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Labor Rates

Upward Pricing Pressuring Fixed and Operating Costs

Fleets are being impacted by a variety of inflationary pressures ranging from higher acquisition prices due to the proliferation of onboard safety equipment, to increased material costs pushing up pricing on parts, upfits, and replacement tires.

Maintenance Costs Increase as Labor Rates Rise

Despite high build quality, vehicle maintenance costs are trending up due to increased advanced technology content, skilled labor shortages, higher tire prices, and more engines requiring synthetic oils and high-capacity oil pans.

Indirect vs. Direct Labor: How to Hit the Magic 70%

Direct labor can be summed up as time on task, or any time spent doing a specific task or repair. The work order is open, and as soon as the technician clocks in to perform preventive maintenance, for example, that counts as direct labor. The issue of monitoring and managing indirect labor costs is important because time is so important to fleet management.

Fleet Car Maintenance Costs Decrease 4 Percent

Overall, passenger car maintenance costs per unit, per month decreased 4 percent in 2013 with the average cost per mile decreasing 2 percent from 2012. These costs include unscheduled repair services, preventive maintenance (PM), tires, and replacement rentals.

How to Develop an Accurate Shop Rate

Setting shop rates can be a delicate balancing act between charging prices adequate enough to cover shop expenses while remaining competative with local competition. The process requires careful data analysis and computation.

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