The forecast of the cost of maintenance and unscheduled repair is anticipated to go up in CY-2021.
The ultimate outcome of the pandemic and the strength of the economic recovery are driving many predictions on future pricing.
The largest fleet operating expense is fuel, which traditionally represents approximately 60% of all operating costs. However, the decreased miles driven by fleets during the pandemic was the No. 1 factor contributing to keeping fuel costs flat in 2020.
Reduced tire demand and a decrease in overall miles driven have caused tire manufacturing volume to decline in 2020, creating a downstream ripple effect softening commodity prices for natural rubber, but this may change in 2021.
The COVID-19 pandemic divided the fleet market into essential and non-essential businesses, causing hundreds of thousands of company vehicles to sit idle from mid-March to mid-May. The economic shutdown caused miles-driven to plummet.
One trend that is gaining momentum among commercial fleets during the pandemic is the use of mobile maintenance vendors. There has been a substantial uptick in fleet requests for mobile maintenance solutions as fleet managers look to minimize downtime and the administrative burden of taking their vehicle to a repair shop and having the driver wait.
Operating cost trends analyzed in this video includes current fuel pricing trends and forecast for 2021 calendar year; maintenance (includes preventive and unscheduled maintenance) trends; part shortages caused by component backorders; replacement tire pricing trends.
With the cost of fuel representing 60% of the total fleet budget, fleet managers are looking for opportunities to reduce expenditures ranging from rightsizing, route optimization, telematics, personal use, and modifying driver behavior.
Fleets are being impacted by a variety of inflationary pressures ranging from higher acquisition prices due to the proliferation of onboard safety equipment, to increased material costs pushing up pricing on parts, upfits, and replacement tires.
Fleet operating costs increased in CY-2019 due to higher PM costs, ongoing pressure to increase maintenance labor rates to address the widespread tech shortage, and higher prices for commodities to manufacture replacement tires.
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