The Source for Multinational Fleet Professionals
Which five trends are affecting the increase in fleet expenses? Tune in to this episode of State of the Fleet Industry as Mike Antich examines several factors.
Fleet fixed and operating costs are increasing across the board, in particular fuel prices, higher acquisition costs, lower incentives, and unscheduled maintenance expenses. The forecast is for fleet expenses to increase for the next three years.
Despite continued supply chain issues, fleets are tasked with replacing vehicles. In this State of the Fleet Industry video, Mike Antich explores current inventory and ordering challenges, gas prices, fleet maintenance costs and controlling a budget.
Among the factors contributing to increased maintenance expenses has been increased miles driven, supply chain constraint, parts shortages, longer downtime, and a tech shortage exerting inflationary pressures on labor rates.
Many tire OEMs have increased prices in CY-2021, ranging from 3-10% depending on type of tire and size. Higher commodity prices and increased ocean freight rates are being passed on to end users as OE profit margins compress.
Many factors converged to exert upward pressure on PM costs, such as longer vehicle service lives due to limited product availability; the ongoing transition to synthetic oils; and higher labor rates to attract scarce technicians.
Part and labor prices have increased 4-8%, while part and labor availability have decreased. Due to difficulties sourcing replacement vehicles, fleets are keeping units in service longer, causing repair spend to increase in 2021
During calendar-year 2020, fleet maintenance expenses declined year-over-year compared to CY-2019, primarily driven by the COVID lockdowns and customer restrictions on allowing visitors on company premises. In addition, vehicles were under-utilized resulting in unintended additional problems such as flat tires, dead batteries, and rusting brakes.
Fleet car and truck maintenance costs have been trending upward during the first half of the 2021-calendar year as total fleet miles driven have increased in response to a recovering economy compared to 2020-CY. Prior to this, work-from-home mandates and the idling of non-essential fleets exerted downward pressure on fleet maintenance costs as fewer business miles, in the aggregate, were driven.
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