September 21, 2017

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Evaluating Options for Outside Service

THIS POST WAS ORIGINALLY PUBLISHED ON THIS SITE Click Here To Read Entire Article

July 2017, TruckingInfo.com – Cover Story

by Denise Rondini – Also by this author

More than 15 cents per mile. That’s what it costs a fleet on average for maintenance and repair, according to the American Transportation Research Institute. That equates to about 10% of a fleet’s vehicle-based operating costs.

Currently fleets are conducting 75% of their maintenance in house, according to Molly MacKay Zacker, vice president of operations at MacKay & Company, a market research company for the trucking, construction and agricultural equipment industries. However, when her firm surveys fleets every four years in its Truck and Trailer Service Study, fleets indicate they want to outsource more of their service work — yet the percentage of in-house service continues to remain steady. MacKay’s predictions are that in 2020, 68% of the 672 million service labor hours will be handled in house.

According to MacKay Zacker, “The reason fleets cite for not outsourcing more is they can’t afford the turnaround time.” Quality of work and cost of repairs are the other items that top the list of fleet concerns about outsourcing their service work. “Concern about downtime and turnaround time is a huge issue,” she explains, “and it is not just getting the truck where it needs to be to get the service done, it is how long is it going to take to fix it once it gets there.”

She adds, “Fleets consider that to be a deep dark hole. The truck goes to [a shop] and they have no idea when it is coming out.”

CK Commercial Vehicle Research’s Fleet Productivity Study found that 36.8% of the fleets surveyed (mostly fleets with fully staffed maintenance facilities) improved productivity over the past several years by performing more maintenance in house. Chris Kemmer, consultant at CK Commercial Vehicle Research, a market research company focusing on the trucking industry, says the average productivity gain was 14.5%. “It comes from the time saved doing it themselves vs. having to wait at an outsourced vendor, along with the time spent getting the vehicle to and from that vendor.”

However, as trucks continue to get more complex and as there continues to be a shortage of qualified technicians, more fleets, especially small to mid-sized fleets, may find they need to outsource at least some of their service work.

Joe Gallick, senior vice president, national account sales at NationaLease, a full-service leasing organization, doesn’t think companies wake up one day and say, “let’s outsource our fleet maintenance operations.” Rather, he says, “There is usually an event or financial recognition that triggers a company to explore better alternatives to properly maintain their fleet.”

Outsourcing can be done for a variety of reasons, says Charlie Roach, director of fleet services for Snider Fleet Solutions, a provider offering mechanical service both in-shop and on a mobile basis. “It could be to have a provider take on bigger jobs to free up the fleet’s own shop to handle the day-to-day workload of PMs and driver write-ups. It could be to cover manpower deficiencies. It could be to react to increased workloads caused by an increase in business.”

For some fleets, it’s about dealing with the increasing complexity of trucks.

“Vehicle technology continues to become more complex as diagnostic tools and telematics integration is making it difficult for fleet operators to keep pace,” says Bill Dawson, vice president of maintenance and engineering for full-service leasing provider Ryder. “The required investments in shop technology and technician training resources are just some of the factors driving the marketplace to make the decision to outsource. Many fleet operators faced with the decision

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