Why It's Time to Replace Tractors Sooner

Many fleet managers have long followed the golden rule of running a tractor to one million miles before investing in a replacement. But it may be time to part ways with that magic number.

Yes, purchasing or leasing a new tractor can be an intimidating expense. As improvements in fuel standards, telematics, and safety hit the market, however, the “one million mile” heavy-truck cycling practice actually puts long-term savings at risk.

At Element Fleet, we encourage customers to consider cycling through old tractors sooner, often leading to lower total cost of ownership at the end of the day.

Major improvements, major savings

The one million mile rule has a fairly simple origin. Tractors are expensive, so fleets that run them for as long as possible are increasing cost-effectiveness. Such thinking is now shortsighted because, just like passenger vehicles, heavy-truck fleet tractors get better and better each year. Whether it’s fuel, performance or safety, these improvements enable savings throughout the lifecycle of a heavy truck.

As a major ongoing expense, fuel is often the largest savings opportunity that urges customers to cycle tractors earlier. Diesel fuel is the biggest operating cost for trucking companies and as prices increase globally so do figures on the expense sheet. For most fleets, the dramatically improved fuel economy accompanying most new tractors offers a significant economic upside.

To put it simply, imagine that a fleet of 10 trucks each running 100,000 miles a year is seeing an average 7 miles per gallon. Even just a one mpg improvement would save nearly 20,000 gallons of fuel each year. This alone is a significant savings opportunity.

Perhaps more obvious than fuel savings is the decreased maintenance required for new-and-improved tractors. Maintenance costs tend to rise based on a tractor’s age, and cycling out sooner can help fleet managers avoid issues before they arise. This helps keep the wheels turning efficiently, increasing uptime and profits.

In addition to maintenance expenses themselves, consider the opportunity cost sacrificed when a truck is under the wrench. Newer trucks require fewer parts, less labor to fix, and offer more time on the road – all of which means a mobile, more profitable fleet. Plus, most newer trucks boast a longer shelf life than tractors of the past, meaning fleets can enjoy these efficiencies for more miles.

Lastly, most newer trucks provide vastly improved driver safety features that not only increase on-the-road savings, but also reduce risk across the entire organization.

Look to the data

Fleet managers have more data available than ever before, allowing them to gather insights, measure performance and adjust their business strategy accordingly.  By integrating data from a variety of sources, most of these technologies offer line of sight into many aspects of fleet performance, from management to in-vehicle diagnostics and more.

A smart technology partner should work with fleet managers to take this information and create an action plan for decisions like truck cycling. For example, a data-driven approach should not only offer insight into the most appropriate time to purchase or lease a new tractor, but continue to measure and report on this data to identify the biggest savings opportunities and help adjust business strategy accordingly.

Ultimately, fleet managers are looking to improve total cost of ownership on each tractor and maximize profits by keeping them on the road. Partnering with the right fleet maintenance providers and technology companies helps bring the necessary intelligence to the table, allowing for more holistic, informed decisions on tractor cycling and more.

Out with the old, in with the new

A new tractor is a sizeable capital investment, yes, but the benefits and cost savings of spec’ing updated gear could outweigh that upfront cost sooner than most customers expect.

With knowhow throughout the value chain, your technology provider should play a consultative role throughout the entire lifecycle of a vehicle – from DOT compliance to maintenance and fuel.

Because our team at Element approaches this practice holistically, we see the pain points of many fleets’ operations. More often than not, we’re finding that companies need to re-think the optimal time to cycle through older tractors to reduce costs and increase uptime over the lifetime of the fleet.

Steven Jastrow is  vice president of strategic consulting at Element, where he leads a team that identifies cost efficiencies for fleet vehicle operations. This article was authored and edited according to the standards of HDT's editors to provide useful information to our readers.