Cutting maintenance costs: Charity Case

Manager: Gregg Crow Title: Director of distribution Fleet: Idaho Youth Ranch, Boise, Idaho Operation: 33 trucks PROBLEM The Idaho Youth Ranch (IYR) is a nonprofit organization dedicated to helping young people overcome problems associated with delinquency, abuse or neglect, and alcohol or drug abuse. A good chunk of its operating funds (about 60%) comes from a network of 24 thrift stores located throughout

Manager: Gregg Crow

Title: Director of distribution

Fleet: Idaho Youth Ranch, Boise, Idaho

Operation: 33 trucks

PROBLEM

The Idaho Youth Ranch (IYR) is a nonprofit organization dedicated to helping young people overcome problems associated with delinquency, abuse or neglect, and alcohol or drug abuse. A good chunk of its operating funds (about 60%) comes from a network of 24 thrift stores located throughout Idaho, supported by a distribution center and fleet of trucks.

About five years ago, the IYR decided to significantly expand its operation, embarking on a strategy to add two stores a year to its network while upgrading from a 20,000-sq.-ft. distribution center (DC) to a new 79,000-sq.-ft. facility. Yet the truck fleet connecting stores to the DC (and vice versa) turned out to be a very shaky link in IYR's plan.

IYR's trucks were a hodgepodge collection of high-mileage vehicles of all makes and models bought at local auctions over the years. These vehicles tended to break down a lot and required a lot of expensive upkeep, not something conducive to the critical job of picking up donations of clothing, furniture and other household and office items from residential homes and businesses; delivering them to the DC; and then supplying the stores with requested items.

“The maintenance bills that were coming across my desk were just hair-raising,” explains Gregg Crow, IYR's director of distribution, who joined the company in 2006. “Many of them had over 200,000 mi. on them and we were sending them to dealerships to get the same things fixed over and over. I looked at this and said, ‘We can't successfully expand with these trucks.’”

One problem, though, was deciding whether to buy or lease replacement trucks — and how to handle maintenance and other needs over the life of the vehicles.

“As a charitable organization, every dollar we save on the operating side goes back to the foundation we serve,” Crow says.

“That fact played a big role in our decision.”

SOLUTION

After putting out a bid to replace its fleet, IYR chose to go with a full-service lease package from Paccar Leasing franchise Trebar Paclease (also based in Boise) to eliminate the investment necessary to buy trucks, and also roll maintenance and recordkeeping work into the deal.

IYR started leasing Trebar trucks in May 2007, replacing 15 vehicles in its fleet of 33, mostly with Class 6 Kenworth T300s.

The big savings so far is from the elimination of maintenance costs and vehicle downtime. According to an analysis, IYR paid as much as 60¢ in maintenance costs for every mile traveled. By switching to newer trucks, downtime costs evaporated. “From an operational standpoint, we also don't have to play this shell game where we have to find another truck when one breaks down,” Crow says.

That allowed IYR to add two thrift store operations without increasing its operating costs at the distribution centers.

“We quickly came to the realization that we couldn't meet our growth plan without first getting a better handle on the maintenance costs for our truck fleet,” Crow says. “Also, managing maintenance bills and making sure our vehicles are DOT legal was very time-consuming for me. Now that's rolled into our lease agreement — allowing me to focus all my energy on our distribution network and growth plan.”


Maintenance Bay presents case studies detailing how fleets resolve maintenance-related issues.

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