All too often fleet managers and owners are more reactive than proactive. A new administration in Washington? I have to react. A new tax rule on asset depreciation? I have to react. Rising interest rates? I have to react.
The reality is that taking a more proactive approach to fleet management will actually insulate you from some of these market influences. You don’t want your business plan to look like the EKG of a person with heart issues; rather what you want is a smooth measured year-over-year, month-over-month approach that allows your business to continue to operate in an efficient and cost-effective manner. You want a plan that allows you to accommodate market fluctuations without having to resort to an all or nothing approach.
The Class 8 truck market is full of examples of the all or nothing approach. Think about all the pre-buys when huge numbers of trucks were ordered one year, followed by a year when very few trucks were ordered. These huge swings reverberated for years as thousands of late-model trucks flooded the used truck market four to five years after the pre-buy sending used truck prices to their depths.
Looking at 2021, trailer order boards are out past the end of the year and truck build slots are full into the fall. This may cause some fleets to panic.
But it takes a smart fleet not to get caught up in the ups and downs of the Class 8 truck market. Smart fleets play the long game and have the foresight to plan truck purchases out three to five years.
They use historical data, market intelligence and analytics to determine the asset replacement cycle that makes sense for their fleet year-over-year. That is not to say they do not tweak it from time to time. But what they don't do is make wholesale changes to it because wholesale changes upset the balance they have worked hard to achieve.
They look at their assets from initial purchase, through years in use and through asset retirement and disposal. All those factors figure into an asset’s total cost of operation. When based on duty cycles and unique operation conditions, fleets can operate efficiently and profitably regardless of what is happening with interest rates, legislation, technology, depreciation and more.
The smart fleets are in the driver’s seat when it comes to asset management and they are the ones that are proactively managing asset acquisition to ensure they remain profitable no matter what the market throws at them.
