Fleet managers across the trucking spectrum – from for-hire to private and on-highway to vocational operations alike – say they focus on one single metric when it comes to adopting new equipment and/or technology: reduction of operating expenses. That’s the finding of an industry-wide tracking survey conducted by Frost & Sullivan earlier this year.
The study, appropriately titled 2010 U.S. Fleet Managers Desirability and Willingness to pay for Advanced Truck Technologies, focuses on key powertrain, chassis, safety, telematics and regulation compliance technologies that are offered currently to U.S. truck fleet operations.
“The common theme among the fleet managers we interviewed, regardless of their type of trucking operation, is that they’ll invest in anything that reduces their operating expenses, even if it means paying higher upfront costs to get it,” Sandeep Kar, global program manager--commercial vehicle research for Frost & Sullivan, told Fleet Owner.
“We also found that fleets use their own metrics to calculate payback, be it from lubricants, hybrid vehicles, safety technologies, telematics, etc.,” Kar continued. “It’s not just about ROI [return on investment] figures; fleet managers look at reliability, regulation compliance support, life-cycle cost, brand name, innovation and supplier support among many other factors that lead them to choose one system [or product] over another.”
Frost & Sullivan said it interviewed managers at the largest Class 6-8 fleets across the U.S for its tracking study, with 46% of them employed in for-hire operations, 47% with private fleets, and 39% with vocational fleets.
Roughly 69% identified themselves as fleet managers, with 29% using the title maintenance or service manager. About 77% said they help influence vehicle spec’ing and purchasing decisions, with 67% saying they make the final purchase decision, according to Kar.
Kar contends that with technologies such as selective catalytic reduction (SCR), hybrid trucks, advanced lubricants, automatic/automated transmissions, remote diagnostics and prognostics, navigation-based fuel efficiency optimization, tire pressure monitoring systems (TPMS), and electronic stability control (ESC) receiving high marks from fleet managers for familiarity, desirability and interest proves that the advanced truck technologies market will help drive revenue growth opportunities for truck OEMs and system suppliers alike.
“Take powertrain technologies,” sadi Kar. “You’d expect fuel-efficiency gains to be at the top of the expected benefit list. Reduced vehicle downtime for maintenance, however, tops the list, followed by fuel economy improvements. That says that fleets are becoming more and more interested in total cost of ownership ,and not just upfront cost or fuel-economy benefits.”
The fleet managers also disclosed their ROI and payback expectations from hybrid trucks, he added, noting that a sizeable proportion of surveyed fleet managers said they are interested in such vehicles if they can derive a payback within four years.
“The recent fuel price volatility, strengthening regulatory environment, and applicability of advanced truck technologies in enhancing fleet’s fuel efficiency, reducing emissions, increasing safety, and improving mobile resource efficiency have all contributed to the higher levels of traction these technologies are achieving among fleet managers,” Kar said.
Other data shows fleet minds are changing about other technological advances, too. Some 73% of the fleet managers polled said they have automatic and/or automated transmissions on their trucks. Adoption rates for battery-powered auxiliary power units (APUs) are also on the rise among the respondents surveyed.
But safety technologies are experiencing perhaps the most rapid turnaround in acceptance by the fleet community, Kar noted. The use of TPMS jumped from 20% to 40% among those fleets surveyed, with tractor stability control technology climbing from 11% to 31%, trailer stability control from 6% to 18%, and blind spot detection technology from 11% to 21%. Collision warning systems marked the largest year-over-year jump, from 3% to 13% – a more than four-fold increase.
Telematics offers another interesting window into the minds of fleet managers where costs are concerned, Kar said.
“In this case, they viewed ‘bundled’ services as the most important offering, with 50% of those surveyed in favor of systems combining multiple communication pathways such as satellite, cellular, and wifi into one package, while also combining everything from location tracking to data collection and back-office support as well,” he said.
Kar also pointed out that the one telematic service offering topping every fleet manager’s list doesn’t even truly exist yet. “It was interesting to see that each and every surveyed fleet manager showed some level of interest (either active or passive) in remote diagnostics/prognostics,” Kar said. “This shows the rising degree of importance of mobile resource management and technologies to reduce downtime among U.S fleet managers.”
Why fleet managers show such high interest in TPMS and prognostics is not hard to understand, either, he said. “These technologies help reduce downtime, improve mobile resource productivity, and therefore enable operating cost savings,” Kar explained.
This is critical, Kar believes, because not only does it highlight the underlying message fleets are broadcasting about their need to reduce operating costs, but offers truck makers and others the potential to generate new revenue in a market where new truck sales aren’t expected to climb back to “nominal” levels for years.
“There is a possibility that we’ll actually see a slight downturn in new truck demand through 2012 driven by high interest rates and that the industry will struggle to return to the new truck sales levels last seen in 2006,” Kar said.
“So how do manufacturers and providers make money in the future? By focusing on technologies that offer fleets an opportunity to make large reductions in operation expenses,” he added. “And they are saying maintenance costs are one of the biggest costs they face in their budgets.”