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Replacement Cycles

USPS Should Use Mass-Market Vehicles, Report Says

The USPS could save as much as $1.9 billion by using modified, off-the-shelf mass-market vehicles and upgrading its fleet at least once in the next 20-25 years, according to a report from the organization Securing America's Future Energy (SAFE).

Running Trucks Till the 'Wheels Fall Off' is Expensive and Counter-Productive

The cliché in fleet management is that trucks are kept in service until the wheels "fall off." In many cases, this isn’t too far from the truth. Typically, the more expensive the asset, the longer it will be kept in service, especially units upfitted with expensive auxiliary equipment. However, as study after study shows, extended truck replacement cycles often have the unintended consequence of resulting in greater long-term expenses and degradation in worker productivity.

Policy Versus Guideline: The Trend Toward Flexible Replacement Cycles

Nearly all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is taken out of service. A growing number of fleets are shifting to more flexible vehicle replacement cycles. Some fleets no longer call their replacement cycle a policy and instead call it a “guideline.” They want to reserve the right on determining when to take a vehicle out of service based on prevailing market conditions rather than predetermined mileage and months in service.

Using Data to Green Your Fleet

Meaningful data can guide you toward the most effective solution, help establish goals, and demonstrate opportunities for both fuel savings and carbon reduction.

Short-Term Cost-Cutting Strategies Backfire in the Long-Run

The new reality of a tighter corporate operating environment has forced fleet managers to pursue two different types of cost-cutting goals - cost deferral and cost elimination. However, many cost-cutting decisions for fleet are made for the short-term, with very little consideration for total cost of ownership. Sometimes senior management is more interested in the fiscal, rather than economic, consequences of their decisions.

The Dangers of Extending Replacement Cycles

Vehicle replacement policy is one of the most critical aspects of fleet management. Nearly all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is replaced. In a recessionary economy, senior management demands expense reductions and there is pressure to defer vehicle replacements. However, such a policy change could actually prove to be counterproductive to the intended goal.

Analyzing Depreciation Trends: 2007 vs. 2006

Depreciation continues to be the largest fleet expense; however, fuel, as a percent of total fleet cost is growing (rapidly). Fuel expense is influencing vehicle acquisition strategies, with a direct bearing on future depreciation.