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Making correct asset replacement decisions is vital

Dec. 13, 2022
Technology allows fleets to have a detailed picture of how their assets are performing. Telematics devices coupled with maintenance and repair records can help fleet managers gain a better understanding of the condition of each asset in their fleets.

It has become increasingly important that fleet managers have complete information on how each asset in their fleet is performing. Each year, most fleets have a set number of trucks they trade in for new vehicles from their chosen manufacturer. Typically, age and given all the choices or miles are the determining factors in which assets to replace.

However, the current truck market is anything but typical. A fleet may only receive a fraction of the trucks they order in 2023, and the delivery may be dispersed across the entire year.

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That makes the decision about which assets to retire critical. The good news is that technology allows fleets to have a detailed picture of how each asset is performing. Data from telematics devices coupled with maintenance and repair records can help fleet managers gain a better understanding of the condition of each asset in the fleet.

Fleet managers need to look at how many miles (or hours, depending on duty cycle) a truck has accumulated. Beyond that, it needs to look at how those miles were accumulated. Did the truck spend most of the time over the road at highway speeds, or was it in stop-and-go urban delivery applications?

Fleet managers also need to take a deep dive into the truck’s preventive maintenance and repair history. Was the truck in the shop only for scheduled maintenance appointments, or did it have to go in for additional mechanical services? The need for additional repairs outside a normal maintenance schedule should be investigated to determine the root cause. Breakdown trends also need to be reviewed.

The total cost of operation (TCO) needs to be calculated for each asset and an attempt needs to be made—based on historical data—to calculate what the total cost will be to keep a particular asset operating for another year or longer. In addition to maintenance and repair costs, the TCO calculation needs to include fuel costs—which will be based on how efficient the truck is to operate.

See also: Business intelligence means better decisions for fleets

Of course, there are also soft factors to consider, including driver satisfaction. Drivers want to be behind the wheel of trucks they know will run well and that have certain creature comforts. While it can be difficult to put a price tag on driver satisfaction, don’t overlook it when making the asset replacement decision.

While most fleets won't be able to avoid running older trucks at least through next year, selecting the right trucks to replace will be essential to maintaining fleet profitability until we return to a more normal production—and therefore asset replacement—environment.

Patrick Gaskins, SVP of Corcentric Fleet Solutions, oversees both sales and operations for the company's fleet offerings. Gaskins joined the company in 2010, bringing more than 30 years of experience as a financial services professional in the transportation industry. He leads a team that works with a supply base of more than 160 manufacturers to help the country’s largest fleets manage all aspects of their fleet operations and fleet-related spend.

About the Author

Patrick Gaskins | Senior vice president, Fleet Solutions

Patrick Gaskins is a financial services professional serving the transportation industry for over 30 years. Gaskins earned his BBA in Finance from the University of Miami, FL in 1989, and received his CTP certification from the National Private Truck Council in 2002. He has held positions with GE Capital, TCF Equipment Finance, and various small independent lessors. 

He began his career with Corcentric in 2010 as Vice President of Financial Services, was promoted to Senior Vice President of Sales and Operations, and is now taking the role of Senior Vice President, Fleet Solutions.  In his new role he will lead Corcentric’s Captial Equipment Solutions, Fleet Procurement, Supply Management, and Remarketing teams. Gaskins will bring to the Fleet practice his expertise in developing data driven solutions to complex transportation transactions, driving efficiencies, and reducing expenses for Corcentric’s customers.

The Fleet Solutions practice leverages technology and the purchasing power of over 1,700 member fleets operating approximately 800,000 assets to provide its members with access to cost effective national account purchasing programs, fleet financing, asset management, and remarketing services.

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