3 ways new equipment can help realize hard- & soft-cost savings

Construction companies with heavy-duty trucks are increasingly realizing the need to upgrade the trucks in their fleet more frequently, replacing older, less-efficient units that cost more to operate and produce harmful emissions. According to the Truck Lifecycle Data Index, construction companies with heavy-duty truck equipment can realize a first-year, per-truck savings of $16,928 when upgrading from a 2015 Class 8 sleeper-model truck to a 2020 model. For a fleet of 100 vehicles, the savings can reach $1.7 million.

Fuel efficiency and maintenance expenditures are much lower on new trucks and account for a large portion of “hard-cost” savings, which are critically important to distinguish, especially when every organization is laser-focused on their total cost of ownership to be competitive. However, aside from these hard-cost savings, there are also several soft-cost benefits that contribute to an organization and its bottom line when making acquisition decisions.

1. Newer Trucks Are Safer

More fleet managers are now paying attention to their trucks’ safety obsolescence in addition to their economic obsolescence—it’s just as important to replace an older truck for safety benefits as it is for economic reasons. From truck components that have been around for decades, such as brakes and tires, to the latest technological advancements, like stability control and lane-departure systems, safety tech has made drivers and roads safer.

According to the National Transportation Safety Board (NTSB), close to half of all two-vehicle crashes from 2012 to 2014 were described as rear-end collisions. Of these crashes, 87% were the result of drivers not paying attention to the traffic ahead. In a 2015 study, the National Transportation Safety Board found that collision avoidance systems could have prevented 1,700 fatal rear-end collisions annually.

As a result of this increased visibility, the inclusion of collision warning systems on heavy-duty trucks saw a 28% increase in 2017 and a 39% increase in 2018. Volvo was early to adopt electronic stability control and equip their trucks with updates made as early as model year 2006, prior to the Federal Motor Vehicle Safety Standards No. 136 Mandate in 2017. By model year 2018, all major original equipment manufacturers (OEMs) started adding collision avoidance and lane departure to their standard package offerings.

Confirmed by the Virginia Tech Transportation Institute, 6 out of 9 carriers reported that adopting at least one advanced safety technology significantly improved safety outcomes. Therefore, prioritizing safety and adding advanced technologies can have a significant effect on improving a construction fleet overall.

OEMs are all major contributors to and proponents of safety. Many OEMs include safety features as a part of their standard specifications and require end users to opt out if they are declining these features. Eventually, OEM standards will include forward video monitoring, blind-stop monitoring and lane correction.

2. Older Trucks Make It Difficult to Attract Drivers

In addition to better safety, drivers and technicians want to drive and work on newer trucks that come with advanced technology. Drivers want more comfort, less fatigue and more time at home. Newer trucks allow companies to entice new drivers with advanced vehicles, rather than use expensive sign-on bonuses when hiring.

The new equipment can also play a major role in preventing drivers from leaving to go work for other companies. Aside from sign-on bonuses, it can be expensive to onboard new drivers. In a recent webinar titled “Addressing Today’s Transportation Challenges,” Paul Mugerditchian, president of Dot Transportation Inc., stated that it can cost up to $10,000 to onboard a new driver.

3. Corporate Image & Sustainability

With the push to move toward greener business methods, clients want to conduct business with companies that emphasize their commitment to sustainability. Continuously updating a fleet encompasses many facets of sustainability, including optimizing vehicle specification to be more fuel efficient and aligned to the duty cycle and geographic locale; specifying lighter components and allowing for longer maintenance intervals while also reducing hazmat disposal; and disposing of pre-owned equipment to a secondary market, providing more fuel-efficient vehicles.

A shorter life cycle conserves fuel resources, reduces emissions and provides a cleaner environment. Upgrading to a 2020 Class 8 model year truck from a 2015 unit, for example, would reduce carbon emissions by 126 metric tons and nitrogen oxide emissions by 12%.