Some fleet managers long for the days of yesteryear when operating a fleet was so much simpler. There were no engine emission technologies, few (if any) OEM computers , no third party on-board computers to track logistics routing, equipment utilization, fuel economy and other factors. It was a pretty simple world – you purchased a truck, typically ran it six to eight year life, performed preventive maintenance and repaired as best you could and operated the fleet based on intuition, experience and prior practices. The truck purchases were evenly distributed with roughly the same number of trucks being purchased and replaced each year.
Many of the so-called equipment technology advancements started in 2000 due to the Diesel Emissions Reduction Act (DERA). These environmental regulations called for new technologies like Exhaust Gas Recirculation to be incorporated into 2003 model year trucks. Unfortunately, the unbudgeted costs of the new technologies (in the form of expensive repairs, declining fuel economy and mechanical complexities) wreaked havoc on operating budgets. Amid reports of a second round of EGR technology in 2007, some fleet managers extended their vehicle lifecycle, opting for higher M&R expenses; while others contributed to the largest Class 8 pre-buy in 2006 (approximately 350,000 trucks) in the history of the industry. In addition, the “great recession” hit in 2008/2009 which further disrupted the purchase pattern, lifecycle management and operating costs. Many fleets were told by CFO “no capital for now”, run what you have!
In 2010 technology began to offer positive changes with the advent of Selective Catalytic Reduction (SCR) technology. All DERA emissions mandates were achieved and the engine performance and fuel economy improved. Since then, engines have become more reliable and repair expenses more predictable. Advancements in fuel efficiency have allowed “savvy” fleet managers to take a closer look at the management of a tractor’s holding period. With fuel economy (MPG) improvements averaging gains of 2.5% year over for the last five years, it does not make economic sense to operate trucks for six to eight years any longer; you miss out on too much valuable fuel savings opportunities. From 2011-2015 fuel economy/MPG improved by over .5MPG. In a 100,000 MPY operation, at $3.25 a gallon, this saves almost $4,000 year. Far greater savings than the incremental cost of upgrading your old truck to a new model which is about $1,200 year every 3 years.
Times were simpler, there was no empirical data to evaluate your true costs or where costs were heading. Huge economic opportunities were overlooked because they went unseen. Today’s fleet manager(s) have a whole new world of operational possibilities and a huge volume of data and technology to consider. However, where do you get the time, resources and skills to get the data organized and analyzed to come up with data driven answers and solutions? Many fleets are forming partnerships with their vendors to help supply the data analytics essential to controlling and reducing costs.
Legacy management methods have all but vanished, leaving fleet managers who were reticent to join the data-driven world in the crosshairs of a world where data is king. Data analytics brought new facts to light. Fleet managers now have concrete and actionable business intelligence that confirms that 2016 model engines are reaching MPG efficiencies never seen before. Technology and environmentalism is sweeping the transportation industry and changing the landscape of how we purchase, use and dispose of equipment. It is producing a new breed of fleet managers who are dedicated to running their trucks at peak efficiency and who believe in environmental responsibility. It is also causing many to work at the payback on improved MPG against the cost of additional investments in new trucks.