Commercial fleets have many opportunities for mishaps in terms of procuring and maintaining equipment. One of the biggest faux pas a carrier can make is having a standard spec regardless of duty cycle and operating region. A proper spec, however, can help fleets lower their maintenance costs and total cost of ownership.
As vice president of maintenance for A. Duie Pyle, Dan Carrano ensures Pyle’s operations teams have the proper equipment to efficiently deliver freight. This entails procuring, purchasing, and maintaining all rolling assets.
Pyle is primarily a northeast less than truckload (LTL) and dedicated carrier, which in many areas operates on aging infrastructure that was not built for today’s trucks, Carrano pointed out. That means equipment must be spec’d and maintained accordingly.
“You need to know how the truck is going to be used,” he advised. “If you are spec’ing a tractor, you need to know what type of trailers are being pulled by the tractor. What is the payload? What is the duty cycle? Is it low mileage/stop-and-go in an urban environment, or is it predominately used for a high mileage, linehaul application? This kind of information will help determine many aspects of the specifications of the vehicle.”
When possible, however, Carrano pointed out that it’s a good practice to keep specifications similar to reduce inventory and prevent training service technicians on too many different manufacturers’ products.
“After determining what non-proprietary components work best for our fleet, we spec those same components or brands across all vehicle makes,” Carrano explained. “This helps with negotiating the cost of replacement parts, simplifies warranty processing, and facilitates partnerships for enhanced support from manufacturers.”
Overall, it all starts with a proper needs assessment to fully understand a fleet’s operations, requirements, and expectations, explained Nic Signorini, Ryder’s senior director of strategic sourcing and supply management.
Asset efficiency and lifecycle
Brian Holland, president and CFO of Fleet Advantage, a truck fleet equipment financing firm, emphasized the importance of spec’ing for the efficiency of the asset with duty cycle in mind. Rather than having a standard spec in place, Fleet Advantage works with commercial truck fleets to tailor that spec to not only meet specific duty cycles but to maximize fuel economy and lower maintenance costs.
“For many years sweating the assets was an acceptable strategy, but today with the improvements in fuel economy and the rising cost of maintenance, it’s significantly more efficient and cost effective to run a shorter lifecycle,” Holland said. “Those savings that you get from an operational side and maintenance outrun the cost of recapitalizing the asset.”
Fleet Advantage will typically advise fleets to spec a truck to run about 450,000 miles depending on the duty cycle. That could also help them sell their retired equipment in the used truck market, so keeping that equipment well maintained is key, Holland added.
Patrick Gaskins, senior vice president of Corcentric Fleet Solutions, which offers fleet analytics services, also emphasized the importance of understanding the residual value of the asset.
In addition to helping fleets procure tractors, trailers, tires, and other parts, Corcentric, like Fleet Advantage, helps trucking companies identify the optimum lifecycle for each asset in their fleet. The company offers a cradle-to-grave remarketing program for trucks, trailers, and other heavy-duty fleet equipment.
Companies like Corcentric and Fleet Advantage work with fleets to determine a detailed total cost of operation analysis for each vehicle based on the natural aging of and use of assets.
“It’s not a one-size-fits-all program,” Gaskins explained. “But if you really do your homework, then you can set yourself up for a five-plus year view of what assets you are going to need to replace over that period of time.”
Replacing assets in today’s market, however, has been quite the challenge. Order boards are full, while supply chain challenges are stifling OEM production. The result has been many companies holding onto equipment a little longer than they may have initially anticipated.
Utilization and maintenance
Because of commodity costs, raw material shortages, and pent-up demand for new truck orders, many fleets won’t be able to get the trucks that they need this year. As OEMs do what they can to increase build rates, any demand leftover from 2021 is expected to roll into 2022.
The pivot and the short-term fix here, according to Gaskins, is hanging onto a truck until a carrier can procure a new one. However, as fleets extend vehicle lifecycles, they end up increasing operating expenses. Gaskins advised implementing a five-year plan to work with suppliers and commit to a certain level of spend to obtain committed slots from OEMs.
“That’s the big shift,” Gaskins said. “There’s no longer ‘buy a truck and in 90 days from now you get it.’ Honestly, that was a poor business practice in and of itself anyway because you’re really just reacting to business expanding rather than planning ahead.”
Logistics provider Transervice, which manages approximately 25,000 pieces of equipment in 120 regional facilities across North America, has been advising its fleet partners that would normally be turning in equipment to make an assessment and determine if an asset can be utilized a little longer.
Gino Fontana, Transervice’s chief operating officer and executive vice president, explained that the company also is advising customers with a “surplus” of equipment to consider selling those assets to other fleets in need.
“Transervice as a whole may have 10 different customers in the mix that are in some form of trying to get equipment or offload equipment,” Fontana said. “We are trying to put a matchmaker wherever that is possible.”
He added that maintenance costs will also rise as vehicles operate across higher mileage bands than they were initially spec’d for.
Due to the current environment, Claude Ricciardi, national director of purchasing for Transervice, stressed the importance of paying particular attention to preventive maintenance (PM) schedules to keep equipment running.
Fontana also pointed out that utilization of equipment, which might often be overlooked, is critical to keep an eye on in today’s volatile market. Depending on the location, Transervice customers typically have equipment that is more heavily utilized compared to other assets, Fontana noted. That, he said, puts higher demand on that higher utilized piece of equipment, which racks up more miles and PM intervals, and tires, brakes and other components wear out faster.
Fontana advised fleets to look across their network of equipment and balance that utilization by putting equal loads across all equipment rather than “beating the daylights out of” certain pieces of equipment while other assets sit idle.
Fleet Advantage’s Holland also emphasized the importance of maximizing the utilization of an asset and thoroughly understanding the different specs needed for distinct duty cycles and geographical areas.
“Utilization is important,” Holland said. “Instead of just focusing on one component of the operation, we look at a lot of different metrics and the optimal point of when fleets should be cycling out the asset.”
Holland added that, in general, fleets are also putting greater emphasis on shorter PM intervals to help mitigate the rising cost of maintenance. “Maintenance is not only costly, but it also impacts driver satisfaction when equipment is down,” Holland said.
At Pyle, Carrano tailors the company’s maintenance programs to each vehicle manufacturer and factors in the duty cycle to schedule equipment for PM inspections.
“You never want to just cut and paste the same spec year after year,” Carrano stressed. “You need to stay informed and have frequent conversations with your distributors and manufacturer sales representatives to keep your vehicles’ specs current and optimal.”
