Features
2 Nov 18

U.S. fleet costs up for first time in 5 years

For the first time in 5 years, the cost of operating vehicle fleets in the U.S. has increased. The rise is mainly due to increased fuel costs, writes Automotive Fleet. But there are other factors.

The magazine’s 27th annual operating cost survey – covering a total of just over 800,000 commercial fleet vehicles – also lists higher prices for replacement tires and maintenance work as contributing factors.

High and stable

Fuel represents around 60% of the average fleet’s total operating cost, so the rise in fuel prices over the past 15 months to their highest level in 4 years has been a major factor in higher fleet operating costs in the U.S. 

Fuel prices (pictured: prices from a bygone era) have remained high and stable since peaking in the spring, with West Coast prices highest and Midwest and Southern fuel prices considerably lower.

The estimated cost of petrol for an intermediate car in 2018 ranges from $99.7 per month (with an annual mileage of up to 24,000 miles) to $178.92 per month (80,000-100,000 miles). That’s about 80% and 70% of total operating cost per month, respectively.

Right-sizing fleets

In compensation, U.S. corporates are ‘right-sizing’ their fleets, focusing on fuel efficiency, vehicle weight and drivetrain choice, among other factors; and optimising vehicle usage via telematics. With global fuel prices forecast to rise slightly over the next 12 months, those trends are likely to persist.

The impact of President Trump’s trade wars on the price of importing petroleum, vehicles, steel and aluminium will also be consequential to fleet costs, although it is hard to predict to which degree.

Replacement tires

Crude oil is one of the main components used in tire manufacture. Higher oil prices therefore also mean higher prices for replacement tires. As the relevant commodities have increased by 5-10% in 2018, it is likely that they will continue to increase in price. 

The rising cost of labour, for its part, is placing upward pressure on the cost of maintenance work – still just 10% of overall fleet operating costs in the U.S. That share is not expected to rise dramatically.

Authored by: Frank Jacobs