March 2, 2010
Maintenance costs increased in 2009 due to higher cost of replacement tires, PM oil changes, and labor rates. However, the biggest factor was widespread deferment of vehicle replacement, resulting in the operation of older units.
Posted @ Tuesday, March 2, 2010 9:46 AM | »
February 18, 2010
The new reality of a tighter corporate operating environment has forced fleet managers to pursue two different types of cost-cutting goals - cost deferral and cost elimination. However, many cost-cutting decisions for fleet are made for the short-term, with very little consideration for total cost of ownership. Sometimes senior management is more interested in the fiscal, rather than economic, consequences of their decisions.
Posted @ Thursday, February 18, 2010 12:41 PM | »
February 2, 2010
Goldman Sachs was the first to forecast a $100-plus-per-barrel crude oil price when the bank issued a research report last November, which called for a $110-per-barrel average price for West Texas Intermediate (WTI) crude in 2011. Morgan Stanley released a similar report in January and targets $95-per-barrel of WTI futures by December 2010, with an average price of $100 per barrel in 2011.
Posted @ Tuesday, February 2, 2010 12:41 PM | »
January 25, 2010
In 2009, of every $100 spent on fleet, $5 was consumed by taxes. This compares to $4.10 in 2006 and $3 in 1983. The recession has caused sales and property tax revenues to plummet creating widespread shortfalls in government budget funding. States and other governmental jurisdictions are scrambling to find new ways to generate new tax revenues. Again, commercial fleets are in their cross-hairs.
Posted @ Monday, January 25, 2010 3:09 PM | »
January 8, 2010
There continues to be economic uncertainty among fleets manifested by extended cycling, right-sizing initiatives, and intense pressure to control costs. The consensus is the worst is behind us, but 2010 will be a tough road.
Posted @ Friday, January 8, 2010 9:06 AM | »
January 4, 2010
Barring the occurrence of unforeseen calamities beyond our control, here are my predictions as to how current fleet industry trend lines will play out in the next 12 months.
Posted @ Monday, January 4, 2010 9:29 AM | »
December 22, 2009
The global economic downturn created havoc in the fleet markets in Europe, Australia, Latin America, Asia, and Africa. Here's a summary of each of these regional markets and a forecast of what to expect fro 2010 based on a recent meeting in Barcelona with lessor representatives from each of these regions.
Posted @ Tuesday, December 22, 2009 9:19 AM | »
December 1, 2009
Turnover in diesel fleets happens slowly. The average service life for a medium-duty truck is 5-10 years, while a short-haul owner-operator heavy-duty truck typically has the lifespan of 18-20 years. Despite the 2007 and 2010 diesel emission standards, tens of thousands of older, dirtier trucks will remain on the road into the next decade. Is there a way to accelerate the turnover of pre-2007 diesel trucks? One way is a Cash for Clunkers program specifically for work trucks.
Posted @ Tuesday, December 1, 2009 10:57 AM | »
November 16, 2009
During economic uncertainty, senior management demands expense reductions and limits capital expenditures. Since fleet is usually among the top 10 corporate capital expenditures, there is pressure to defer vehicle replacements. However, this cost-containment strategy misses the point that all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is replaced. Cost reductions in acquisitions are often offset by rising costs elsewhere.
Posted @ Monday, November 16, 2009 8:26 PM | »
October 30, 2009
A record number of resolutions were filed during the 2009 proxy season by investor groups to get companies to voluntarily disclose data about their "carbon footprints," which includes the greenhouse gas (GHG) emissions caused directly and indirectly by their operations. These investors argue companies that disclose and mitigate GHG emissions will be rewarded with higher valuations and a lower cost of capital. At many companies, fleet represents a sizeable percent of their carbon footprint.
Posted @ Friday, October 30, 2009 3:42 PM | »
October 23, 2009
With the 2009 model-year behind us and 2010 model-year ordering in progress, how will 2010-MY order-to-delivery times (OTD) fare? Some foresee the 2010 model-year being a challenging one for OTD (not as challenging as 2009-MY, however), but one that could result in longer than normal delivery times.
Posted @ Friday, October 23, 2009 4:02 PM | »
October 19, 2009
Fuel costs, the largest fleet operating expense, declined dramatically in the 2009 calendar-year due to a sharp decline in worldwide fuel consumption. Also, many fleets downsized, due to widespread corporate layoffs, which lowered overall fuel spend. However, maintenance and repair costs increased in 2009, primarily due to vehicles kept in service for longer periods as a result of corporations slashing capital expenditures. Open the blog for a forecast of 2010 operating cost trends.
Posted @ Monday, October 19, 2009 5:09 PM | »
October 13, 2009
The popularity of texting has skyrocketed over the past four years. All agree that texting and driving are incompatible. However, a texting ban could have unintended consequences of interfering with productivity devices business drivers and truckers rely on. There are numerous ramifications to overzealous prohibitions on the use of on-board electronic communications that potentially may be counter-productive to driver safety. Let's target unsafe driving behavior, not on-board productivity tools.
