Surviving the freight recession
Labor costs for maintenance and repair increased 5.4% in Q3 and Q4 in 2021, while the cost of parts rose 2.7%, see source. With volatile freight volumes, improving operational efficiencies and controlling costs are paramount.
One way to do this: prevent unexpected breakdowns, which increased by 3% in 2021, see source. Not only do you extend the life of your assets, but you reduce the overall cost of maintenance by identifying and addressing issues early. Fact: breakdown repair can cost up to four times as much as proactive maintenance.
The figures being touted today for unplanned fleet downtime range between $488 to $760 per vehicle, per day, depending on the cargo. Those numbers are at least eight years old and don’t account for rising costs and recent inflationary pressures.
Repair and maintenance costs in 2021 jumped 6.9% for private carriers (18.2%, for-hire carriers) from 2020, see source. Others put the figure for private carriers at 10%. Either way, this represented the second-fastest growing cost category, with fuel at number one. Factors accounting for this could include post-pandemic supply chain shortages in parts, along with trends in servicing complex equipment.
By preventing breakdowns, you can also reduce downtime and avoid the cost of major repairs, which can be much more expensive to address. Consider, too, that a poorly maintained engine can eat up to 50%. By taking a proactive approach, you can also ensure compliance with – which brings us to another point, and we’ll start there.
The costs of non-compliance
In keeping with inflation, the Department of Transportation raised fines by 7.745% in January 2023. This covers violations across 68 Federal Motor Carrier Safety Regulations and Hazmat Materials Regulations, including the following:
Appendix A IV (h) Out-of-service order (operating in violation of order)
Appendix B (a)(1) Recordkeeping — maximum total penalty
Appendix B (a)(3) Non-recordkeeping violations
Appendix B (b)(3) Special penalties pertaining to railroad-highway grade crossing violations
Appendix B (d) Financial responsibility violations
Appendix B (e)(4) Violations of Hazardous Materials Regulations (HMRs) and Safety Permitting Regulations (compliance with FMCSRs)
Effective preventive maintenance helps you comply with regulations so that you avoid penalties and protect your bottom line.
What is effective preventive maintenance?
Lost productivity due to a vehicle being out of service is difficult to calculate. Additionally, there may be costs associated with missed deliveries or appointments, as well as damage to your company’s reputation. Fines or penalties might add to the costs for not meeting contractual obligations or regulatory requirements. All of these factors can add up to a significant financial impact on any business.
Our point isn’t to frighten you, but to make you aware. There’s simply no reason to ignore preventive maintenance, especially when controlling costs has never been more important.
Preventive maintenance programs should be based on manufacturer guidelines, industry standards, and regulatory requirements. You should design your program to keep assets in optimal condition, while minimizing the risk of costly repairs and downtime.
- Schedule regular inspections and maintenance: These should be carried out at scheduled intervals to prevent breakdowns. It’s also the ideal time to address potential issues before they balloon into major – and very expensive – problems.
- Work digitally: Technology is how you’ll gain significant efficiencies, from streamlining the maintenance process to breaking down silos between departments. You can identify areas for improving brake inspections, for example. Digital tools let you see where the team can improve on inspections.
- Training and education: Give your team responsible for carrying out maintenance proper training and education. Include your vendors – they need to know all of this to offer you an effective service. Do all the relevant people understand your equipment requirements? Can they perform maintenance at an optimal level? Do they understand the consequences – safety, compliance, etc. – of failing to do this?
Bringing structure to fleet maintenance
This is the area of technology. But how exactly can technology improve your preventive maintenance? We’ll use as an example AMCS Fleet Maintenance, the cloud-based, best-in-class solution. (But keep in mind that not every digital solution can match AMCS Fleet Maintenance for capabilities.)
First, AMCS Fleet Maintenance is specifically designed for its purpose – to fit seamlessly into your business, while providing real-time management of your assets, people, parts, and processes. The result: it drives productivity within fleets. With automated reporting and data-driven decision-making, you can increase the percentage of scheduled repair work to 80% of total work completed. Vehicles can smoothly transition from one preventive-maintenance service to the next – without experiencing a breakdown.
The user-friendly interface digitizes your business operations. This enables easy access to shop functions via the web or mobile devices. It guides technicians through standard procedures while capturing data accurately.
Take a closer look
You schedule tasks based on various factors. This can be distance run, for example, hours operated, time, fuel consumption – or any combination of these.
The user-friendly dashboard gives you real-time updates on assets, people, parts, work orders, procurement, and other relevant metrics. By analyzing historical data and trends, you can gain valuable insights to make intelligent, informed decisions.
Working manually involves recording data by hand, which of course, invites errors. AMCS Fleet Maintenance automatically captures time and scans parts onto work orders.
Technicians can follow interactive repair processes, which guides them through tasks and sets benchmarks. All external maintenance and operational costs are captured and analyzed, including allocated and overhead costs. AMCS Fleet Maintenance is optimized for finance, with data and analysis available in both maintenance and GL formats.
“Using technology, you’ll be able to identify places where you can beef up things like your brake inspections or oil inspections or find out where your team may be missing the mark on the actual inspection itself.”
– Bob Nolen, Director of Fleet and Facilities, Transportation Services
The system can automatically flag potentially warranty-covered work at the time of repair, create claims, and manage and reconcile them so that you’re not spending money to replace parts under warranty.
Ensuring that your fleet is always compliant and secure is true peace of mind and cost effective. AMCS Fleet Maintenance manages all prescribed preventive maintenance on your assets, plus regulatory requirements, inspections, and certifications. Management compliance dashboards make your job that much easier. And because it operates on the cloud, it can be accessed on your browser and mobile devices from anywhere.
“AMCS Dossier Fleet Maintenance is an excellent tool to show PM compliance. It's something that can't be modified or faked or anything else.”
– Bob Nolen, Director of Fleet and Facilities, Transportation Services
You might also find it helpful to read:
- If You’re Not Continuously Improving Fleet Operations, You Are Falling Behind
- AMCS Transport Management System
- Sustainable Transport Management: Reducing Carbon emissions with Technology
Watch On Demand Webinar: Reduce your fleet costs and eliminate equipment downtime
Let us show you how fleet maintenance software can produce significant cost savings and increased productivity quickly. AMCS Fleet Maintenance (formerly Dossier Systems) is your one-stop shop for fleet management and fleet maintenance.
Watch the webinar on demand here.
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