June 9, 2009
Resale values have significantly declined across the board on all medium-duty trucks, with five-year old medium-duty trucks decreasing, on average, between 18-23 percent in the past 12 months. Trucks older than 10 years have been more difficult to sell due to higher fuel and maintenance costs. The ongoing sluggish business environment is the key reason for the soft resale market. Here's a forecast of what's to come.
Posted @ Tuesday, June 9, 2009 11:05 AM | »
June 2, 2009
Automotive Fleet magazine conducted a survey of General Motors' largest commercial fleet customers, immediately following its June 1 announcement that it filed for voluntary Chapter 11 bankruptcy protection. Here's what these commercial fleet managers had to say.
Posted @ Tuesday, June 2, 2009 2:08 PM | »
May 26, 2009
I am dismayed at the number of fleet managers who have lost their jobs due to corporate cutbacks. Similarly, I am amazed at the short-sightedness of today's senior management making these decisions without regard to the implications of lesser-qualified individuals managing one of their largest asset classes. I predict that companies that downgrade the expertise of their in-house management will be on the wrong side of history and will be the poster children of what not to do in a recession.
Posted @ Tuesday, May 26, 2009 10:59 AM | »
May 19, 2009
Slow retail sales have prompted not only closure of assembly plants, but also component factories, which is delaying parts deliveries. OEMs are also hiking parts prices, with some experiencing double-digit percentage increases. The dramatic slowdown of automotive sales has also created a "financial crunch" for many parts manufacturers, with many second-tier suppliers going out of business. This portends a difficult environment for fleets to manage accident repair costs.
Posted @ Tuesday, May 19, 2009 7:25 AM | »
May 12, 2009
Vehicle replacement policy is one of the most critical aspects of fleet management. Nearly all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is replaced. In a recessionary economy, senior management demands expense reductions and there is pressure to defer vehicle replacements. However, such a policy change could actually prove to be counterproductive to the intended goal.
Posted @ Tuesday, May 12, 2009 12:00 AM | »
May 4, 2009
Vehicles get better fuel mileage when not loaded with unnecessary weight. An extra 100 lbs. in a vehicle could reduce mpg up to 2 percent. Typically, the chief culprit responsible for accumulating unnecessary weight is drivers. Over the course of a vehicle assignment, drivers accumulate a "cargo" of dated sales materials, point of sale demos, and seldom-used tools carried in trunks, storage bins, and back seats. You'd be surprised how quickly lbs. add up.
Posted @ Monday, May 4, 2009 10:22 AM | »
April 21, 2009
Show me a well-run fleet and I will show you a top-notch fleet manager. A fleet manager validates his or her importance by cost-effectively managing corporate assets and controlling the expenses associated with operating these assets. Although each fleet is unique, there are common traits found among successful commercial fleet managers. Here are 10 management traits that ensure a fleet is operating at the optimum level.
Posted @ Tuesday, April 21, 2009 12:14 PM | »
April 13, 2009
Key factors that influenced medium-duty truck operating costs in 2008 were the price of diesel, increased repair costs related to new truck technologies, higher labor rates, and decreased utilization. However, fuel was the primary driver behind higher operating costs in the 2008 calendar-year.
Posted @ Monday, April 13, 2009 2:35 PM | »
April 6, 2009
The jaw-dropping events of the past six months have made an indelible impression on many fleet managers. The very real possibility that two of the Detroit 3 could quickly (and unexpectedly) enter into Chapter 11 bankruptcy protection, along with some fleet management companies not accepting new-vehicle orders, has caused some corporations (especially those sole sourcing) to reassess sourcing strategies.
Posted @ Monday, April 6, 2009 10:34 AM | »
March 31, 2009
The National Highway Traffic Safety Administration (NHTSA) is proposing to amend its air brake standard to improve the stopping distance performance of commercial trucks. Based on current safety trend data and brake system technologies, NHTSA is proposing to reduce the required stopping distance for truck tractors by 20 to 30 percent. The proposed rule would cover all truck tractors equipped with air brakes. The proposed rule does not include single unit trucks, buses, or trailers.
Posted @ Tuesday, March 31, 2009 9:04 AM | »
March 20, 2009
Wholesale used-vehicle prices during fourth quarter 2008 were the worst on record. Since then, wholesale prices rose significantly in January through March. The improvement in pricing in 1Q 2009 reflects better-than-expected retail sales of used vehicles. Resale values for mid-size sedans are substantially higher than in 2008, as are prices for light-duty trucks and SUVs. However, consumer confidence and credit availability remain two wildcards to the market's ongoing vitality.
Posted @ Friday, March 20, 2009 4:13 PM | »
March 17, 2009
The credit gridlock gripping the nation's economy has made it more difficult (and expensive) to fund fleet vehicles using asset-backed securities. Last February, the Federal Reserve and the U.S. Treasury launched a joint program called the Term Asset-Backed Securities Loan Facility (TALF) to improve credit conditions in the securitization markets. On March 3, the Federal Reserve expanded the definition of eligible collateral under TALF to include commercial leases. Here's how the program works.
Posted @ Tuesday, March 17, 2009 10:07 AM | »
March 10, 2009
Since the recession's start at the beginning of 2008, 4.4 million jobs have been lost due to corporate downsizings and layoffs. Many terminated employees were assigned company vehicles. In today's politically correct HR environment, the term "reverse expansion" is being used to describe the retrieval and reassignment of company-provided vehicles from terminated employees. A fleet manager suddenly thrust into a reverse expansion will find it very easy to make mistakes.
