Begin the New Year with an Operational Reassessment
Originally appeared in Fleet Owner
Economic predictions for 2023 aren’t looking great, so now is a good time to see which assets you should use to get the best TCO. Using data to analyze utilization will be crucial.
From the look of things, the U.S. economy will only grow at a slow pace in 2023. The Equipment Leasing & Finance Foundation is predicting economic growth at 0.9% and believes it is possible for there to be a recession beginning in the second or third quarter.
Regardless of economic conditions, the beginning of a new year is always a good time to re-evaluate processes and procedures to try to improve efficiency. It is important to take a long hard look at the way you operate.
Due to all the ongoing delays in new equipment deliveries, it will be more important than ever to determine if you have the right mix of trucks to achieve your 2023 business plan. Over the past three years, there has been a significant shift to e-commerce and an increased emphasis on last-mile delivery. You may find that by utilizing some of your older equipment to fill these lanes, you could increase your capacity and revenue.
To right size or reallocate your fleet, take an inventory of all assets. Determine the Total Cost of Ownership (TCO) for each asset and then deploy them in the most cost-effective and efficient lanes. Because the industry is extending asset life cycles, it is critical that we pay close attention to the ongoing running costs. Extended life cycles will require additional maintenance and preventive maintenance frequency will increase. Using older assets on routes that are closer to your shop will allow you to avoid costly roadside repairs.
TCO and utilization will be two key components of a successful asset redeployment strategy. Once you have your assets assigned to the most cost-effective and efficient lanes, you must look at two key components of utilization. First, miles driven, and second—but just as important—loaded miles. In the case of diminishing load deliveries, is there an opportunity for backhaul at the end of the route? Loaded miles are how fleets can drive additional revenue and cut costs.
Data analysis and TCO tracking frequency also will need to increase along with maintenance intervals to make these changes effective. This heightened analysis will prove to be useful in both the short term and long term making us all more efficient in how we operate our fleets.
At Corcentric, we stand ready to help any fleet bridge that gap. To learn how we can help, contact Corcentric today.
Patrick Gaskins, Senior Vice President Fleet Solutions, Corcentric
Patrick Gaskins is a financial services professional serving the transportation industry for over 30 years. He began his career with Corcentric in 2010 as VP of Financial Services, was promoted to SVP of Sales and Operations, and is now taking on this new role, where he leads Corcentric’s Captial Equipment Solutions, Fleet Procurement, Supply Management, and Remarketing teams. Patrick brings to the Fleet practice his expertise in developing data-driven solutions to complex transportation transactions, driving efficiencies, and reducing expenses for Corcentric’s clients.