Market Trends

Maintenance Costs Up Due to Frequency of Repair Increases

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.

Tags: Maintenance Costs, GE Capital Fleet Services

Author: Mike Antich | Posted @ Tuesday, March 2, 2010 9:46 AM | » Comments(1)

Short-Term Cost-Cutting Strategies Backfire in the Long-Run

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.

Tags: Operating Costs, Cost-Cutting, Replacement Cycles

Author: Mike Antich | Posted @ Thursday, February 18, 2010 12:41 PM | » Comments(2)

Morgan Stanley & Goldman Sachs Forecast $100-per-Barrel Oil in 2011

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.

Tags: Morgan Stanley, OPIS, crude oil

Author: Mike Antich | Posted @ Tuesday, February 2, 2010 12:41 PM | » Comments(6)

Fleets are Facing an Era of Higher Taxation

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.

Tags: Taxes, Budget Rent A Car

Author: Mike Antich | Posted @ Monday, January 25, 2010 3:09 PM | » Comments(-1)

The State of Commercial Fleet Management in 2010

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.

Tags: Commercial Fleets

Author: Mike Antich | Posted @ Friday, January 8, 2010 9:06 AM | » Comments(1)

Fleet Predictions for the 2010 Calendar-Year

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.

Tags: Depreciation, Maintenance, Replacement Tires

Author: Mike Antich | Posted @ Monday, January 4, 2010 9:29 AM | » Comments(3)

State of the Fleet Market Outside North America

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.

Tags: Fleet Leasing

Author: Mike Antich | Posted @ Tuesday, December 22, 2009 9:19 AM | » Comments(0)

A ‘Cash for Clunkers Program’ for Work Trucks

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.

Tags: Lifecycle Costs, replacement vehicles, Cash for Clunkers

Author: Mike Antich | Posted @ Tuesday, December 1, 2009 10:57 AM | » Comments(3)

Deferring Vehicle Replacements is Counter-Productive to the Intended Goal

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.

Tags: Vehicle Replacement, Lifecycle Costs, Downsizing, budget cuts

Author: Mike Antich | Posted @ Monday, November 16, 2009 8:26 PM | » Comments(1)

Shareholder Pressure for Carbon Disclosure Puts Corporate Fleets in the Cross Hairs

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.

Tags: Green, Emissions, Carbon Footprint

Author: Mike Antich | Posted @ Friday, October 30, 2009 3:42 PM | » Comments(-6)

Forecast of Order-to-Delivery Times for 2010-MY Fleet Orders

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.

Tags: Forecast, Order-to-Delivery Times

Author: Mike Antich | Posted @ Friday, October 23, 2009 4:02 PM | » Comments(0)

Forecast of Fleet Operating Costs for 2010 Calendar-Year

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.

Tags: Operating Costs, Industry Research

Author: Mike Antich | Posted @ Monday, October 19, 2009 5:09 PM | » Comments(2)

Ban Texting While Driving, But Beware of Inadvertent Consequences

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.

Tags: Driver Safety, Texting, Cell Phone Use, Distracted Driving

Author: Mike Antich | Posted @ Tuesday, October 13, 2009 10:48 AM | » Comments(-2)

2009 Order-to-Delivery Times Battered on Multiple Fronts

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.

Tags: 2009-MY, Order-to-Delivery Times

Author: Mike Antich | Posted @ Tuesday, September 29, 2009 8:38 AM | » Comments(0)

The Hidden Cost of Personal Use

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.

Tags: Personal Use, Resale Value, Company Vehicle

Author: Mike Antich | Posted @ Tuesday, September 22, 2009 11:12 AM | » Comments(2)

The ‘Gray Areas’ of Fleet Management

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.

Tags: Fleet Manager, Company Vehicle

Author: Mike Antich | Posted @ Tuesday, September 8, 2009 10:01 AM | » Comments(5)

2009 AFLA Conference Delivers ROI to Commercial Fleet Professionals

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.

Tags: AFLA, AFLA Conference

Author: Mike Antich | Posted @ Monday, August 31, 2009 12:38 PM | » Comments(0)

What Fleet Managers Find Rewarding About Their Jobs

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.

Tags: Fleet Manager, Career Building, job satisfaction

Author: Mike Antich | Posted @ Tuesday, August 11, 2009 11:07 AM | » Comments(3)

Are Fleet Managers Still Having Fun?

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.

Tags: fleet challenges, Fleet Manager, Procurement, job satisfaction

Author: Mike Antich | Posted @ Friday, July 31, 2009 2:25 PM | » Comments(4)

More Diverse Vehicle Selectors:<br>Will the U.S. Mirror Europe’s Fleet Market?

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?

Tags: vehicle selectors

Author: Mike Antich | Posted @ Tuesday, July 21, 2009 12:19 PM | » Comments(2)

Top 6 Fleet Trends in the Medium-Duty Truck Market

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.

Tags: Remarketing, Diesel, Resale Value, Replacement Tires, Regulations, Medium-Duty Trucks, Mergers & Acquisitions

Author: Mike Antich | Posted @ Tuesday, July 14, 2009 8:43 AM | » Comments(2)

10 Recommendations: <br>What Drivers Should Do After a Fleet Accident

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.

Tags: Accidents, Driver Training, Accident Management, Company Vehicle

Author: Mike Antich | Posted @ Tuesday, July 7, 2009 11:08 AM | » Comments(3)

Migration to 4-Cylinder Engines Continues with 2010-MY Ordering

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.

Tags: Four-Cylinder, 2009-MY, 2010-MY, fleet ordering

Author: Mike Antich | Posted @ Monday, June 29, 2009 1:48 PM | » Comments(3)

Does LIBOR Still Correlate to Corporate Borrowing?

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.

Tags: Emkay, Wheels Inc., LIBOR, PHH, LeasePlan

Author: Mike Antich | Posted @ Monday, June 22, 2009 11:17 AM | » Comments(-1)

Commercial Fleets Reveal 2010-MY Buying Intentions

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.

Tags: 2009-MY, Vehicle Selector, 2010-MY, vehicle order

Author: Mike Antich | Posted @ Monday, June 15, 2009 2:05 PM | » Comments(1)

Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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