Posted @ Tuesday, March 10, 2009 10:31 AM | »
March 2, 2009
Massive layoffs are occurring throughout the economy, and many companies find that terminated employees are not returning their assigned company vehicles. Sometimes, the company-provided vehicle is held "hostage" until the employer meets a grievance by the terminated employee. Unfortunately, many HR and legal departments take the "easy way" and are too quick to involve the police to expedite resolution.
Posted @ Monday, March 2, 2009 3:43 PM | »
February 23, 2009
On Feb. 17, President Obama signed into law the American Recovery and Reinvestment Act. The $789 billion economic stimulus legislation is comprised of $507 billion in spending programs and $282 billion in tax relief. The legislation includes significant new funding for fleets, such as $300 million for diesel emission retrofit grants; $300 million to establish a grant program through the DOE's Clean Cities Program; and $300 million for acquisition of energy-efficient vehicles by the federal fleet
Posted @ Monday, February 23, 2009 10:50 AM | »
February 17, 2009
NHTSA's testing and safety criteria for front- and side-impact crashes and rollover resistance have not been substantially revised since the agency started crash testing new models 30 years ago. Recognizing that nine out of 10 vehicles routinely score either four or five stars, NHTSA wants to increase the standards for front- and side-impacts, along with more stringent rollover testing. NHTSA is poised to implement a revised five-star safety rating program starting with 2011 model-year vehicles.
Posted @ Tuesday, February 17, 2009 12:17 PM | »
February 8, 2009
Overall fleet car maintenance costs rose 5 percent for the 2008-calendar year compared to 2007, primarily due to increased prices for replacement tires and higher labor rates. Partially mitigating these increases were flat PM expenses and increased vehicle quality, resulting in fewer warranty claims and vehicle recalls. These findings are based on a survey of actual maintenance expenses of 70,374 passenger cars conducted by GE Capital Solutions Fleet Services.
Posted @ Sunday, February 8, 2009 7:22 PM | »
February 2, 2009
Last year, the U.S. Congress granted an exemption from the 12-percent federal excise tax for truck idle reduction systems. Recently, the Environmental Protection Agency (EPA) released a list of approved idle reduction systems eligible for the federal excise tax exemption. The exemption applies to sales and installation of these systems since Oct. 4, 2008.
Posted @ Monday, February 2, 2009 11:27 AM | »
January 26, 2009
Digital odometer fraud is growing at an alarming rate, according to new research from Carfax. The research data reveals the number of vehicles with rolled-back odometers has increased 57 percent nationwide over the past four years. According to NHTSA, more than 450,000 cases of odometer rollbacks are reported annually. However, the total number of odometer tampering incidents (including those not caught) is estimated to be substantially higher.
Posted @ Monday, January 26, 2009 11:40 AM | »
January 20, 2009
Fleet managers need to view work trucks as earning assets. To maximize truck productivity, it is necessary to optimize specifications, operating procedures, and replacement strategies. When spec’ing vehicles, past history is important, but one outcome to using last model-year specs is repeating past inefficiencies. Fleet managers need to adopt a “clean sheet” approach to how they manage their truck fleets.
Posted @ Tuesday, January 20, 2009 9:50 AM | »
January 13, 2009
We are currently in the midst of the worst used-vehicle market in the past 25 years. Year-over-year prices declined every month in 2008; however, wholesale prices did improve the first 10 days of January. Despite this, many fleets now find that the depreciation rates established 24-36 months ago are insufficient for today's resale market. In many cases, resale values of fleet vehicles are significantly below the remaining book value. Here's a forecast for what lies ahead in the wholesale market.
Posted @ Tuesday, January 13, 2009 9:41 AM | »
January 6, 2009
When looking ahead to the next 12 months, I foresee reduced operating costs for fleets offset by increased depreciation expense caused by anemic resale values and decreased incentive monies. Here’s why I believe this will be the case, along with other predictions for 2009.
Posted @ Tuesday, January 6, 2009 10:45 AM | »
December 30, 2008
I can’t recall a year as tumultuous as 2008. The year started with the Jan. 1 termination of the $1.8 billion merger between GE and PHH and ended with the near bankruptcy of GM and Chrysler. In between, we witnessed record fuel prices, then a spectacular freefall in fuel prices, a dismal used-vehicle market, unprecedented credit gridlock, the inability of some fleets to order new-vehicles, and fleet delivery disruptions due to a UAW strike and an epic Midwest flood that submerged rail lines.
Posted @ Tuesday, December 30, 2008 9:12 AM | »
December 23, 2008
The dramatic decrease in sales has prompted automakers to make significant adjustments to production schedules. A number of fleets are affected by the unanticipated, longer-than-normal, plant shutdowns. These fleet managers expect order-and-delivery (OTD) times to increase in 2009 due to revised production schedules. These fleet managers say the extended plant shutdown schedules, for all intents and purposes, shortens the 2009 model-year, which early-order cut-off dates will only aggravate.
Posted @ Tuesday, December 23, 2008 10:46 AM | »
December 16, 2008
On the eve of the 2009 calendar-year, fleet managers are bracing for a new year filled with uncertainty about the economy and the long-term viability of the Detroit Three. There is a long litany of uncertainties voiced by commercial fleet managers about what may unfold. Many fleet managers view the changes currently roiling the industry as "tectonic shifts" in how commercial fleets will be run in the future.
Posted @ Tuesday, December 16, 2008 10:08 AM | »