Contract Maintenance Options

With the growing demands and resource limitations on vehicle and equipment maintenance, some shops are considering contracting, or outsourcing, maintenance and repair services. The decision to do so depends on a wide variety of factors, including fleet...


There are a number of scenarios where maintenance outsourcing makes the most sense for both small and large businesses, points out Bill O’Leary, Penske Truck Leasing’s vice president, field maintenance - southeast region. “There is a wide array of technology within current OEM vehicles,” he says. “Keeping up-to-date on these technologies can be very challenging and costly for businesses. Continuous training for our technicians and our management team to keep pace with ever-changing technology and new regulations is a core competency for Penske.”

Penske Truck Leasing is a joint venture among Penske Corporation, Penske Automotive Group and General Electric. A leading global transportation services provider, Penske operates more than 200,000 vehicles and serves customers from more than 1,000 locations in North America, South America, Europe and Asia. Product lines include full-service truck leasing, contract maintenance, commercial and consumer truck rentals, transportation and warehousing management and supply chain management solutions.

With equipment technology changing rapidly, “many fleets are asking themselves if the investment in new tooling and costs associated with training to keep up with the new technology is the best use of their financial resources,” adds Hunter.

Maintenance management and leasing companies offer various types of contract maintenance programs and services - from regular total vehicle preventive maintenance service at regular intervals, to authorized engine service, to comprehensive repair work. Usually, these are done with a consistent billing structure, allowing companies to budget one monthly payment amount and not worry about fluctuations in maintenance costs.

“Services and options are customized based on the needs of the customer, Thomas of First Transit and First Services says. “Fleet maintenance will never be one-size-fits-all since there are so many variables such as fleet usage, operating environment and equipment age.”

            “There are different service levels available in the industry to match the needs of different customers,” adds PacLease’s Hunter. “Contract maintenance programs can be as creative as you can imagine.” They all typically include preventive maintenance service, and may also include repair work, emergency service, engine service and even trailer or body service.

Similarly, Penske Truck Leasing offers a wide array of contract maintenance programs, which can include such things as guaranteed running cost, target pricing, labor guarantees and peg programs that “will lower costs and increase vehicle uptime for any size fleet,” O’Leary says.

“In many cases, Penske has performed maintenance services for the truck’s entire lifecycle. When that occurs, we are in possession of a comprehensive vehicle history that is also made available to customers. This history can help when spec’ing out new equipment to ensure that the fleet is optimized for the best mpg and lowest possible lifecycle cost equipment.”

 

Leasing Companies

One of the benefits of working with leasing companies is that they can include other services as part of their contract vehicle maintenance service options. These services can include vehicle leasing, rental vehicles, emergency roadside assistance, safety programs, financing, regulatory compliance support, fuel tax reporting, insurance and more.

Often, many of these items are included as part of a typical full-service leasing agreement, observes Hunter. Full-service leasing provides custom spec’d trucks with services included.

“When a customer already owns vehicles that have not yet reached their economic useful life, a contract maintenance program is a great option,” he says. “Many companies work with full-service leasing providers because they have access to a range of programs and services to enhance their transportation operation.”

At Penske Truck Leasing, service include collision repair, logistics services and the sale of used trucks that have been exclusively serviced by the company, says O’Leary.

 

STARTING POINT

The logical starting point for determining if an operation would be better served by contracting maintenance and repair is to evaluate the operation and determine which functions should be outsourced. A rule of thumb is to keep what the operation does best and job out the other work.

There’s also the matter of deciding upon the objectives for outsourcing the work. Is it for operational savings, to reduce capital investment, not have to worry about changing technology, to improve technician productivity, etc.?

We Recommend

  • Product
    Maintenance Management

    Maintenance Management

  • Company

    Ryder System, Inc.

    Ryder is a FORTUNE 500 commercial transportation, logistics and supply chain management solutions company. Ryder's stock is a component of the Dow Jones Transportation Average and the Standard...

  • Company

    PACCAR Parts

    PACCAR Parts operates a network of parts distribution centers that offers aftersales support to Kenworth, Peterbilt and DAF dealerships around the world. Our goal is to assure timely delivery of the...

  • Company

    Penske Truck Leasing Co.

    Penske Truck Leasing Co., L.P., headquartered in Reading, Pa., is a joint venture of Penske Corporation, Penske Automotive Group and General Electric Capital Corporation. A leading global...