Have an aging fleet? It could be costing more than you know…
When “shout blues” artist, Big Joe Turner first belted out “Shake, Rattle and Roll,” he took the world of music by storm. Even today, Rolling Stone Magazine has dubbed it one of the 500 greatest songs of all time.
But when it comes to your fleet, Shake, Rattle and Roll is far from a chart-topping hit. Running an aging, unreliable fleet that shakes, rattles and rolls can cost far more than running a new one, both in monetary and customer satisfaction terms. Cost per mile generally increases as a truck ages – as do the costs of parts, repairs, and major components. Assuming similar miles driven each year, the costs of maintaining an aging fleet greatly exceed those of a new fleet.
Don’t forget downtime and fuel economy
And that doesn’t even consider the opportunity costs of downtime. Every time a truck breaks down, the result is either time spent in a repair shop or a missed or late delivery.
Then there’s the cost of fuel. Older model year vehicles simply aren’t as fuel-efficient as newer models, which average higher MPG (the standard measure of fuel economy). When the 2010 diesel engine emissions standards went into effect, most engine manufacturers started using selective catalytic reduction (SCR) technology to reduce emissions, which happened to boost fuel economy by an estimated three to five percent.
Now, as the economy rebounds, many carriers and fleet owners are upgrading their fleets. Some are buying new vehicles. Others are taking a different route: they’re switching from do-it-yourself to dedicated solutions that combine vehicles, drivers and equipment with transportation, warehouse and other value-added services allocated to the specific needs of one customer.
Milo’s Tea brews big results by going dedicated
Milo’s Tea Company delivers its famous sweet tea to some 330 grocery retailers nationwide. However, the company was struggling with meeting some of its larger grocery retailer’s delivery requirements and late or missed deliveries because its aging fleet was increasingly unreliable. Instead of investing in new vehicles, Milo’s decided to refresh its direct-to-store delivery model with a dedicated transportation solution – and reduced weekly fleet miles by 25% and distribution costs by 20%.
Going dedicated: it’s not for everyone, but could be for you
Taking the dedicated route isn’t for everyone. It’s probably not a good option if you have long-haul freight, one-way transportation flows, don’t need a high level of service or already have plenty of freight capacity.
Conversely, a dedicated fleet is a smart move if you have:
- Unique or complex distribution requirements
- High-value freight that requires special vehicles and/or handling
- Complex routes with multiple stops
- Rigorous service level agreements
- High driver turnover or problems dealing with the growing driver shortage
4 reasons to take the dedicated route
For companies like Milo’s, going dedicated enables them to:
- Reduce distribution costs: right-size your fleet and equipment to reduce weekly mileage and save on fuel and labor
- Drive efficiency: get the capacity and flexibility you need to ramp up or down as demand spikes or dips and minimize service failures
- Improve on-time delivery performance: if a truck breaks down or a driver is sick, you can resolve the issue without disrupting service
- Get up-to-date fleet data: use on-board computers to track mileage, cost per case, cost per delivery, on-time performance, fuel efficiency, and gain insight into your true unit costs
Do you have an aging and unreliable fleet? Maybe it’s time to switch from do-it-yourself to dedicated transportation.
