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Maintenance’s Role in Reducing TCO

TCO — total cost of ownership, or total cost of operation, depending on whom you talk to — is a big focus of fleets today. They are looking beyond what a truck costs to purchase, to what it costs over its useful life.

Lots of things factor into the calculation:

  • Equipment cost
  • Fuel
  • Driver’s wages and benefits
  • Tolls
  • Licensing fees
  • Insurance
  • Replacement parts
  • Maintenance and repairs

While fuel costs are at the top of the list, according to the American Transportation Research Institute’s An Analysis of the Operational Costs of Trucking 2015 Update, repair and maintenance costs represented 15.8 cents per mile of the vehicle-based costs in 2014 for the fleets surveyed in the report.

Even though the overall age of the fleet decreased in 2014, according to ATRI, maintenance and repair costs went up likely because of the increased complexity of the newer vehicles and the fact that the shortage of diesel technicians has driven up wages.

Some of the costs incurred to operate a truck are beyond the fleet’s control. Sure, fleets can negotiate fuel prices, but that is usually in a small range; the truth is, fuel prices are not an area where fleets have much control.

Repair costs, on the other hand, can be controlled. And the best way to do that is with a rigorous and consistent preventive maintenance program. Regular PM inspections and service are likely to uncover problems as they begin to develop, and that’s when they are cheaper to fix and less likely to cause collateral damage.

It’s no secret that unplanned downtime from on-the-road breakdowns is extremely expensive because the fleet has less options for repair and may be unable to get the truck back to a preferred service provider. In addition, delivery windows may be missed, adding to the cost of the breakdown.

Deploying a system that tracks when PM service is due and notifies you about upcoming PM service milestones can make a significant difference in your TCO if it allows you to find and fix problems in their early stages.

You’ve all heard the expression. “You can pay me now or pay me later...” Spending money now to monitor your PM compliance will ensure that you’re paying less later for your repair costs and in the process, lowering your TCO.

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