Fleet Maintenance - 17

al, safety systems become more advanced, and
driver features expand, it becomes more important for fleets to replace older vehicles with the
latest technologies," says Navistar's Nachtman.
"Higher asset utilization at many fleets is allowing fleets to accumulate their desired mileage to
trade in, at an earlier time. In many cases, fleets
are evaluating shorter trade cycles, both mileage
and time-based."
Holland
says
Fleet
Advantage customers have
shortened the lifecycle of
power units down between
three and four years,
compared to the previous
seven to 10-year cycle average.
"Until recently, a large part
of the industry believed in
longer lifecycles," Holland
says. "This was based on the
longevity of the truck. Yes,
the truck will run one million
miles, but at what cost? Now
that we have access to the
full data set and are able to
calculate the TCO with high
accuracy, we know the ideal
lifecycle in most applications
ranges between 350,000 and
400,000 miles."

Takeaways

"We have determined that there's a lot of different ways that fleets can improve their productivity, improve efficiency, and lower cost," says
Fleet Advantage's Holland. "But the single most
impactful practice is managing the lifecycle of
the asset."
TCO works on a cycle and requires constant

research to understand industry trends and evaluate what would work best for the next purchase
or lease.
This process takes buy-in and communication among multiple departments and involves
an evaluation of full asset expenses - including
upfront purchase or lease costs, fueling costs, and
maintenance spending.

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Cycling out old units

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When establishing a cycling
out process to remove old
vehicles and obtain new ones
in the fleet, it is important that
all departments work together
and communicate the changes.
This can include any number
of departments including
accounting, management,
maintenance, and legal teams.
The actual process is on-going, advises Penske's Rosa.
"It's a year-round process,
meaning a year in advance,"
he says. "If you're a customer of
ours who's leasing the vehicle
and it's on a six-year term and
it's the end of your fifth year -
depending upon the lead time
for the replacement unit - you
could be starting even sooner
than that or you have a little
window on it where you have
to work things out."
For financing of leased or
purchased vehicles, interest
rates can also play a role in the
timing of the cycling out process.
"If you know there's impending interest rate increases from
the federal government, they
may be pulling that decision
up sooner," Rosa adds. "If you
know there are reductions that
are on the horizon, you may be
pushing it out further."

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Fleet Maintenance

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