Posted @ Tuesday, October 13, 2009 10:48 AM | »
September 29, 2009
The multitude of factors buffeting order-to-delivery (OTD) times for commercial fleets during the 2009 model-year were breathtaking and historic. To say the 2009 model-year was a difficult year for new-vehicle deliveries would be an extreme understatement.
Posted @ Tuesday, September 29, 2009 8:38 AM | »
September 22, 2009
Many companies are wondering whether they are charging enough for personal use. At some companies, this discussion is long overdue. When re-evaluating personal use charges, a common mistake is to focus solely on the cost of fuel. However, doing so ignores the other “hidden” costs of personal use, which have also risen.
Posted @ Tuesday, September 22, 2009 11:12 AM | »
September 8, 2009
Let's face it, some companies don't take fleet as seriously as they say they do. For them, fleet is not core to their business. The refrain is: We're in the "widget" business, not the car business. Internal corporate politics introduces many gray areas to fleet management such as making fleet decisions based on favoritism, giving lip service to safety, greenwashing, and pressuring suppliers for favors.
Posted @ Tuesday, September 8, 2009 10:01 AM | »
August 31, 2009
This is an exciting time for the Automotive Fleet & Leasing Association (AFLA) as it gains widespread recognition as a strong voice for the commercial fleet management industry. For the past five years, AFLA has experienced year-over-year growth in membership and conference attendance. As its president, I'm especially proud of AFLA's growing stature and believe its best years are still ahead of it. The upcoming 2009 conference epitomizes the ROI that AFLA offers commercial fleet managers.
Posted @ Monday, August 31, 2009 12:38 PM | »
August 11, 2009
In these challenging times, you might think the rewards of being a fleet manager are few and far between. However, this is not so with many fleet managers. There are six common themes to what fleet managers find fulfilling about their jobs.
Posted @ Tuesday, August 11, 2009 11:07 AM | »
July 31, 2009
Any long-time fleet manager knows change is the norm in the fleet management profession. However, in the past 12 months, fleet managers have had to deal with unprecedented challenges. In the wake of tumultuous events buffeting the auto industry and ongoing market uncertainty, do fleet managers still think their jobs are fun? Here are their confidential responses.
Posted @ Friday, July 31, 2009 2:25 PM | »
July 21, 2009
Diverse vehicle selectors offering multiple makes and models are relatively common among European corporate fleets. One of the many reasons is the fragmented fleet market shares of each OEM. In Europe, a large number of nameplates compete for the same commercial fleet business. Could the same future unfold for the U.S. fleet market over the next decade?
Posted @ Tuesday, July 21, 2009 12:19 PM | »
July 14, 2009
Six key trends will determine Class 3-7 medium-duty truck lifecycle costs in the 2010 calendar-year. They are diesel prices, acquisition costs, resale, maintenance costs, replacement tire expense, and environmental regulatory requirements. Here is a forecast of what to expect.
Posted @ Tuesday, July 14, 2009 8:43 AM | »
July 7, 2009
Drivers must collect as much information as possible when involved in an accident while driving a company-provided vehicle. Failure to do so can lengthen the accident management process and, in a worst case scenario, create unnecessary liability exposure for the company. What information should be collected? What shouldn't be said? Here are 10 do's and don'ts for fleet managers and drivers to follow.
Posted @ Tuesday, July 7, 2009 11:08 AM | »
June 29, 2009
The ongoing volatility of gasoline prices has prompted a growing number of fleets to transition to four-cylinder engines. This transition started in the 2008-MY and accelerated with 2009-MY ordering, when gas prices surpassed $4 per gallon in the summer of 2008. Early indications are that the migration to four-cylinder engines will continue with 2010-MY ordering. We have already seen glimpses of this trend in the 2010 RFPs submitted to major OEMs.
Posted @ Monday, June 29, 2009 1:48 PM | »
June 22, 2009
LIBOR was developed in 1984 as a measure of the real rate at which banks lend money to each other. Since the early 1990s, LIBOR has been used as a funding index for fleet leases. However, when the recent turmoil in the financial markets prompted governments to "backstop" bank borrowing, the cost of lending money began to represent a government-guaranteed rate, which no longer correlated to fleet lessor costs.
Posted @ Monday, June 22, 2009 11:17 AM | »
June 15, 2009
Fleet ordering for the 2010 model-year is shaping up to be higher than 2009-MY, but that's not saying much since 2009 was such an abysmal year. Many commercial fleets deferred 2009-model ordering. Some fleets purchased no replacement vehicles and skipped the 2009 ordering cycle altogether. A large number of commercial fleets decreased the volume of their 2009 ordering and are now playing catch-up with the 2010 model-year.
Posted @ Monday, June 15, 2009 2:05 PM | »