Understanding Contract Maintenance Part 2

If you’ve decided that maintaining your own trucks is not one of your core competencies or you just don’t want to be bothered with all the hassle of scheduling and investments in tooling, equipment and technicians, contract maintenance may be a good option for you.

If you decide contract maintenance makes sense for you, the first thing you need to do, according to Lance Bertram, senior vice president of sales, marketing and distribution for Idealease, is “to determine historically what it costs you to maintain a vehicle. I say this because if you don’t know how much something costs you, there is no way to go out into the market and be intelligent about entertaining bids.”

He says often clients will tell him it only costs them four cents a mile to maintain a truck, “but when we start digging deeper we see that the four cents may not include key items like tires. Or if they blow an engine and have to pay $25,000 to put a new engine in, the accountant sets that purchase up on the balance sheet and depreciates it. As a result it does not show up as an operating expense.”

In addition, the customer needs to know the cost of maintenance not only for the first year but also throughout the lifecycle of the truck, Bertram says. “Once he realizes that it actually costs him 18 or 19 cents a mile, then he can make an educated buying decision.”

Bertram says Idealease has found that many customers will gladly outsource their maintenance for the same amount it costs them to do it in house because “we take all the headaches away and take all the liability and risk off their shoulders. And now he can yell at us if his truck is not ready.”

The next step is to explore companies that provide contract maintenance to see if any are a good fit for you.  “Customers need to be very forceful when talking to potential contract maintenance service providers to make sure they understand the importance of their vehicles being available as often as possible especially in light of today’s hours of service rules,” Joe Gallick, vice president of sales for NationaLease.

“If a driver is waiting for three hours for a truck to be repaired during a road service event those are three hours of service that can’t be recovered,” he adds.

One key factor in the selection of a service provider is how close are they to your locations. “You don’t want to waste a lot of time going back and forth to their facilities,” Gallick advises. Make sure to check out the company’s hours of operation. Find out if they can service your vehicles when you don’t need them and if they can assure you they will be available when you need them. “You want to make sure whoever you are considering is able to marry their servicing schedule with your needs,” Gallick says.

 Another thing to look for is a ratio of vehicles per technician. “You are looking for a lower rating,” he says. “It’s sort of like student-teacher ratio. You have a better chance of your vehicles getting greater a degree of attention and a higher quality of service if the service provider has the right staffing at its facility.”

Find out about technician certification and tenure as well as the tenure of the service supervisory personnel. “Ask about what kind of support technicians are given in terms of training and improving their skills,” Gallick says. “Can they handle things like refrigeration equipment, hydraulics and welding? You want to make sure they can fix the types of problems your fleet faces.”

The last thing Gallick suggests you ask about is a service management tool. “Do they have tools that provide visibility into the maintenance history on the vehicles from cradle to grave? Having visibility to that data help you when making vehicle replacement decisions.”

Bertram believes fleets are better off choosing larger firms to handle their contract maintenance. “As a larger entity we buy millions and millions of dollars of tires every year so we are going to get a better tire price than Joe’s Garage down the road. We [and other large entities] are able to demand the best price from suppliers and then we pass that saving on to our customers.”

If your traveling over-the-road, you’ll want to choose someone who has “the breadth and wherewithal to handle your truck no matter where it goes down,” he says.

Bertram’s final piece of advise is to make sure you understand exactly what is covered under the contract and what is not so they’ll be no surprises.

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