Something Shiny And New in Your Garage?

The NTEA Fleet Purchasing Outlook shows work truck buyers are slowly and steadily updating equipment, not so worried about alternative fuels or engine technology.

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It’s that time of the year when you’re getting a good handle on the needs of your equipment fleet. By July, you’ve been working your trucks their hardest for several weeks and you know whether they’ve got the capacity and the reliability to serve the needs of your growing pumping company. 

Are you satisfied that your vacuum trucks are showing the durability you need, or are you worried that one or more of your daily route workhorses might let you down and wind up in the shop? Is your current work truck roster handling the demand for your services, or are you having to juggle appointments and schedule new pumping customers further out than you would like?

Let’s face it. You have to make hay while the sun shines, and you can’t afford to run without your major revenue-generating trucks for any period of time in the summer. You also can’t risk your reputation for prompt service by putting off customers when they call because you just can’t put enough rigs on the road.

STEADY IMPROVEMENT

If you’re having a great year so far, congratulations! Your pumping business seems to be mirroring a trend across North America. The long arc of economic recovery is showing a steady strengthening of the market for all work trucks, according to the 2015 Fleet Purchasing Outlook released by the NTEA, the Association For the Work Truck Industry.

The annual NTEA report shows trends that may help you as you consider new truck purchases to encourage growth and bring stability to your pumping business for this year and beyond. While the survey responses work across all industries that utilize work trucks – both in the public sector and among private service providers – they touch on some interesting trends in fleet-buying habits.

In a nutshell, there is evidence that work truck fleets are getting newer, and a large percentage of companies are contemplating major purchases. Also interestingly, companies are moving toward providing their own vehicle maintenance rather than hiring outside mechanics. And perhaps not surprisingly, the interest in alternative-fuel truck technologies has waned a little with falling oil prices.

“Given the steadily improving business climate, fleets are optimistic regarding purchasing plans. With available funding tracking even higher than last year, replacing older vehicles and exploring new truck productivity technologies appear to be key priorities,’’ Steve Carey, NTEA executive director, said in the survey introduction.

For perspective, respondents to the NTEA survey skew larger than the average pumping company. Only 6 percent of those surveyed have a fleet of less than 10 trucks. Companies with 10-50 trucks represent 21 percent of respondents, while 25 percent of the companies have 101 to 500 trucks. The biggest number of responses (43 percent) came from government fleet operators, while delivery/cartage (14 percent), construction (11 percent) and other (13 percent) might more closely fit service providers in the pumping industry.

THE SURVEY SAYS

There are some trends that would interest prospective truck buyers in the liquid waste industry. Consider these:

Truck fleets are getting newer

In 2014, 46 percent reported an aging fleet. That number shrunk to 39 percent in the 2015 survey. The majority of work trucks across all types of businesses (60 percent) are currently 5-10 years old. The number of trucks less than 5 years old actually declined a little, to about 20 percent this year. For companies running 10 trucks or fewer, the number of trucks less than 5 years old jumps to 36 percent. Interestingly, only companies with fleets of 51-100 trucks reported an average truck age of more than 20 years.

For 2015, 29 percent of respondents said they are exceeding their normal replacement cycle for trucks by one to three years. That compares to 33 percent in 2014. This indicates that companies are chipping away at the problem of aging fleets.

Companies are in the mood to update

Overall, 33 percent of respondents said they are looking to expand fleets this year, up from 30 percent in 2014 and 28 percent in 2013, indicating a slow but steady recovery. Another 59 percent said fleets will remain the same size. Private construction-related companies reported more plans to purchase, to a tune of 64 percent, up from 54 percent in 2014. By contrast, only 17 percent of municipal fleets expected to make a purchase in 2015. All told, 69 percent of respondents across the board expected to either maintain the same rate of truck buying or buy additional trucks in 2015 over 2014.

Buying rather than leasing

Outright purchasing of work trucks has been on the rise since the 2013 Outlook. This year, 72 percent of fleet buyers said they would do so through a direct purchase, while 15 percent said they planned to lease vehicles and the remaining 13 percent said they would utilize a combination of both purchase and lease options.

More fleet owners are turning a wrench

Most fleet owners are performing at least some of their truck maintenance in-house, and the trend is growing. For 2015, 80 percent of fleet owners reported doing their own truck maintenance, up from 71 percent in 2014. At the same time, 44 percent reported taking vehicles to outside mechanics, a number that’s slightly down from 2014.

Alternative fuels fell out of favor

Interest in new technologies aimed at fuel conservation is flagging, most likely due to dramatic oil price drops that peaked at the start of the year. Interest in ordering new trucks with improved fuel economy as a priority has flattened out, from 65 percent in 2014 to 64 percent of buyers this year. A drop in alternative fuel usage, from 37 percent in 2014 to 24 percent this year is another indicator that lower fuel prices are having an impact on technology. 

When buyers show an interest in alternative fuel technologies, they are most interested in compressed natural gas, E85, biodiesel and electric hybrid, though interest was down over both 2013 and 2014. When they explore alternative fuels, fleet buyers are most motivated by an expected reduction in operating costs (66 percent), initial acquisition costs (63 percent) and anticipated decline in life cycle costs (58 percent).

FORWARD THINKING

The NTEA Outlook leaves me with a few conclusions for the pumping industry:

First, time marches on, and haulers must march along with updated rigs if they want to maintain optimal efficiency in the field. Figures showing trucks in most small fleets are in the 5- to 10-year-old range seem about right. But when I talk to busy pumpers, they tell me newer is better when it comes to vacuum trucks; that an older service truck is more likely to suffer a breakdown at just the wrong time.

Second, interest in alternative fuels and hybrid or electric technologies might be down right now, but we’ll be talking about them again when the cost of gas and diesel inevitably rises again. Folks who expect a permanent decline in fossil fuel prices have a short memory or a poor grasp on the worldwide economic situation. You may not see a Tesla vacuum truck chassis in your garage anytime soon, but you better be open to exploring alternative fuel options when they come.



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