A trend analysis of fleet manager surveys conducted by global research firm Frost & Sullivan over the last half decade indicates that total cost of operation (TCO) calculations are now “front and center” and “top of mind” concerns for U.S. trucking companies – with driver wages becoming far more critical to TCO than in the past.
“Driver wages are now poised to be a far larger piece within TCO than fuel costs,” Sandeep Kar, global VP of automotive & transportation research for the firm, told Fleet Owner. “That’s one of the biggest trend shifts we’ve seen in the last five years.”
Lakshmi Ramanujam, one of Frost’s industry analysts, extrapolated from the firm’ fleet manager survey data how the trend focus on TCO and driver wages might influence fleet spec’ing strategies. For example:
- Demand for automated manual transmissions (AMTs) and fully automatic gearboxes is expected to climb 23% in total this year;
- Electronic stability control (ESC) systems should experience a growth rate of 12% in 2015;
- Automatic tire inflation systems for trailers should witness a 32% demand spike this year.
The focus on TCO is also driving demand for more data analytics, especially in terms of prognostic maintenance capability:
- Some 26% of the overall trucking fleet used some sort of prognostic capability by the end of 2014, with growth in prognostic demand expected to top 29% by the time 2015 comes to a close;
- About 52% of fleet managers consider engine-related diagnostic information the most valuable to their operation;
- Another 55% are interested in integrating remote/prognostic data with maintenance management system and parts inventories.
Ramanujam also determined that the mean monthly telematics subscription fee fleet managers are willing to pay per truck is around $19.40. “They are saying with this figure, ‘Give us data; data on engines, transmission, brakes, etc.,” he noted.
It’s also part of what can be called a “multidimensional value proposition,” Ramanujan said, whereby data – especially prognostics – can help fleets reduce equipment downtime, lower maintenance costs, and improve fuel economy, while making it easier for drivers to operate trucks as well.
The Compliance Safety Accountability (CSA) program developed by the Federal Motor Carrier Safety Administration (FMCSA) is also affecting TCO calculations as well, Frost’s Kar added – especially in terms of generating more need for data.
“It’s forcing fleets to maintain their equipment better,” he said. “It’s become one of the latest drivers of telematics within the industry.”