Capitalizing on an emerging threat
Last month, senior executives of about two dozen innovative truck fleet operations gathered in the Florida Keys for an annual summit hosted by Commercial Carrier Journal, a sister publication of Truck Parts & Service. The initiatives highlighted touched on numerous important areas of fleet management, including safety, efficiency, productivity and environmental stewardship, just to name a few.
One presentation that generated considerable interest was that of the director of maintenance for a large Southeastern less-than-truckload carrier. CCJ had recognized the company for its efforts in streamlining and standardizing procedures across the company’s 41 shops, thereby reducing waste and unnecessary movements and increasing productivity.
What really got the conversation going, however, was an initiative that CCJ hadn’t even addressed previously. In 2009, this trucking company had quietly begun doing maintenance work for other fleets, and the effort had grown significantly over the past 18 months. The carrier’s sizeable fleet consisted of just one make of both truck and engine, but its shops were now stocking parts for competitive equipment in order to service these new customers.
Fleets are beginning to collaborate in surprising – and scary – ways
During a period when freight activity was in a lull, to put it mildly, taking in outside work helped the LTL carrier bring in a little extra cash and keep a seasoned maintenance staff — the average experience level is 17 years — more fully utilized.
Based on the discussion, most executives in the room clearly were suddenly considering how they might take advantage of such an arrangement — either as service provider or customer or both. The chief operating officer for a large refrigerated carrier didn’t even try to hide his interest: He asked whether the maintenance director had a map of his shop operations with him.
Fleets have performed maintenance for other fleets for decades, but such arrangements have been the exception. In recent years, however, fleets have begun to collaborate in ways that once might have been unthinkable. Perhaps it’s a generational thing — younger executives being open to new ways of thinking. Or it might be the ever-growing pressure to cut costs and increase the utilization of sunk assets. Technology, such as telematics and system integration, can be an enabler of cooperation among different companies — even among competitors.
If you are a service provider, the prospect of truck fleets increasingly conducting maintenance for each other can be a frightening proposition. But there’s also opportunity in this threat. For starters, service-providing fleets still have to get their parts from somewhere, and it might as well be from you. If a parts customer’s service bay utilization rises, that’s good news.
And there’s a potentially bigger opportunity. The maintenance director for this LTL carrier was quick to concede that while he had a handle on maintenance and repair activities, the business side remained underdeveloped. Basically, he had neither the appropriate systems nor the expertise to run maintenance as a revenue-generating enterprise. So perhaps if a customer is considering a similar initiative, you could propose a joint venture whereby you supply the parts and run the business side while the fleet provides the equipment and maintenance personnel.
Relationships are changing, and you must adapt to those changes rather than fight them. n
Avery Vise is editorial director, fleet/dealer/aftermarket for Randall-Reilly and chief editor of Commercial Carrier Journal.