The forecast of the cost of maintenance and unscheduled repair is anticipated to go up in CY-2021.
“We are expecting a return to normal in 2021,” said Chad Christensen, strategic consultant at Element Fleet Management. “We are expecting an increase in both labor and materials for 2021. As the economy improves, we expect a rise in the cost of raw materials, which should have an impact toward the end of 2021.”
Also foreseeing maintenance costs increasing in calendar-year 2021 is Emkay.
“We do see recommendations of repairs and the costs of unscheduled services to continue to increase. Repair facilities are businesses and they need to try to maintain their business and cover their expenses. This may lead to more thorough inspection and more items being recommended, along with a pricing increase,” added Troy Fleener, team lead, maintenance for Emkay.
Another factor that may play a bigger issue in 2021 is that vehicle service lives are being extended as companies right-size their fleets or look to reduce new-vehicle acquisition budgets.
“For example, perhaps your company reduced the number of vehicles in your fleet to account for changes in business volume or maybe you now need to keep units in service longer than anticipated due to budget constraints limiting new-vehicle orders. These types of changes to your operating parameters are certainly going to influence your maintenance strategy,” said Chris Foster, manager, truck & equipment maintenance for ARI.
Higher utilization rates will require fleet managers to reassess their maintenance policies to reflect this new operating norm.
“If you’ve right-sized your fleet leading to higher utilization rates for your vehicles, you’ll need to examine your PM intervals and be sure to adjust accordingly for this increase in utilization. Also, if you anticipate your vehicles are going to remain in service longer, you need to adjust your maintenance strategy – and your budget forecast – to account for this additional utilization during the most costly portion of a unit’s lifecycle,” said Foster of ARI.
Higher labor costs have also increased the maintenance spend for routine repairs.
“The skilled labor shortage among automotive technicians continues to drive shop labor rates. During the pandemic, many technicians were protected from job loss because they were deemed essential workers, so there was little impact on the labor market for technicians. As more experienced technicians continue to transition into retirement and fewer young adults enter the field, shop labor rates will likely increase, especially in cities where technicians are in very short supply,” said Ryan Gardner, corporate business development manager of Enterprise Fleet Management.
On a positive note, the pandemic has resulted in several maintenance innovations such as curbside drop-off and pick-up. “Many service vendors now offer curbside drop-off and pick-up and vehicle sanitation services to address driver safety during the pandemic. Some vehicle sanitation services may be offered for a reasonable fee which, while small, adds an additional cost to routine maintenance expenses for 2020,” said Erin Mills, national service department manager for Enterprise Fleet Management.
Originally posted on Automotive Fleet
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