ROI on New Truck Technologies

Sept. 17, 2015
Seeing Beyond the Monetary Value

I’ve read numerous articles and opinions on the savings that result from new truck technologies either already on the market or technologies that will result from future emissions mandates.  The official predictions are suggesting an ROI of approximately two years. While that may be true for some operations, it is certainly not true for all operations. 

The appropriate calculation for an ROI on a new truck equipped with the latest technologies is an equation of miles not years.  It is a simple calculation of comparison—your current cost per mile versus the cost per mile of your new equipment.  If you purchase a new truck equipped with the latest technologies and your total monthly expenses are less than your previous month’s expenses, you are achieving an immediate return on investment.

So, what else is there?  As a culture we have to ask ourselves what is important to us and what value do we put on it?

I make a case for the inherent value of new truck equipment and the intangible benefits not measured in terms of ROI.  Because most people believe that since there is no associated monetary value, intangible benefits are not part of the equation.  However, if you factor them into your business strategy a clear pattern will emerge.  Consider new safety technology.  Many fleets are specifying their trucks with safety technologies that are reducing on-highway accidents and saving lives—no actual ‘return on investment’ can be quantified but a reduction in the number of accidents will result in nationwide reduction of highway injuries and fatalities.

Now let’s consider the global cause of climate change.  There are valid arguments on both sides as to whether it is real or not but for a moment lets imagine it is proven with 100% certainty that climate change does exist.  What would a strategic action plan for the transport division of your company generating the largest portion of your carbon footprint look like?  If your fleet were able to reduce the amount of CO2 you emit and reduce the amount of natural resources you consume by 20%, I suggest that your company would generate a lot of good PR and goodwill.  Again - no actual ‘return on investment’, however fleets who incorporated efficiency upgrades early on specifically for the fuel and maintenance savings benefits are now experiencing industrywide recognition for their move toward fuel efficiency, energy conservation, emissions reduction and incorporation of safety features in their truck spec.

Other intangibles benefits inherent in new trucks include improved uptime and reliability metrics, the attraction of a new generation of drivers, and the public perception of your rolling billboards, none of which factor into ROI.  Fleet managers need to put a value on these intangibles.  Just as most fleet managers won’t buy the cheapest tires because they put value on safety, they need to look more broadly at the ROI of new technologies, beyond the fuel and maintenance savings.

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