By Katerina Jones
Companies that transport goods — whether food distributors, grocery companies, retail companies, or oil and gas transporters — are increasingly realizing the need to upgrade their truck fleets more frequently by replacing older, less-efficient units that cost more to operate and produce harmful emissions.
Newer, eco-efficient trucks deliver significant savings in fuel and maintenance costs. In fact, according to the most recent truck life-cycle data index by Fleet Advantage, transportation fleet operators can realize a first-year per-truck savings of US$16,928 when upgrading from a 2015 sleeper model-year truck to a 2020 model. For a fleet of 100 vehicles, the savings can reach $1.7 million.
Fuel efficiency and maintenance expenditures, which are much lower on new trucks, account for a large portion of these “hard-cost” savings. The hard-cost savings are critically important to distinguish, especially when every organization is focused on total cost of ownership (TCO). However, aside from these hard-cost savings, there are also several “soft-cost” benefits that contribute significantly to an organization and its bottom line in asset acquisitions.
Newer Trucks Mean Safer Trucks
More fleets are now paying attention to their trucks’ safety obsolescence in addition to their economic obsolescence — meaning it’s just as important to replace an older truck for safety benefits as it is for economic reasons. And recent advancements in heavy-duty truck safety systems, including stability-control and lane-departure technologies, have made trucks and roads safer.
According to the National Transportation Safety Board (NTSB), close to half of all two-vehicle crashes from 2012 to 2014 were described as rear-end collisions. Of these crashes, 87 percent were due to insufficiently attentive drivers. In a 2015 study, NTSB researchers found that collision avoidance systems could have prevented 1,700 fatal rear-end collisions annually.
As a result, collision-warning system installations on heavy-duty trucks increased by 28 percent in 2017 and 39 percent in 2018. In part to comply with a Federal Motor Vehicle Safety Standards mandate requiring electronic stability control systems on truck tractors and other vehicles with a weight of 26,000 pounds, all major original equipment manufacturers (OEMs) began adding collision avoidance and lane departure to their standard package offerings by model year 2018. According to research by the Virginia Tech Transportation Institute, six out of nine carriers reported that adopting at least one advanced safety technology significantly improved safety outcomes.
Many OEMs include safety features as a part of their standard specifications and require end users to opt-out if they decline such safety features. OEM standards will eventually include forward video monitoring, blind stop monitoring, and lane correction.
Beyond Cost Savings
Among the other benefits of upgrading a truck fleet:
Hiring and retaining drivers: In addition to better safety, drivers and technicians want to drive and work on newer trucks that come with advanced technology. Drivers want more comfort, less fatigue, and more home time. Newer trucks allow companies to entice new drivers with advanced vehicles, rather than expensive sign-on bonuses. What’s more, the new equipment can keep drivers from leaving.
Also, it can be expensive to onboard a new driver through training costs. In a International Foodservice Distributors Association (IFDA) webinar, “Addressing Today’s Transportation Challenges,” Paul Mugerditchian, president of Dot Transportation, said it can cost up to $10,000 to onboard a new driver, which is money that can go toward the bottom-line or reinvestment when a fleet has a higher retention rate of its drivers.
Customer-service improvements: Newer trucks can also improve customer-satisfaction rates through fewer delays and an enhanced corporate image. Drivers have a better attitude when making deliveries, and there will be less freight- and property-damage potential due to equipment and safety technologies on board. Organizations can also maximize margins through reduced transport costs.
Corporate image and sustainability: Many customers want to do business with companies that emphasize reducing their overall carbon footprint as part of an overall commitment to sustainability. Updating a truck fleet addresses such sustainability objectives as (1) optimizing vehicle specification (to be more fuel efficient and better aligned to the duty cycle and geographic locale), (2) allowing for longer maintenance intervals (also reducing environmental hazmat disposal) and (3) disposing of pre-owned equipment.
A shorter life cycle conserves fuel resources, reduces emissions, and provides a cleaner environment. For example, a 2020 model year truck emits 126 metric tons fewer carbon dioxide and 12 percent less nitrogen oxide than a 2015 unit.
It’s easy for companies to focus on hard costs such as fuel, financing and maintenance when operating their fleet of trucks. However, broadening the view to additional soft benefits can improve the operation of a fleet — and an organization.
Katerina Jones is senior director of marketing and business development at Fleet Advantage, a Fort Lauderdale, Florida-based provider of truck fleet business analytics, equipment financing and life-cycle cost management.