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 | »
December 9, 2008
Twenty-five years ago, there was a utopian vision of what fleet management would be like in the 21st century. However, this new century has been far from utopian. Its reality is more like a maelstrom. In eight short years, fleet managers have been buffeted by one major crisis after another, most of them unprecedented and severe. The first decade of the 21st century is shaping up to be one of the most tumultuous in the history of fleet management.
Posted @ Tuesday, December 9, 2008 10:09 AM | »
December 1, 2008
GM, Ford, and Chrysler will testify Dec. 5 before the House Financial Services Committee in an effort to secure a $25 billion emergency bridge loan. It is imperative that this emergency funding be approved. Failure to do so will have negative repercussions to the fleet management industry. Here's why.
Posted @ Monday, December 1, 2008 10:44 AM | »
November 24, 2008
In today's economic environment, push-back is emerging at some companies about company-provided executive vehicle fleets. As the economy worsens and ever-increasing amounts of taxpayer monies are being used to prop up financially distressed companies, a negative perception is growing about executive compensation and the different perks tied into these compensation packages.
Posted @ Monday, November 24, 2008 4:28 PM | »
November 17, 2008
Fuel prices hit record highs. The cost of financing a fleet doubles. Used-vehicle values plummet. Dealers are unable to sell the vehicles they have in inventory. Geopolitically, the U.S. is embroiled in war and the macro-economy teeters on recession. If you think I'm talking about 2008, think again. The year was 1973.
Posted @ Monday, November 17, 2008 11:04 AM | »
November 11, 2008
October was an extremely difficult month to remarket vehicles in the wholesale market as resale prices took a precipitous drop. Wholesale pricing, based on mixed mileage and seasonally adjusted, declined a record 6 percent in October. The lack of credit to both dealers and retail buyers has been the key catalyst contributing to the downturn in the wholesale market. The market forecast is gloomy until the credit gridlock is resolved.
Posted @ Tuesday, November 11, 2008 10:18 AM | »
November 4, 2008
The recent drop in fuel prices has been as breathtaking as the earlier run-up in prices. If sustained, these reduced fuel prices will begin to make a dent in overall fleet fuel expenditures. However, there is the risk that lower prices may bring about driver complacency. A large part of fleet fuel expense is controlled by drivers. Many of the hard-won increases in fleet mpg can be negated by drivers reverting to less fuel-efficient driving behaviors.
Posted @ Tuesday, November 4, 2008 11:09 AM | »
October 28, 2008
Do you know the location of your fleet vehicles during work hours? The most likely answer is no. In fact, nine out of 10 fleet managers have no idea where their fleet vehicles are at any given time. This assertion is based on a recent study that revealed 94 percent of those who operate corporate vehicles are completely unaware of their fleet’s location during work hours. However, this may soon change as a result of growth in the deployment of mobile resource management (MRM) systems.
Posted @ Tuesday, October 28, 2008 9:13 AM | »
October 24, 2008
Vehicle quality has improved dramatically with fleets experiencing a decline in the frequency of vehicle repairs. However, the average cost of repairs has been increasing. The forecast is for the cost of fleet maintenance to increase again in 2009. There are five factors exerting upward pressure on cost per repair.
Posted @ Friday, October 24, 2008 10:23 AM | »
October 21, 2008
Although gas prices started to decline in August, the year-to-date cost of fuel in 2008 has increased 30 percent compared to last year. The price for replacement tires rose 5-10 percent in 2008 due to higher oil prices and the shift by manufacturers to larger diameter tires. Also, fleet maintenance and repair costs increased across the board in 2008. The cost for non-warranty maintenance services was up 5 percent for fleets.
Posted @ Tuesday, October 21, 2008 8:32 AM | »
October 14, 2008
Replacement tires are the third-largest expense category for fleets. In the past three years, this expense category has grown as a result of multiple price increases from all major tire OEMs. In 2008, year-to-date tire replacement costs have increased 4-10 percent. This follows a 3-4 percent price increase in 2007 and an 8-10 percent price increase in 2006. The consensus is replacement tire prices will increase again in 2009.
Posted @ Tuesday, October 14, 2008 7:49 AM | »
October 10, 2008
The number one threat to fleets continues to be the price of fuel, despite the fact that fuel prices have been declining due to the global economic slowdown. Year-to-date, the cost of fuel has increased 30 percent in 2008 compared to 2007. The Energy Information Administration is projecting fuel to average $3.82 per gallon in calendar-year 2009. Fuel is the potential game changer of the fleet industry. Consider two recent examples as harbingers of things to come.
Posted @ Friday, October 10, 2008 9:06 AM | »
October 7, 2008
Today, Oct. 7, the Federal Reserve Board announced that it is invoking emergency powers to create a special fund to support the U.S. commercial paper market. The announcement by the Federal Reserve allows corporations to bypass the current credit gridlock gripping the nation’s economy. This has an impact on the fleet market since one source of financing for large fleets is the commercial paper market.
Posted @ Tuesday, October 7, 2008 9:10 AM | »
October 3, 2008
Reducing unnecessary idling is the simplest and easiest way for a fleet to reduce fuel costs. Besides wasting fuel, excess idling also causes unnecessary emissions, noise pollution, and needless engine wear-and-tear. The amount of unnecessary idling varies by fleet, but some fleets have recorded idling as much as 35 percent of the time.
Posted @ Friday, October 3, 2008 12:30 PM | »
September 29, 2008
The bread-and-butter customers of out-of-service fleet vehicles are buyers with C and D credit, namely subprime buyers. However, funders have tightened underwriting standards to manage these higher risk borrowers. Some lenders have caps on how low a FICO score they are willing to fund, which is often above the threshold of subprime borrowers. If this continues, it will have significant long-term implications for the sale of used fleet vehicles.
Posted @ Monday, September 29, 2008 12:25 PM | »