September 11-15, 2017
Category: Fleet

Report from the Road

Participants in this year’s Vehicle Trends survey shared a wealth of detail about the inner workings of their beverage delivery fleets and also represented our most diverse array of respondents yet.

For instance, respondents this year were pretty evenly split amongst the different types of beverages they carry or produce, providing an interesting cross-section of the overall beverage market’s fleet operations. The majority (65%) handle bottled water, followed by beer (62.5%), then New Age beverages (57.5%), Soft Drinks (51.3%) and then Wine & Spirits (40.0%).

They were made up mostly of beverage distributors/wholesalers (80%), with about 17.5% manufacturers/bottlers, and 2.5% classifying themselves as full-line supermarket/convenience store distributors. Also, the majority had annual sales of $50 million or more (51.3%), followed by between $10-$49.9 million (35%) and about 13.8% under $10 million.

Respondents were also fairly evenly split across the U.S. this year, with most, 30%, stemming from the South, followed by 28.8% from the Central U.S., 23.8% from the West and 16.3% from the Northeast. Also, one respondent came from outside the U.S.

The survey was conducted January and February of this year.

Types of Vehicles
Again this year, the full-size van was the most commonly used vehicle by beverage distributors in our survey, with almost 90 percent of respondents reporting they use them. An interesting change from last year is that pick ups displaced side-loaded beverage bodes or trailers in the No. 2 slot. The side-loaders actually fell a few slots to No. 5 this year as their popularity continues to fall. Amongst beverage producers, however, the pick up trucks reign supreme, with full size vans further down the list in the No. 7 slot. Interestingly, there was a marked increase in the popularity of refrigerated vehicles among the distributors.

Vehicle Configuration
Conventional trucks with side-load bodies continue to be the most popular vehicle configuration among both beverage distributors and producers surveyed. Almost 70 percent of beverage distributors use that type of truck configuration and 42 percent of beverage producers employ trucks with side-load bodies. Tractor trucks with a 48-foot dry van trailer also are used by more than 50 percent of respondents.

Alternative Fuels
Ethanol was the No. 1 alternative fuel used by respondents to this year’s survey, though there was a marked difference when it came use by distributors and producers. More widely used are hybrid electric vehicles and natural gas vehicles and also propane. Natural gas is increasing in popularity, however, with a strong 23.1% of producers saying they will employ them in the next 12 months.

On-Board Technology
Everyone wants to get a better handle on where their vehicles are, as evidenced by the strong showing of Remote Vehicles Location/Tracking across the board when it comes to on-board technology. Followed closely behind is technology that allows drivers to see what’s either behind them or in their blind spots. This makes sense, as Vehicle Safety was the most commonly cited concern of beverage fleets this year.

Major Concerns
As reported in the On-Board Technology section above, Vehicle Safety is by far and away the most important concern among fleet managers this year, cited by more than 60% of respondents across the board, in every category of company. Interestingly, an issue that gets the most headlines, Environmental Impact, was the lowest concern of beverage fleets.

Buying and Leasing
Vehicles are a big investment, but a majority of the beverage distributors and producers surveyed have plans to either buy or lease new cars, vans, SUVs and trucks in the next year.

The types of vehicles beverage operators plan to invest in varied and Class 6 and 7 tractors, Dry Van Bodies or Trailers and Compact Vans rounded out the top 3 choices. Along with compact vans, about 30 percent of beverage distributors also plan to buy or lease passenger cars, indicating that many operators are moving to smaller vehicles.

With rising fuel costs and an increasing focus on being green, it’s surprising that respondents did not show more interest in buying or leasing eco-friendly vehicles such as hybrid cars and trucks, natural gas fueled vehicles or other alternative fuel trucks. However, there is high interest in those vehicles from operators who already use alternative fuel vehicles. For instance, 42 percent of respondents who already operate hybrid vehicles plan to buy or lease more hybrids in the next year. Sixty percent of those surveyed who already operate other alternative fuel vehicles plan to invest in more of those vehicles in the coming year. This indicates that once beverage distributors and producers invest in greener fuel options, repeat purchase is generally high. But perhaps the challenge for operators is making that transition from conventional fuel trucks to alternative fuels and hybrids vehicles.

