A number of fleet representatives provided insights on their business operations during a panel session of the Heavy Duty Aftermarket Dialogue (HDAD). The supplier- and distributor-focused event, Heavy Duty Aftermarket Week (HDAW), allows industry representatives to share insights on different aspects of the heavy duty aftermarket distribution channel.
The panel, “Parts and Service: The Fleet Perspective,” consisted of the following individuals:
- Scott Reed, senior vice president of maintenance, Werner Enterprises
- Tanya Morrow, president, Ploger Transportation
- Bob Phipps, maintenance supervisor, Bettendorf Trucking
- Keshav Sondhi, director, fleet engineering and sustainability, PepsiCo
Panelists provided details on a variety of topics during the 90-minute session, including assessing resale value and lifecycle costs, maintenance management practices, parts procurement, and new vehicle technologies.
Assessing resale value and lifecycle costs
Discussing the challenges of specifying fleet vehicles, panelists shared their experience with specifying for fuel efficiency while managing the negative impact of lower resale value. Ploger Transportation’s Morrow advised the fleet to focus on specifying for fuel efficiency, but that has sometimes had an adverse impact on residual value. In particular, the resale value for trucks specified with lower displacement 11L engines and 6x2 axle configurations have not seen the same return as the traditional 13L engine and 6x4 axle configuration.
Morrow confirmed the specifications have served their fleet well for offering better fuel efficiency while still performing up to standards. However, industry perception impacted the perceived value of a second-hand sale.
“The acceptance in the industry isn’t where the OEs would like it to be,” Morrow said. “It did impact us negatively. However, [truck OEs] are really trying to change the perception of that; in the right application that’s a good spec.”
As it relates to vehicle specifications, assessing the full vehicle lifecycle plays an important role.
“We need to re-work our trade-in cycle,” said Phipps. "We try to avoid debt and have as much paid for as possible.”
He shared that the current fleet of 140 trucks ranges in age from pre-2000, 2010 to 2013, and brand new trucks. He adds that his operation is currently in the process of phasing out the 2010 to 2013 model year trucks due to the excessive downtime, caused in large part by aftertreatment issues.
“We’re trying to come up with the sweet spot,” Phipps added. “We are in the process of what is going to be our best trade-in [value].”
Currently, Phipps estimates it would be about a five-year lifecycle.
PepsiCo operates all vehicle classes. Regarding trucks, Sondhi shared that medium duty trucks - which operate in more regional and urban locations - are kept for about 10 to 15 years and well over one million miles, while Class 8 tractors stay in the fleet for about 7 to 8 years, on average.
Maintenance management
When it comes to maintenance challenges, a longstanding issue among most, if not all, fleets has been aftertreatment systems. Fleets have addressed this issue by cycling out old vehicles sooner. In the case of Werner Enterprises, Reed confirmed the average age of their fleet equipment is currently 1.8 years. Reed advised this short lifecycle has allowed the fleet to operate assets under full warranty, relying on the dealer for unexpected repairs.
Late-model vehicles have been well-received by a number of panelists, with Ploger Transportation’s Morrow and Bettendorf Trucking’s Phipps both noting that 2019 and newer trucks have been much more dependable.
Lifecycle assessments are not only trade-in value based, but also bring with them maintenance implications. DPF maintenance was discussed as a major factor in lifecycle assessment since DPF issues directly correlated to vehicle age. One solution was to lower vehicle age; another was utilizing remanufactured DPF units for older vehicles rather than maintaining the unit over the life of the vehicle. Furthermore, Phipps said that Bettendorf stocks every single DPF sensor available on the market since the fleet has many older vehicles. As well as having sensors on-hand, DPF cleaning is tracked and worked into the Bettendorf fleet’s preventive maintenance (PM) schedule.
In general, panelists agreed they conduct PM and some general repairs in-house. For larger or more involved repairs, they rely on their dealer network to provide those services.
“PM is our crisis management,” Morrow said. “We try to be on the preventive side ahead of time.”
With an understanding that there will be unplanned downtime, Ploger maintains units on-hand that are ready to go into service should another unit be out of commission. The fleet also keeps vital parts stocked to stay ahead of critical failures and keep downtime at a minimum.
A large part of dedicated in-house service means having qualified technicians. Morrow confirms they realize the value of these employees and make every attempt to recruit and retain technicians.
“Form a customer service perspective, we invest in the technicians training to ensure they know what they’re doing,” Morrow said.
“All trucks are on a strict maintenance schedule [since] we have to work around the short time during the day they’re not out on the road,” Phipps added.
