You can’t avoid the expense of service and repair, but routine, comprehensive PM does wonders for your budget.
Third in a series that examines how you can cut costs in five essential areas.
Faced with more expensive low-emissions engines in 2007, nearly half the owner-operators surveyed by Overdrive plan to avoid buying new anytime soon. Some will buy used, others will rebuild their current engines, and many will just keep on running what they have.
Those strategies have something in common, says Chris Brady of Commercial Motor Vehicle Consulting, who compiled the 2006 Overdrive Owner-Operator Behavior Report: They all drive up maintenance expenses. The longer a truck stays in service, the more expensive it becomes to service – no matter how well-maintained it is.
From checking tires and changing oil to replacing an alternator and running the rig through a truck wash, maintenance is so routine it’s easy to take for granted -until the bills start piling up. The average client of American Truck Business Services in Denver, which handles the books for 30,000 owner-operators, spent $9,706 on maintenance and repairs in 2005, or 7 percent of gross revenue, which averaged $138,497.
Maintenance is costly, but skimping on it is more costly still. Smart business owners keep their trucks and their wallets running at the same time. Here are some of the ways they do it:
- GET SERIOUS ABOUT PM
If you’re tempted to complain about a $100 oil change, remember skipping that oil change may necessitate a major repair that will cost $100 for each hour of labor, not to mention the parts, says former owner-operator Russell Fullingim, now owner of Truckers Financial Services in Corning, Calif.
According to some estimates, systematic PM can cut breakdown costs in half. A blown hose, tire or valve on the road can cost a lot more than a tow and a repair bill. Possible losses include income from that load and perhaps others you might have hauled if the rig weren’t in the shop.
“Regular maintenance prevents something bigger in the long run,” says Howard Abrams, owner of PBS Tax and Bookkeeping Service in Tarzana, Calif.
As a bonus, PM makes your engine last longer and burn less fuel. Recommended PM schedules are available from a host of sources, including truck, engine and component manufacturers, oil and lube companies, and the Technology and Maintenance Council of the American Trucking Associations, which publishes a Recommended Maintenance Practices Manual ($145 for owner-operator members, $195 for non-members).
Plan your maintenance schedule as thoroughly as you plan this week’s haul, and stick to it just as strictly. Using a calendar, a notebook or a software program that will send you e-mail reminders, plot such tasks as oil changes, major inspections and tune-ups. This is especially helpful for keeping track of stuff in the PM manuals that wouldn’t naturally occur to you – for example, adjusting overheads, replacing injectors and running a dynamometer test once a year.
If your schedule says it’s time for a tune-up, don’t put it off until that mystical eighth day of the week, “Oneday.” Losing a day to a scheduled service is better than losing 10 to an unscheduled breakdown, Abrams says.
While you’re setting aside time to do maintenance, don’t forget to set aside money to pay for it. ATBS advises clients to create an escrow savings account for maintenance expenses and build it on a cents per mile basis:
- 2 cents per mile for a new truck
- 3 cents per mile for a year-old truck
- 4 cents per mile for a 2-year-old truck
- 5 cents per mile for a 3-year-old truck
- 7 cents per mile for a 4-year-old truck
- 10 cents per mile for a 5-year-old or older truck
The financial consulting firm says this will help owner-operators avoid whipping out the plastic and incurring big finance charges just to pay for routine maintenance.
After scheduling and budgeting, follow through by keeping scrupulous records of the date, location, nature, cost and mileage of all the work done on the truck, small jobs and large. This bolsters any warranty claims and improves the truck’s resale value, but most importantly, it tells you vital information about your business.
“The more data owner-operators have, the better business decisions they can make,” Brady says. For example, such records will tell you how many miles you’re getting for each quart of oil and your maintenance costs per mile.
Also keep track of any expenses associated with repair work, such as unexpected motel bills and meals on the road. Those can be part of any warranty claims.