Looking ahead to the following year, beverage distributors and producers plan to invest in other vehicle configuration options. For instance, 10 percent of respondents plan to add tractors with 40-foot dry van trailers to their fleets. More producers (21 percent, to be exact) plan to add tractors with 48-foot dry van trailers than distributors in the next year.

When it comes to refrigerated vehicles, only 6 percent and 3.8 percent of respondents indicated interest in adding tractors with refrigerated van trailers and conventional trucks with refrigerated bodies, respectively, to their fleets next year. Although, the most interest in refrigerated trucks was shown by operations that have more than $50 million in volume sales as these respondents were the only ones planning to add tractors with refrigerated trailers and cabovers with refrigerated bodies. This indicates that bigger operations are carrying specialty products such as craft beers, wines or dairy-based drinks that require temperature-controlled environments. However, 9 percent of respondents with sales under $10 million also plan to add conventional trucks with refrigerated bodies, which shows that even smaller operations are carrying a varied cross section of beverages.

Vehicle Lifecycle
Beverage fleets seem to be getting more miles out of their trucks this year. The lifecycles of the vehicles increased compared with last year’s survey. While only 13.8% reported in 2013 getting 15 Years or More from their trucks, that number increased to 18.7% in this year’s survey. And the stats is even more impressive when you look at 11 to 14 years, going from 12.8% last year to 22.7% this year.

When it comes to beverage fleet maintenance and service, it’s not surprising that tires, engines and brakes top the list of the costliest vehicle maintenance areas. As the most used parts of the vehicle and with the number of miles that beverage fleet vehicles travel, maintenance on those particular parts will definitely add up.

Unscheduled repairs, and the associated downtime with those repairs, also drive up the cost of fleet maintenance. Respondents reported that 58 percent of unscheduled repairs were in the area of starting and charging, which includes the alternator, the battery or the starter. Problems with engines contributed to 57 percent of unscheduled repairs, according to respondents, while liftgate repair made up 40 percent of unexpected repairs and downtime.

When it comes to where fleet vehicles are serviced, it seems distributors and producers with annual sales volume under $10 million are much more likely to outsource fleet service and maintenance with 80 percent using a local service center and another 20 percent using a dealer service center. Larger operations, those with sales of $50 million or more, were the only respondents reporting using their own on-site shop and nearly half reported having a full-service maintenance contract with a regional or national firm. However, most of the operators surveyed (97.7%) still perform preventative/routine vehicle maintenance in-house to keep trucks on the road and prevent bigger, costlier repairs.

Many operators surveyed had found that keeping some basic parts inventory helps to drive down maintenance costs. When it comes to oil, batteries, tires, electrical components and brake components, the majority of respondents keep those replacement parts and maintenance materials handy as part of inventory. That number drops when it comes to more complicated parts like engine and transmission components.

With bigger operations typically having bigger vehicle fleets and therefore more trucks to service, it stands to reason that those larger operations would have higher parts and maintenance materials inventory costs. For those businesses that operate with annual sales volume of $10 million or more, 40 percent spent $40,000 and up on parts and maintenance inventory. In comparison, 83 percent of operations with annual sales of $10,000 or less spent $2,000 to $19,999 on parts inventory.

Tire Trends
There’s a reason why tires topped the list of the costliest areas for fleet maintenance. Beverage distributors and producers have to keep an inventory of new tires to keep trucks moving on the road. Half of respondents purchase between 25 to 99 tires a year. And almost a quarter (22.9%) of those surveyed buy between 100 and 249 tires annually. And bigger operations tend to have larger fleets, which means more tires purchased annually. Sixty percent of businesses that operate with annual sales less than $10 million buy between 25 to 49 tires a year. 

Businesses that bring in $50 million or more in annual sales reported buying a great quantity of tires — almost half (48.5%) buy between 50 to 249 tires a year and almost a quarter of respondents in that segment purchase 250 or more tires annually.

As far as brands, there was no clear standout as respondents said they favored Bridgestone and Michelin with Goodyear coming in at a close third. A very small percentage of those surveyed report using third party vendors that supply generic re-caps, so it seems most distributors and producers favor brand-name tires.



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