Many governments were forced to cut back during the recession, with fleet replacements at the top of the list. Public fleet managers were faced with the challenge of keeping vehicles on the road longer than expected, and dealing with the rising maintenance costs that came with it. Vehicle delivery delays now pose a new problem.
As the economy continues to recover, many fleets are now able to replace the vehicles they put off replacing, now down to their last leg. Unfortunately, when replacement vehicle deliveries are delayed, the fleet is often left to run old vehicles, accumulating the costs it wanted to avoid by purchasing the replacements.
The vehicle procurement process involves many parties, from automakers and equipment manufacturers to upfitters, and any delays along the line can slow the whole process down.
Parts delays, quality holds, and high demand can lead to production delays from the OEM. Automotive Fleet reported on a number of delays over the past year. A steel factory explosion led to shipment delays for the 2016 Toyota Prius. Parts issues slowed shipments of Ford’s 2017 Super Duty. The Takata airbag recall led to production delays for a number of OEMs. Lead times for the Ram ProMaster increased after a large portion of the models were allocated to the U.S. Postal Service. Transportation delays can also affect shipment, especially for imported vehicles.
Amanda Wilson, CAFM, fleet services manager for Indiana University, said her fleet’s order-to-delivery time can be as long as 11 months. Although delays are an issue she has always faced, Wilson has noticed the problem has grown in recent years.
“It seems that over the last couple of years, at key times, it has been more of a challenge than it had been in the prior eight to 10 years,” she said. “The delays seem to be more on the upfit side, because those businesses seem to be very busy right now.”
Upfitters face their own challenges. The demand for upfitting has increased, with larger volumes of vehicles to work on and more complex work to be done.
All About Timing
Indiana University leases vehicles year-round, which helps mitigate the risk of one late order. Timing is an important factor in procurement, since the time of year that an order is placed can affect its chances of delays.
David Gunderson, mechanic, manages all fleet matters for the City of Saint Peter, Minn. The city runs a 20-year replacement plan and generally purchases eight to 15 pieces of equipment per year. It does not accommodate fleet expansions, however, so if a new vehicle or piece of equipment is needed, Gunderson must choose to delay replacement of another asset.
Purchases are generally made at the beginning of the calendar year, but Gunderson will occasionally space out purchases throughout the year. He has run into delivery issues with summer orders, as many OEMs switch model years around the same time. Over the years, his orders have been pushed into the next model year after ordering, which in turn pushed back production time until the OEM was caught up on the previous year.
Last year, Gunderson planned on replacing his own fleet vehicle, a Class 2 pickup. He ordered a cab chassis and service body according to schedule, but found that the OEM had faced delays in production and cut off orders for 2014. He ordered a 2015 cab chassis, though production wasn’t expected to begin for another three months.
The chassis arrived in January, but the service body production was also running late. It did not arrive for another two months and he finally received the finished vehicle from his upfitter in April, 10 months after ordering.
Gunderson now chooses to place orders earlier in the year or in the fall when model years have switched over.
“Factories are pushing to finish orders and then they take a week off to make switches and you never know how many pending orders or carry-over orders are sitting there when they come back,” he said.
A Vicious Cycle of Repairs
Slow order-to-delivery times can lead to additional expenses. While waiting on the order, fleets must repair the old vehicle to keep it running past its planned life cycle, which means additional expenses.
During the wait, Gunderson continued to use his old fleet vehicle, a 1994 pickup, and worked to minimize expenditures by limiting his vehicle to the main part of the city rather than venturing into the more rural areas. Rather than replacing tires on his truck with new ones, he did an early replacement on another vehicle and kept the used tires for himself. However, he acknowledges that this instance was easier for him to work around; if the delay was on someone else’s vehicle, it would have required more work and expenses to keep it going.
“Stick to your replacement plan. Try to not stretch the life of equipment because you will end up in a situation where you will be required to make an expensive repair and then feel obligated to hang on to that piece for an even longer period, which usually leads to a vicious cycle of repairs,” he said.
As many government fleets wait as long as possible to replace vehicles, keeping the old vehicle running is not always an option.
“We have to keep the previous vehicle longer than anticipated, which often means we’re spending more on repairs and maintenance than anticipated when we set our original life cycles,” Wilson said. “In some cases it does require us to hold on to a vehicle that’s been retired from another department and move it over for short-term use so we can cover the gap where we’re waiting for those new vehicles or those vehicles that are being upfitted.”
The university is also able to “borrow” from its motor pool when needed, though it is only stocked with passenger vehicles and vans.
After facing so many delivery delays, Wilson said the university has made some changes to its replacement schedule, beginning the process earlier than in previous years.
“We are trying to address replacing vehicles in advance of our lease term ending so we can try to limit the time that we are struggling to wait for that new vehicle to be delivered,” she said. “We’ve adjusted slightly, bumping it up a couple of months to try and cover that gap.”
When dealing with delays, Gunderson also noted the importance of keeping others informed. He now keeps city and department heads aware of aging vehicles so they understand which vehicles will need replacement soon and which replacements cannot be pushed back. He also pays closer attention to delivery dates to make sure vehicles are fit to continue running.
Gunderson advises fleets to consult their dealer about any delivery concerns, as many larger dealerships can provide an estimate on lead times. Manufacturer fleet websites are also helpful, because they often provide vehicle delivery information and regular status updates.
“I have three trucks ordered right now and have it set up to receive daily e-mails on where they are in status and what the factory expects for a time to come off the line. This is useful in timing the arrival of other equipment needed for the vehicle,” he said.