Ohio Gas Association

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Ohio Gas Association

• Understanding Fleet Cost
• The Real Numbers

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Fleet Expense
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Fleet Mix

• Fleet mix is the ratio of vehicles to trailers
  to power operated equipment (POE) within a
  utility fleet.
• This ratio can have an impact on cost per
  vehicle (CPV). The majority of a utility fleets
  costs are in the vehicles.

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Cost Per Vehicle (CPV)

• The annual cost per vehicle is derived by adding
  ownership cost, operating cost and overhead cost
  for all vehicles (units that operate on roads)
  divided by total number of vehicles. Vehicles
  are defined as any unit that operates on the
  road.
• Ownership Cost leasing, rental, depreciation,
  interest and licensing
• Operating Cost company mechanic labor, contract
  mechanic labor, parts and fuel
• Overhead Cost management support, facilities,
  shop supplies
• Major cost drivers impacting CPV are fleet mix,
  fleet age and type of vehicles in the fleet.

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Annual Cost Per Vehicle (CPV)
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Percentage of Total Cost

Why??
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Average Purchase Price

• How much a utility pays for vehicles and
  equipment directly impacts ownership cost and
  total cost. Purchase price is driven by a number
  of factors. However, one of the biggest cost
  drivers is how a company designs and specs the
  vehicles they purchase.
• Benchmarking studies have determined that the
  companies achieving the lowest purchase price per
  vehicle are also among the lowest CPV utilities.
  

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Fleet Age

• Fleet age looks at the average age per unit,
  vehicle, trailer and POE within the total fleet.

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Lifecycle

• Lifecycles are defined as the time period
  between when a vehicle, trailer or POE is
  purchased and when it will be replaced by a new
  vehicle, trailer or POE.

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Lifecycle Summary
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Utilization

• Utilization can be measured several ways
  annual miles driven, annual engine hours, or
  actual
• check out hours.

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Best Practices Benchmarking Results

• Vehicle Acquisition
• 87 lease all or a major portion of equipment
• 13 own all or major portion of equipment
• Equipment Disposal
• Cars/LD Vehicles 69 use commercial auction while
  31 use company auction
• HD Trucks 68 use commercial auction while 14
  use company and 18 trade in
• Accidents or Abuse
• 64 charge back directly for accidents and abuse
• Warranty Recovery
• 77 do have a warranty recovery program

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Best Practices Benchmarking Results

• Work Outsourced
• 69 outsource 20 or less of fleet maintenance
• 22 outsource between 21 and 40 of fleet
  maintenance
• 9 outsource more than 40 of fleet maintenance
• Parts Inventory
• 4 have all of their parts on consignment
• 66 have no parts on consignment
• 30 have a some parts on consignment
• Chargeback System
• 79 use the average cost of vehicle class for
  chargeback rate
• 21 use the actual cost of vehicle for chargeback
  rate

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Best in Class Strategies

• Best in class strategies are defined as
  strategies that are allowing utility fleets to
  reduce their total fleet cost. There is no one
  measure to define best in class because of
  variables like, fleet mix (light duty vs. heavy
  duty fleet) and vehicles count (is a utility
  spreading cost over too many vehicles). It
  appears that BIC fleets have the following in
  common
• Below average purchase price on standardized and
  properly specd equipment
• Average age of vehicles that is younger than the
  participant average
• Consistent replacement plan
• Right sized fleet, with consistent utilization
• Appropriate percentage of outsourced maintenance,
  with higher unit and vehicle per mechanic ratios
• Higher unit and vehicles per support staff ratios