By John Flynn, CEO Fleet Advantage
My whole career has been dedicated to the efficient use and management of transportation assets. It’s a simple formula that starts with properly specifying the asset, then financing it at the lowest price with the least risk, then utilizing it efficiently, maintaining it per the manufacturer’s recommendations, and, when the time is right, disposing of it at the top of the market—whether the market is bullish or bearish. Sometimes, the longer you keep an asset the more valuable it becomes—like a rare gem or bottle of wine. But with other assets, the longer you hold on to them, the more they will cost you—especially if the asset is utilitarian in nature. Transportation assets fall into the latter category.
Since fleet asset management and transportation operational efficiencies are my forte, I have had the opportunity to amass large quantities of data over the last 35 years. At no prior time has managing fleet efficiencies and vehicle lifecycles been as beneficial and rewarding. This in part is credited to the ongoing GHG mandates and OEMs, who are working relentlessly to reach higher levels of quality and performance year-over-year. The comparisons are stark and the savings glaring.
According to the axiom ‘a picture is worth a thousand words’, I thought it would be advantageous to present a visual cost comparison of vehicle lifecycles. These charts show both fuel and maintenance costs for a comparison of vehicle lifecycles ranging from 3-10 years. The savings are on a per-truck basis and take into account both fuel economy improvements in new models and degradation as trucks age.
This visual format makes a strong case for short-term leasing and shows significant reduction in costs and increased efficiencies.
In the early years of the GHG mandate discussions I had reservations as to whether or not the OEM’s could comply with such strict standards. However, the data is proving that the OEMs are exceeding the mandate and that the GHG mandates are helping everyone save money. The OEMs have confirmed this in the recent mandate as well.