by Ashley Wilks
Outside help may be the answer to a fleet owner’s time, manpower and cost concerns
Any fleet with plans to grow soon realizes that expansion doesn’t just mean more revenue. It also creates more work. Every additional truck needs upkeep and tracking and a driver in its seat. Every new customer brings in more paperwork to handle.
Fleet owners excited about new business often experience the literal “price” of success, and realize that they need help. Sometimes, that can simply mean hiring on more staff, but outsourcing is also an option.
Here are 3 fleet jobs that fleet owners should consider outsourcing.
At some point in a successful fleet’s growth, the question of in-house maintenance vs. outsourced maintenance is bound to come up — probably after an exceptionally painful repair bill or an extended period of downtime waiting for a truck to be fixed.
In-house technicians who take care of preventive maintenance and minor repairs offer fleets convenience and consistency. They know the trucks and don’t have other customers to prioritize on the work schedule. On the other hand, operating a shop is an expense — from finding and keeping good technicians (and keeping them current on training), to managing the work efficiently, to having the space, parts and tools necessary to get the job done.
When the total cost of maintaining an in-house shop doesn’t make sense, finding a reliable outside provider does. In addition to shouldering the costs of technicians, diagnostics and other equipment, they can often provide emergency roadside service. The key is matching the needs of the fleet with the services offered and checking their credentials.
Trucking companies approach factoring companies for a very specific reason — they need help with cash flow to keep the business running. The partnership is usually meant to be a temporary one, completed once the company is back on track with its invoices.
But some fleet owners see an additional benefit. They feel relieved to give up the task of billing and collections. Smaller fleets often run a tight ship, with manpower dedicated first and foremost to keeping the trucks moving and customers happy. Tracking and chasing down overdue accounts receivable takes valuable time away from the business at hand for a growing company, and can be a stress-intensifier as well.
If a fleet is not in a position to employ a full-time staffer to take on the task of making sure your trucking company gets paid for freight delivered, then deciding to stay on with the factoring company, and keep their efforts focused on building the business, could be an easy move to make.
Trucks and Trailers
It almost seems like some late-night college-dorm philosophical discussion: How can you run a trucking company without buying a truck? But of course, it’s possible, and in some cases, even the wise move for fleet owners.
After all, the cost of a truck or trailer goes beyond sticker price. Maintenance is a regular expense that cannot be ignored. And the older a truck, the more miles it runs, and the greater the cost of upkeep.
A study of fleet costs done by Ernst & Young about five years ago showed that larger fleets have a lower cost per mile, due to the economies of scale. They also found that small and medium fleet owners often viewed vehicle ownership as a less costly option to leasing, but did not consider the opportunities available to the business if the capital tied up in equipment were invested in another area.
The study advised looking at the “total cost of ownership” in deciding whether to own or lease equipment. Outsourcing vehicle acquisition, maintenance and disposal could prove to be the more cost effective option.
Evaluating the Cost
In each of these cases, the fleet owner or manager must make a decision based on their company’s unique operation.
Sometimes, that means setting aside preconceptions about how things “should” be done, and taking the time to do an honest cost/benefit analysis of doing it in a way that makes sense for the fleet.
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