During the past few years, the Kenan Advantage Group has grown to become the largest independent fuel delivery carrier in North America. The Canton, Ohio-based company operates a combined fleet of 3,100 tractors and 4,100 trailers. Its rapid growth has opened new opportunities to reduce overall fleet costs through economies of scale.
Some of Kenan’s major initiatives for cost reduction have come through fleet maintenance. Since 2000, the company has acquired seven regional carriers, each of which had different types of equipment. The company since has consolidated its equipment specifications to three makes of tractors, engines and trailers, says R.J. Molder, vice president of fleet services for Kenan.
Extending oil drain intervals by sixfold is another major cost initiative. Molder estimates each oil change costs $200 to $300, depending on the labor market. With each tractor holding 10.5 gallons of oil and drain intervals of 120,000 miles, the company is saving about 50 gallons of oil per truck annually, Molder says.
About three years ago, Molder began testing the OPS-1 oil cleaning and filtration system on six tractors at one terminal. After 60 days, he ramped up the number of tractors with the OPS-1 system to 70 across two terminals. For the next six to eight months, the oil quality of each tractor was monitored carefully by taking oil samples. After 60,000 miles, the data from the oil analysis was conclusive.
“We were able to make the decision quickly,” Molder says. The oil’s total base number (TBN), a leading indicator for the ability of the oil to prevent wear, has stayed consistent during the 120,000-mile interval. “We saw a little downturn, but not out of our specification,” he says. Kenan continues to take oil samples for every truck at 20,000-mile intervals to monitor for signs of possible mechanical failures, such as coolant and fuel dilution.
A more recent fleet maintenance initiative has helped bring more control and visibility over costs. Kenan has “quite a few” locations among its various business groups that must have trucks serviced by local dealerships and service centers. These locations are too far away from the company’s 42 internal maintenance facilities, says John Rauschl, manager of fleet accounts and warranty.
In November 2007, Kenan began using the Web-based Decisiv MVAsist Fleet Portal to centralize its approval process for equipment repairs, warranty work and other important maintenance policies for inspection and repair work.
The Decisiv program is used to manage the maintenance activities of about 510 tractors. Currently, 10 Mack dealerships are using the online system, Rauschl says.
The moment a dealership enters a repair estimate, Rauschl can communicate back to the dealer to give the go-ahead or to address certain issues. The Decisiv system is set up to guarantee that Kenan receives national account pricing; if a dealer should inflate the price of a part, the system automatically knocks it down. The instant communication also provides visibility as to what trucks are out of service and for how long.
The company now is implementing a new fleet maintenance management system from TMT Software that also will provide centralized control and visibility over all internal maintenance activities and costs. The project should be complete by the end of the year and used by all 42 shops, Molder says.
As Kenan has created these new centralized strategies and programs for fleet maintenance, it has adjusted the workload at its own service centers, Molder says; instead of changing oil at 20,000 miles, its service centers are focusing their manpower on thoroughly inspecting equipment for safety and compliance.
