How fleets are handing rising equipment, maintenance costs

Speaker 1:
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Matt Cole:
Repair and maintenance costs are rising, what that means for fleet's bottom lines and how some fleets are finding ways to save.

Jason Cannon:
Hey everybody. Welcome back. I'm Jason Cannon. My co-host is Matt Cole. There's no secret that costs for just about everything in trucking are rising, and they have been for a long time. When it comes to equipment costs, even with notable increases in repair and maintenance costs, many fleets are holding onto equipment longer.

Matt Cole: 
That of course means even more spending on repairs and general maintenance. As one of the largest dealer networks in the US, the Peat store sees all manner of fleet behaviors when it comes to purchasing.

Tommy Slaymaker:
A lot of fleets are just trying to get back to what we would consider normal, a normal buying cycle coming out of COVID. The freight market through capacity has seen positive movement coming out of COVID. The trend continues for now, but I think the biggest one is trying to just get back to a norm. 

We were under allocation for some time, so a lot of fleets kind of got out of their normal buying cycle and had no choice then to hold on to their assets longer coming out of COVID. And it's been a catch-up point for the last few years. Then we start running into EPA regulations. We've kind of been on the fence on that for some time. But now we've got some direction, at least going into fiscal year 2027 from a large portion of the OEMs. So that's a good thing. At least we've got some visibility there.

But just trying to get back to a normal buying cycle and some type of normalness has been by far one of the most difficult things for a lot of our fleets to get done lately.

Jason Cannon:
As Tommy mentioned, many fleets have been forced to hold onto equipment longer than they typically would. So while trying to get back into a normal equipment cycle, how is that impacting the bottom line?

Tommy Slaymaker:
We see a lot of larger repair costs usually at the end of the assets life cycle and after the warranties have expired. So the overall cost of ownership and cost per mile just continue to increase as assets age. And due to the rise in repair events, the cost of increased downtime, it's reflective in the overall reliability of an asset. So hanging onto it longer sometimes isn't always the best business decision, but trying to keep older fleets maintained and running and limit the breakdowns, it just gets harder as assets get older.

Matt Cole:
Every trucking company's breakeven point for holding onto a used truck compared to buying a new truck, which aren't getting any cheaper by the way, is different. But Tommy explains what he sees.

Tommy Slaymaker:
The idea here is where's the breakeven point? When's a good time to trade a unit in? Where's your best residual value out of an asset? Once the life of a truck has gone out and you want to release the truck for trade or for resale, ideally you want that to happen prior to your larger component warranties running out. And ideally, this should be done before those large repair costs start to incure it themselves. We start to see though, at least larger fleets, they start to see some of the larger repair costs right around the 450 to 600,000 mile mark. And this varies between application. It varies between fleets. Years, normally right around five or six year range, we start seeing those larger repair costs. You see engines failing, transmissions failing, and that the overall cost per mile rising.

Jason Cannon:
Now looking at the calendar, summer will be winding down in the next few weeks, even if the temperature gauge outside doesn't reflect that. But while temps are still high, there are a number of things that fleets can do to keep their trucks running in peak condition.

Tommy Slaymaker:
As the aftertreatment systems have evolved over the years, heat has been one of the number one contributors to some of the issues that we run into. Maintaining a good cooling system is probably one of the most important things to contend with in the summer months. Obviously tires, brakes, chasing brittle hoses, loose clamps. Lately, one of the ones I've seen a lot of is batteries. Even with the winter months coming ahead of us here, for some reason, you see a lot of batteries needing replaced.

Matt Cole:
As Tommy mentioned, cold weather season is just around the corner, and there are definitely some ways fleets can soon begin preparing their equipment for the winter months.

Tommy Slaymaker:
First and foremost, a good preventive maintenance program is always going to be key. Ideally, with winter around the corner here, late fall, early late fall normally is a good idea to start getting your fleet winterized. Some of the things you want to really be mindful of is your air dryer systems, the cartridges, HVAC systems, checking those, checking the filters. Again, falling back on batteries, checking your batteries. For some reason, one that a lot of folks seem to forget is block heaters. Just plug the block heater and make sure it works. We run into that quite often. Storing up on antigel before the winter months do hit, before they come. These are some of the critical items that fleet should look at as we enter into the colder months.

Jason Cannon:
Emission systems are always a hot button issue in trucking and new emissions control systems are on their way with these new engines that are out in just a few months. Are current systems getting more reliable as the technology evolves?

Tommy Slaymaker:
They're starting to. With the current administration in place and some of the changes they've made, there's been a lot of change in the backside of the OEMs releasing software for certain years trucks to help alleviate some of the parameters for check engine lights coming on for regen systems. But it's kind of one of those things that it's going to continue to change. It's going to continue to evolve. You've got to stay close to it. If you're a large fleet, even an owner-operator, you look at some of the smaller guys running one to five trucks and their truck goes down because of an aftertreatment issue and one of the parts is hard to get. It's on back order. You look at every day the truck's down, it's just losing money. Trying to stay ahead of it. It doesn't hurt to ask questions. When the truck goes into a service department or you're on the phone with a service department, ask them.

Don't be afraid to ask. Ask whether should I be servicing this sooner for what I'm doing? Some of the issues they're seeing and finding as they're getting in there and doing maintenance to your vehicle or even your fleets, getting a rigorous system in place saying how often should we perform standalone regions? How often should we be servicing the aftertreatment system and looking at the filters?

Matt Cole:
One problem area for maintenance that Tommy has noticed recently is in the fuel system and making sure filters and injectors are clean.

Tommy Slaymaker:
It's been a big hot button of mine again lately. Fuel filters. Just because you're able to go in and buy a fuel filter for $6 cheaper than an OEM or $16 cheaper than an OEM filter, we're seeing more and more clogged injectors, D-rate codes going. Some aftertreatment systems, actually most aftertreatment systems will not regen if there's a fuel fault. And if the high pressure rails in some of these engines aren't seeing enough fuel pressure, the truck's not going to regen. You're going to wind up sitting on the side of the road anyway. 

So was it worth saving six to $16 a filter for an aftermarket version? I'm seeing that more and more lately where customer's truck comes in and it's only got 50, 70,000 miles on it. Check engine lights on, it's de-rated. Truck's brand new still. Why are we having issues? Come to find an aftermarket filter in the fuel filter housing.

I'm like, well, here's your first problem. Certain OEMs specifically call out what filters belong on the engine and that's what you should be putting back on. That's probably one of the bigger ones we see lately.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.