Tonnage is down, capacity is high and competition among carriers is as fierce as ever. Fleets constantly are looking at every aspect of the market and their businesses to cut costs and stay profitable. One of the most often asked questions is to what degree should maintenance and repairs be outsourced, if at all.
Keeping maintenance in-house means additional overhead such as the facility itself, parts inventory, tools and diagnostic equipment and additional personnel, including service technicians, if they can be found. But if these expenses can help ensure maximum vehicle uptime, many fleets are glad to make the investment.
If an outside service provider can deliver high-quality work quickly, though, they can make a case to win the fleet’s business. And as new truck technologies – such as diesel particulate filters – require new, costly equipment to maintain and well-trained technicians to operate, it’s becoming easier to make the case for outsourcing convincing.
Decisions, Decisions
What a fleet decides to outsource and what it chooses to keep in house depends on several factors. For trucks and components still within warranty, fleets typically turn to dealers for service.
Once a truck or component moves beyond warranty, though, the percentage of service outsourced to independents versus a dealership levels out. According to a 2007 outsourcing survey conducted by our sister publication CCJ, surveyed fleets responded that when brake components still are under warranty, they are sent to a dealer 29.7 percent of the time. Once those same brake components age beyond warranty, the number drops to 8.4 percent while a distributor or garage will pick up 10.4 percent of the work. While that still leaves in-house maintenance with the lion’s share of the out-of-warranty brake work at 76.8 percent, independent shops capture a foothold that could lead to more business, particularly if the job was done well and on-time.
“Several factors influence our decision to do work in house or to outsource it,” says Brent Larsen, CEO, Auto Transport Group, a niche carrier providing truckload service to 48 states. “The first thing we look at is how well qualified our personnel are to handle the problem. Secondly, we look at timing. How quickly can we have that piece of equipment returned to service if we work on it in house as opposed to sending it to another facility?
“A third determining factor is cost,” adds Larsen. “Often, we spend more money when we outsource, so the benefits of speed and qualification must justify the additional cost.”
