The Cost of Maintenance
Living in a globalized world, challenges faced in one region often echo in others. Delving into the American Transportation Research Institute's (ATRI) annual report on truck operating costs for 2022, we discover a milestone: a surpassing of the $2 per mile mark, attributed mainly to escalating fuel expenses – the first time the figure has gone over the $2 mark since the ATRI began tracking costs. Fuel expenses topped the reasons why, but maintenance rose by double digits as well: 12%. This is similar to the cost of maintenance and repairs in the UK, which reported an increase of 10% in 2022. As we await data on Germany's 2023 truck operating costs, the evolving CO2 surcharge, or CO2 toll, is anticipated to play a pivotal role.
Another way to look at the costs of operating a truck is per hour. Maintenance increased from USD $7.04 per hour in 2021 to $7.89 in 2022. Still another interesting perspective is the average marginal cost. Maintenance and repairs stood at 9%. So for every $100 spent on operating a vehicle, $9 goes towards maintenance and repairs. After fuel and the cost to lease or make purchase payments, maintenance accounts for your third highest expenditure.
Repairs are never cheap. In quarter three 2019, the average repair cost – excluding towing or tire replacement – went up 19%, from USD $455 to $542. Keep in mind that this was before supply chain issues hit in 2021 and are still ongoing. So average repair costs are higher still.
This article delves into the critical aspect of maintenance costs, unravelling the financial implications of reactive maintenance versus preventive maintenance.
How Much Does Reactive Maintenance Save You?
Reactive maintenance is a responsive approach that addresses maintenance needs only when a problem or breakdown occurs. Some fleet managers work this way, thinking it offers lower immediate maintenance costs, as they only address issues as they arise and may avoid some maintenance costs during trouble-free periods. And they’re not wrong.
However, it can result in higher overall costs due to unexpected breakdowns, emergency repairs, and potential downtime, potentially reducing vehicle reliability and safety. Safety is a critical factor in driver retention. By maintaining safe, reliable vehicles, drivers are far less likely to leave. No one wants to feel that their safety is being compromised. Driver turnover costs companies anywhere from USD $6,000 to $12,000. Reactive maintenance does not do much to reassure drivers, and you’ll pay the price.
Consider other costs, such as that for a simple oil and filter change, which costs around $200 – $300, depending on the type of oil used and the region you work in. Skipping regular oil changes causes engine problems, such as overheating. This in turn makes the engine run less effectively. The heat can cause a gasket to blow and parts to warp. The $200 you kept by foregoing an oil change leads to a breakdown. In 2020, downtime alone cost anywhere from $448-$760 a day and that cost is just the truck being off the road. Operating a van fleet and the downtime associated with breakdowns costs even more in the UK – £742, which converts to $932 (December 2023) – and that was back in 2015.
You also need to factor in on-demand parts shipments, expensive road-side repairs, or unplanned towing costs, which for trucks, can exceed $2,000. That $200 savings can cost your company dearly. Little things, such as failing to replace the drive belt every 100,000 miles, can come back to bite. But given the cost of any repair, even those that are scheduled, it’s completely understandable why some fleet managers choose to put off the inevitable. Understandable, but hardly cost effective.
Preventative Maintenance Extends Your Assets’ Lifespan
Preventive maintenance is a proactive approach to maintain the equipment, vehicles or machinery. It involves regular costs but in the long run, it can save money, reducing the number of breakdowns, costly repairs, and downtime. It involves a regular schedule of truck inspections and servicing, aiming to promptly identify and address potential issues and wear and tear. This proactive approach prevents these problems from escalating into more significant and costly issues, ultimately resulting in an extension of the truck's operational life.
Taking a closer look, preventive maintenance reduces part-replacement costs. Addressing minor issues in their early stages proves far more cost-effective than having to replace entire components. Preventive maintenance is effective in detecting and resolving small problems before they escalate, leading to substantial long-term savings that positively impact the organization's financial health.
Routine maintenance tasks, such as brake inspections, play a pivotal role in reducing wear and tear. This approach alleviates stress on key parts, including the engine, transmission, suspension, and other vital components. Preventive maintenance serves to enhance the overall reliability of a truck. Adhering to a meticulously planned schedule of maintenance tasks instils confidence that the vehicle is consistently in excellent working condition.
Preventive maintenance also contributes to efficient inventory management. Using cloud-based software, you can have complete visibility into parts inventory. You’ll know what’s available, what’s needed, and precisely when it’s needed. Fleet Maintenance software plays a pivotal role in achieving this by preventing shortages and avoiding excessive purchases. This visibility helps fleet managers make informed decisions regarding inventory levels, optimizing the supply chain, and reducing waste.
Extending the life of your vehicles, which is what preventive maintenance does, is especially important when you’re talking about valuable assets like your fleet. Consider that reactive maintenance leads to replacement costs you need to find sooner rather than later. And when those costs are unexpected, it can have serious consequences on your business.
Digitalization: Effective Preventive Maintenance
Beyond cost savings, preventive maintenance with digital tools enhances overall efficiency by simplifying scheduling, optimizing vendor management, and refining workflow and financial reporting. This is how you make maintenance cost effective. By transitioning away from traditional paper-based methods, it creates a more efficient and well-organized workforce, ultimately contributing to improved profitability and operational success.
Reactive maintenance requires minimal planning, while preventive maintenance requires thoughtful planning and scheduling. Maintenance is just one area where digitalization is incredibly helpful for reducing operating costs.
Cloud-based, enterprise-grade AMCS Fleet Maintenance software significantly contributes to cost-effective preventive maintenance. Firstly, it empowers organizations to proactively schedule maintenance tasks based on specific criteria such as distance run, hours operated, time, and fuel consumption. This proactive approach helps prevent potential issues from escalating into costly breakdowns, ultimately reducing the need for emergency repairs and associated expenses.
The software optimizes resource allocation by guiding technicians through standardized procedures during preventive maintenance tasks. This ensures that maintenance activities are executed efficiently and accurately, minimizing downtime and controlling labor and parts costs, thus enhancing the cost-effectiveness of maintenance.
AMCS Fleet Maintenance includes a valuable warranty tracking feature that automatically identifies work that may be covered by warranties at the time of repair. By capitalizing on warranty benefits, fleet managers can reduce internal maintenance costs significantly. The software's robust cost analysis capabilities capture and analyze all maintenance expenses, including both direct and indirect costs. This comprehensive cost data empowers fleet managers to closely monitor maintenance expenditures and pinpoint areas where cost reduction and efficiency improvement are possible.
The software also ensures compliance with regulatory requirements, inspections, and certifications, which can lead to costly penalties if not met. By helping fleet managers stay in compliance, it minimizes the risk of non-compliance-related spending.
The software's analytics and trend analysis tools enable data-driven decision-making regarding maintenance. Through the examination of historical data and identification of performance trends, organizations can fine-tune their preventive maintenance strategies to achieve greater cost-effectiveness.
AMCS Fleet Maintenance gives you real-time accessibility, facilitated by its true Software-as-a-Service (SaaS) implementation. It ensures that maintenance data is readily available when needed. This accessibility enables fleet managers to respond promptly to maintenance needs, reducing the likelihood of costly breakdowns and enhancing overall cost-effectiveness.
Next steps
For ideas on how to reduce maintenance costs and improve productivity, we urge you to read our free eBook, Proactive Fleet Management: The Power of Preventive Maintenance.
You can also download our brochure, request a demo or get in contact.
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