Details matter when evaluating truck service life
By: Phil Sneed
Semitrailers are a large financial investment for any fleet, large or small. These costs include the original sticker price for purchasing or leasing new or used equipment in addition to any expected maintenance.
According to Commercial Carrier Journal, John Blodgett and David Kalvelage from MacKay and Company highlighted these costs at the recent Heavy Duty Aftermarket Dialogue, held in Las Vegas.
By now most fleet owners likely know the financial breakdown. In recent times, the cost of a semitrailer varied anywhere from $113,000 to $125,000, with day cabs costing less than sleepers.
"The cost of a semitrailer varied anywhere from $113,000 to $125,000."
But these aren't the only numbers fleets have to pay attention to over the lifetime of a truck. Not doing so can actually lead to fleets losing money when it comes time to replace used semi-trailers with new ones.
The sticker price of a new truck is only the first part. In the months and years that follow, fleets can expect to spend thousands of dollars in service and replacement parts.
The specifics, as highlighted by Kavelage and Blodgett, were as follows:
- Oil – $600
- Tires – $2,900
- Replacement parts – $7,200
- Service – $9,900
Together, a truck's price will run an additional $20,600 for every individual class 8 semitrailer. This total is, however, only an average. Every truck is different and will require varying levels of repairs and maintenance.
Even so, the Class 8 aftermarket highlights these additional expenses, which total nearly $61.5 billion. Service takes up the most at $29.6 billion, followed by parts ($21.5 billion), tires ($8.6 billion) and finally, oil and lubrication ($1.8 billion).
Costs vary between years
Maintenance costs will vary depending on the number of years the truck is in use. Aftermarket costs for trucks that are used between one to three years are around $12,000 per year. During years four through six, aftermarket costs more than double to $27,000 and in the seventh, eighth and ninth year, costs rise slightly to $30,000.
After a decade of use, the aftermarket cost will decline to $22,000 and will keep decreasing by $1,000 every year after. Trucks that are kept and used over a 15-year period will then cost somewhere close to $400,000.
Not every semitrailer will be used for 15 years, however. Realistically, fleets should have a balance between new and used vehicles, and in many instances, fleets trade in a percentage of their fleet each year.
In a guest column for Monitor Daily, Mike Hamilton, vice president of financial services at AmeriQuest Transportation Systems, said if, for example, if a fleet consists of 1,000 trucks, 200 of those are being traded in yearly, assuming a five-year trade cycle is being used. Hamilton argues this model can be changed to lower costs of operation.
Every vehicle needs to be inspected on an individual basis because some require more attention and repairs than others. Other factors also have to be taken into account when deciding to trade in a truck, such as the cost of a new vehicle, fuel efficiency and the value on the secondary market.
The value of trucks on the used market has decreased between $10,000 to $15,000 in recent months, due in part to an influx of used trucks entering the secondary market.
In-depth analysis can therefore reveal huge cost savings. On the surface, trading in a truck after three years of use instead of four might not seem like a huge deal breaker, but when considering all other factors, in addition to the hundreds of trucks a fleet is composed of, fleet owners can potentially save millions of dollars.
Hamilton recommended trucks be looked at on a quarterly basis to determine how long a fleet should keep a certain vehicle in operation. Abiding by the quarter system is beneficial because it allows fleets to adjust to oil prices – if fuel is cheap, it will make financial sense to operate a truck longer than usual.
In most regards though, fleet managers have to consider all options when deciding to keep using or replace trucks.