Trucking Toolbox: Benchmarking Transportation Maintenance Costs

In the transportation industry, a frequent question among fleets is how their maintenance costs stack up against those of similar carriers. However, benchmarking these expenses poses a significant challenge due to the diverse variables at play. These include factors like the average age and types of equipment used, the mix of in-house versus outsourced maintenance work, tire specifications, the geographical area of operations, the size of the workforce, mechanic pay scales, and the reporting methods employed to track maintenance costs.

To effectively compare maintenance costs, it’s crucial to consider various metrics, such as cost per mile and cost per unit. Although there are services and associations that offer benchmarking information, obtaining a true comparison that reflects similar business models and maintenance strategies is difficult without an in-depth review of the reporting practices of the companies being compared.

To tackle this challenge, three main comparison approaches are recommended:

1. Adopt Standardized Cost Categories: Developing and using standardized categories for maintenance costs across all operations can help in making more accurate comparisons. This approach involves classifying costs into detailed categories such as labor, parts, and material/supplies, enabling companies to pinpoint specific areas where they may be spending more or less than the industry average.

Examples:

1. 1. 1. Labor – Break out costs between technicians and administrative/ leadership costs and hourly rates, overtime, and benefits.
      2. Parts – Broken down in fleet maintenance software by category (VMRS) to include engine components, brake system parts, electrical components, and more.
      3. Outside Vendor Costs – By categorizing outside vendor costs uniformly, companies can assess the efficiency of outsourcing decisions and negotiate favorable terms with service providers.

2. Utilize a Comprehensive Database: Through our work with a trusted maintenance industry partner, KSMTA has compiled a robust database of maintenance costs from carriers we’ve helped encompassing more than 22,000 power units and 65,000 trailer units. This database enables reliable cost comparisons on a per-mile basis, offering fleet leaders valuable insights into how their operations measure up against industry benchmarks.

Examples:

1. 1. 1. Identification of Costs Trends – If a fleet’s maintenance costs per mile have been steadily increasing, it may prompt initiatives to improve asset reliability or enhance preventive maintenance programs.
      2. Capacity/Demand Comparison – If a fleet’s labor costs per mile are higher than the industry benchmark, it may indicate the need for optimizing staffing levels or improving productivity.
      3. Benchmarking of Outsourced Maintenance Costs – If a fleet’s outsourced maintenance costs per mile are higher than industry averages, it may indicate the need for renegotiating service contracts or bringing certain tasks in-house.

3. Segment Cost Data by Age Bands: By analyzing maintenance costs in relation to the average age of the equipment, a more precise comparison can be achieved. Segmenting costs into 12-month age bands for critical areas such as tractor and trailer repair, as well as tractor and trailer tire expenses, allows fleets to identify both areas of efficiency and those requiring improvement. It is essential to ensure that reporting procedures are consistent for these comparisons to be meaningful.

Examples:

1. 1. 1. Maintenance Costs – These costs vary by age of fleet. For example, a new tractor will see lower repair costs in the first few years until major wear items require replacement (i.e., tires, brakes, and air systems).
      2. Fleet Managers – Teams can utilize the data to identify trends such as increasing repair costs as vehicles age and adjust maintenance strategies accordingly including implementing more proactive maintenance for older vehicles.
      3. Decision Making – This information helps optimize maintenance schedules, prioritize repairs, and budget for replacement parts.

The strategies outlined above are designed to make benchmarking maintenance operations more efficient. However, discussions are still needed to develop a consistent measuring system and data points that carriers all use to provide more accurate benchmarking results. Enriching the maintenance benchmarking process will ensure its ongoing relevance and value to transportation companies.

To learn more or discuss any of the ideas shared above, please contact a KSMTA advisor or complete this form.