He stressed the importance of valuing the driver’s time, confirming that conducting maintenance in-house makes the most sense for Bettendorf since the staff is most familiar with the weak points of the assets and can monitor those vehicle systems and schedules accordingly.
The nature of the business certainly plays a big role in how fleets operate. Reed shared his fleet’s experience switching to mostly dedicated routes from a previous majority of long haul, which has driven increased demand for vehicle uptime.
“Four short years ago, our fleet was 35 percent dedicated and 65 percent long haul, [but] we’ve done a complete flip flop,” Reed said. “It’s put a lot more demand on outside maintenance and getting relationships and agreements. We have great relationships with vendors, it's just created a much more demanding situation to get our equipment up and going.”
With that demand, Reed confirmed more of the services for the fleet have been outsourced than previously. Add to that the shorter lifecycle of Werner’s assets due to the newer equipment on-hand.
“Being 60-plus percent dedicated, we have to outsource,” Reed said. “Those trucks don’t come back to our terminals.”
Reed added that compared to five years ago when the shop averaged about 10 trucks per technician, the average has decreased to an average of 13.5 trucks per technician today.
“It’s reduced the need for technicians, plus the equipment is much newer,” he said. “The demand for heavy work, we don’t have that pressure like we used to. We have those failures, but they’re typically under warranty.”
Parts procurement
All panelists noted they have brand preferences when it comes to parts procurement and replacement. Additionally, perceived value - which panelists noted involves an evaluation of both the upfront cost and the performance and life of the part - is another notable factor in selecting parts. Plus, the part must be available when it’s needed.
“Rather than strictly on price, I buy on value and that means the beginning to the end of that parts life. It’s monitoring the cost per mile to see how that part fairs,” Bettendorf Trucking’s Phipps said. “At the end of the day, it comes down who can deliver a consistent good quality part at a price they can make a living at and we can afford and keep us from experiencing downtime.
“One thing about this industry is this is a people-based industry and initiative attitude and ability goes a long way as far as us looking at where we’re getting parts from,” he added.
Factoring the warranty claims is another issue Morrow noted. “As a small fleet we’re conscious of cost,” Ploger Transportation’s Morrow said. “But we tend to stay with the OE parts to ensure we don’t void warranty.”
Future technologies
Two panelists - PepsiCo’s Sondhi and Werner’s Reed - shared insights on the adoption and testing of electric vehicles in their fleets.
Reed advised they are currently testing out a fully electric Class 8 day cab tractor-trailer for regional hauling. He has found in real-world settings the range can be variable.
“One hundred and fifty [miles] is the expected distance, but as you add weight to the trailer that changes,” Reed said, about the varied range of the vehicle when hauling a heavier load.
PepsiCo currently operates 600 Class 6 battery electric vehicles (BEVs), said Sondhi. The vehicles are operating pickup/delivery routes within urban environments, traveling around 80 miles per day before returning to a terminal for the night. Sondhi emphasized that this particular duty cycle is prime for electrification.
Due to the scale of PepsiCo and the focus on addressing environmental concerns, Sondhi advised the company is looking to new technologies to address the company’s initiative to further reduce emissions. Specifically, the organization has set a goal that by 2030 the entire fleet of more than 70,000 assets will emit 20 percent less emissions than the company’s 2015 levels - while also accounting for potential growth over the next decade.
“That means we have to remove a lot of the traditional fossil fuels,” Sondhi said.
This requires continual assessment, testing, and adoption of alternative fuel options such as electric vehicles and renewable natural gas (RNG).
PepsiCo is committing to their greenhouse gas (GHG) reduction, Sondhi said, noting that the company currently has 53 alternative fuel Class 8 vehicles on order. These Class 8 vehicles will be operating last-mile delivery routes, traveling around 100 miles per day between eight and 10 hours per day. This is another duty cycle Sondhi said is conducive for electrification.
Of the 53 Class 8 vehicles PepsiCo has on order, 15 are full BEV and the other 38 run on compressed natural gas (CNG), powered by RNG. Sondhi recognized that the upfront costs for a vehicle running on CNG are more than with diesel, but if the vehicle is kept in-fleet throughout the full lifecycle - which is the current procedure at PepsiCo - the payback is well worth it.
"The upfront cost of a CNG engine is more, and the fueling cost is much more," Sondhi confirmed. "But we keep trucks past on million miles, so over the life of the vehicle it pays off. They (natural gas vehicles) are on parody if not better."
