Buying a new refuse truck is about more than sticker price. Spec a vehicle that offers the lowest possible cost over the long run.
Proper life cycle cost management for refuse trucks may seem like a very old saw in the waste business — a theme harped on again and again — but it's a mantra that's taken on new importance in the current economic crisis. And the key to effective life cycle cost control can be boiled down to two words: “component specification.”
Roy Svehla, senior manager of fleet maintenance for Phoenix-based Republic Services, says the vast changes in truck design in the last few years — driven largely by strict new emission regulations — put a premium on good spec'ing strategies.
“The last five years have been unprecedented in the trucking industry,” Svehla says. “New emissions equipment has put extreme pressure on vehicle specs. Additionally, the extra weight of emissions equipment negatively impacts payload capacity, with chassis layouts changing to accommodate additional emissions-related hardware. As a result, the specification process has become more challenging and more critical in the last couple of years.”
Chassis prices rose in 2007 and will do so again with the upcoming 2010 federal emission regulations. Spec'ing longer-lasting components and using warranties can help offset those increased costs, Svehla adds.
The Right Mix
For Svehla, effective spec'ing is fairly simple. It's a process of finding the balance point between service and cost, while trying to standardize the vehicle as much as possible.
“We are developing standardized vehicle specs that are consistent with industry standards and designed to meet the extreme demands of our business,” Svehla says. Republic is trying to standardize axle weights and horsepower ratings as much as it can to save money at the front end when purchasing as well as through the life of the trucks through more unified maintenance practices.
“Reducing the number of chassis/body combinations is paramount in our specification process,” says John Lemmons, director of fleet and equipment performance for Houston-based Waste Management.
More standardized and thought-out specs give refuse fleets more options as their equipment ages, says Darry Stuart, president of Wrentham, Mass.-based DWS Fleet Management Services, a firm specializing in fleet maintenance issues. “When you go to buy a new truck these days, you should spec it to last 10 years at least,” he says. “You may think you're going to keep it for only eight years, but if you reach year eight and you're in an economy like we're in now, you'll want to be able to run it another year or two. That's the flexibility a properly thought-out spec'ing strategy gives you.”
Investing, Not Spending
When spec'ing a vehicle, it is important to remember that the lowest-priced equipment does not always provide the lowest costs over the long term, Lemmons says. One mental “trick” that Svehla uses to get around the natural anathema to spending money on new trucks in a down economy is to replace the word “spend” with “invest.”
“It's all about changing your viewpoint,” he says. “Instead of looking at the spec'ing process as ‘spending’ money, you flip it around and view it in terms of ‘investing’ money, as in ‘if I invest in X-Y-Z component, how does that improve my return over the life of the vehicle?’”
He uses synthetic fluids as an example. Investing in the highest grade synthetic hydraulic or transmission fluids yields not only longer service intervals — lowering maintenance costs — but also extends warranty coverage from the manufacturer. That measurable return comes as an opportunity for investment, Svhela says.
“There's a direct correlation between the specs you choose to keeping that truck on the street,” Stuart says. “You can't skimp on your specs if you expect to see a return on your investment, and that return is uptime.”
The other return on the right spec'ing investment is a vehicle that is better equipped to deal with the broad impact that emission regulations are having on truck designs, Lemmons says. The federal 2007 emission requirements have added several hundred pounds of equipment to trucks. Consequently, “we have had to address body placement, chassis wheelbase and body capacities in order to optimize the payload while at the same time maintaining compliance” with regulations such as those for gross axle weight and gross vehicle weight, Lemmons explains.
The upcoming 2010 emission requirements will require haulers to make additional changes to truck specs.
“In this day and age of tight emission regulations, rising steel prices, and high fuel costs, it's a tough situation as it makes refuse trucks more expensive,” Stuart says. “You can't raise fees fast enough to cover escalating costs — everyone is scrambling to get margins — so the only way to generate more revenue is to make the truck last longer.”