters in North Little Rock, Ark. TMC is North America’s premier technical society for truck equipment technology and maintenance professionals (www.trucking.org/Technology_Council.aspx). It is a part of the American Trucking Associations (www.truckline.com), the largest national trade association for the trucking industry.
