These days, it’s all about pinching pennies and saving when and where you can.
For some fleets, that means devoting some extra attention to used trucks and remanufactured parts. A recent National Conference of State Fleet Administrators (NCSFA) survey of two dozen municipal fleet managers showed that only four budgets were unaffected by the recent economic downturn, with more than 70 percent of managers looking for any means necessary reduce their capital costs.
For Barry Mortensen, long-time owner of Roosevelt, UT-based Mortensen Trucking Inc., that means there are a lot more used truck options out there for his fleet. He says while his experience in the industry helps him separate the good deals from the bad, now it seems there are more bargains available out there than he needs.
“I just go looking and once in a while you run across an owner-operator who’s going out of business or he’s overspent what he can afford,” he says. “A guy called me yesterday with a 2002 Peterbilt 379; offered it to me for $22,000, with a 550 Cat’ and a 13-speed. If I was looking to expand, it would be a good time to jump on something that like.”
Mortensen is also cutting his costs by purchasing remanufactured parts; depending on the part, of course.
“Transmissions and rear ends, I get those, and obviously you use remanufactured brake shoes if you have any sense,” he says. “Clutches, you best go with new because they (can) hardly rebuild them for less than a brand new one. I don’t know if you’d want to mess with that, because if you make one tiny little screw-up…”
Mortensen says there seem to be more remanufactured parts out there today then ever before, and fleet managers are wise to check them out before spending big bucks on new parts. He says it is important to cut costs whenever possible during tough economic times in order to maintain even the slimmest profit margins.
“We see it in the grocery stores and everywhere else, and the whole nation is seeing it,” he says. “Some (fleets) go ahead and buy new (parts) all the time, but you can’t really keep it up. The ones that do don’t seem to stay in business much.”
For many fleets, a consistent source of affordable, quality used trucks is as good as gold, and companies like Ryder are there to happily fill the void. Ryder group director of asset management and vehicle sales Gregg Nierenberg says since the company has always needed to remarket its old vehicles, they are well-positioned to provide quality used trucks, particularly in the medium-duty market. Ryder currently has about 6,000 vehicles available at 50 centers around the U.S. and Canada, about half of which are Class 3-5.
“The end users that we target are small delivery companies, parcel companies, landscapers, people that have pool cleaning businesses, various small business owners that have a need to distribute their product, like small furniture companies or food delivery services,” he says. “We also target small and medium-sized transportation and freight companies.”
With more than 150,000 vehicles in its fleet, Ryder has plenty of variety, and they know exactly how those trucks have been performing, which is another advantage for fleet customer, Nierenberg says.
“Unlike a lot of our competition that goes out there to buy a vehicle to turn around and sell it, Ryder’s in the unique position where we know where our vehicle’s been,” he says. “We have an extremely loyal base of customers, and they come back to us because of the quality product we offer.”
Nierenberg says it is hard to tell for certain whether the near-recession is forcing more fleet folks to look at used trucks because of shifting inventories and expiring lease contracts. Still, he says the bottom line is that business is good these days.
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The unseen benefits of remanufactured parts