Fontana: Let data guide your asset procurement process

Economic uncertainty, like we are experiencing now, seems to add complexity to the asset procurement decision. And while you can’t ignore the economy, you can use data to help you navigate the procurement process.

One of the presentations at the recent National Private Truck Council’s annual meeting focused on data-driven procurement plans. Analyzing the data you have on your trucks—and you have a wealth of it—will help guide the asset replacement process.

While there is a mountain of data available, you must identify which data points have the greatest impact on the operation and profitability of an asset. Obviously, things like the age of the asset and the number of miles it has accumulated need to be part of the equation. However, an asset should not be replaced merely because it is old.

Adding in data from vehicle maintenance inspections, as well as from repairs that occur between scheduled maintenance, will tell you a great deal about the asset’s health. Assets that are repeatedly in the shop between PM service are not only costing you money, but could be contributing to driver and customer dissatisfaction. Note: If one of the reasons drivers are leaving is because of the poor performance of your assets, consider factoring the cost of driver replacement into the decision to replace an asset.

Your data analysis should include a health check of your fleet on an asset-by-asset basis. Just because tractors are the same make/model/year does not necessarily mean they all have to be replaced at the same time. This is especially true if they operate in different duty cycles, as some routes place more demands on the truck than others.

Once you have the data on how each asset is performing, prioritize the order of replacement. Assets that are costing you the most to maintain or that are underperforming should be the first ones you consider replacing.

See also: Fontana: Addressing driver mental health

However, don’t forget to examine how the resale market is performing. Often, fleets want to get out of a unit but are upside down in the current resale market. Review the headlines to determine things that are going to affect the market, like large trucking companies closing their doors—something we’ve seen too much of over the past 10 years. When that happens, the used equipment market can be flooded with assets, which will drive down return values.

You also need to gather data on the cost of a new asset in order to determine if it makes sense to replace assets. Consider not only the initial purchase price of the asset but also the cost of financing it. However, you will need to balance that cost against any efficiency gains you will see from the newer assets. Truck manufacturers are continually refining their vehicles, resulting in efficiency gains from one model year to the next.

There is also the intangible value a new asset brings to your fleet in terms of how your customers and prospects view your fleet. It is cliché but true that your trucks are rolling billboards and new trucks may project a better image.

After carefully analyzing both your existing assets and juxtaposing them against the benefits of a new truck, you’ll have a clearer view of whether the time is right for swapping your old truck for a new one, even when the economic picture is not crystal clear.