Trucks are the backbone of waste management service. While these workhorses of the road allow operators to do their job day in and day out, there comes a time when it makes more sense for a company to retire a waste vehicle than to keep it in operation.
When the pandemic hit last year, plenty of waste management companies began looking at their assets to determine what costs they could save on. One of the biggest was fleet management, says Matthew Callier, the director of national accounts for Big Truck Rental.
“The pandemic slowed down the pace of collection,” Callier says. “So, companies have been able to reassess their fleet and what they could potentially move.”
Big Truck Rental, based in Tampa, Florida, has vast experience in helping companies with their fleet management needs through its rent and rent-to-purchase options. The vehicles in the company’s fleet include front loaders, rear loaders, side loaders, roll-offs and grapple trucks.
Through the company’s experience providing vehicle solutions for its customers, Callier says he has identified several benefits to retiring a truck at the proper time.
There are a few variables that impact how long a waste truck can remain operational. This includes the preventative maintenance strategy employed by the company, driver behavior, the type of truck used and geographic environment, Callier says.
“Typically, companies run side-load and front-load trucks for 11 years, rear-load trucks can run for 15 years and roll-off trucks last for 16 years [on average],” Callier added.
While these are averages, how the truck is handled by its drivers plays a crucial role in determining its lifespan. If the operator isn’t properly trained, they could get in the habit of making costly mistakes like excessive hard braking or taking sharp turns. These behaviors can put excessive wear and tear on the truck and the various moving parts that allow it to operate, Callier says.
Another thing that needs to be considered is the type of truck being used. For example, a side-load truck typically sees more action than a roll-off truck, Eric Voss, the company’s vice president of sales, says.
“A side-load truck could have hundreds of stops a day versus a roll-off truck which may pick up anywhere from six to 16 containers a day,” Voss says. “Plus, these have a lot fewer moving parts compared to a side-load truck.”
Signs it is time to say goodbye
Some signs companies should look out for when deciding whether to retire a truck include large component failures and increasing maintenance costs.
“Usually, you’ll start to see some of this stuff happen in the fifth year of operation,” Voss says. “If you haven’t taken diligent care of your vehicle, you could see that come earlier. Your variable maintenance costs become more sporadic if you don’t take care of your fleet.”
A straightforward way of tracking whether an operator should retire a truck or not is looking at its hourly costs, Callier says. Once the costs outweigh the hours the company is running the truck, it is time to consider retiring it.
“That’s the major factor that a company should start to consider—whether it makes sense to keep putting money into an older truck or retiring it and putting a new truck into the fleet,” Callier says.
The risks of hanging on
While it may seem to make sense to push a truck to its limits to get the most from the investment, Voss says there are potentially severe consequences to doing so. Not only could profits be impacted, but reputation and even legal issues could arise if a truck fails in the field.
“One downed truck could put you behind your routes for a day or two while you’re servicing those residents.” –Matthew Callier, director of national accounts, Big Truck Rental
“The biggest issue is if you have trucks in the field breaking down, and then you’re not completing routes,” Callier says. “Then you’re scrambling at the end of the day because you have trucks that should have been retired, and now you’re [doing what you can] to complete those routes. It’s a waterfall effect. One downed truck could put you behind your routes for a day or two while you’re servicing those residents.”
While the financial consequences of running a truck too long could hurt a company’s bottom line, there are other consequences to keeping a truck in service longer than its lifespan allows, including legal issues. For example, municipalities could fine a company for liquidated damages if the waste management company fails to complete a route, even if a truck breaks down. Additionally, there is the potential for litigation following an accident if operators keep a truck on the road when it should have been retired.
By being proactive, operators have the potential to remove a number of variables that can lead to problems and negate worst-case scenarios in the process.
Maintaining the fleet
While goodbyes are never easy, Voss says there are a few ways a company can maintain its fleet to get the most value out of it. The main factor in maximizing the life of a truck is having a good workplace culture.
“The best way to maintain your fleet is making it a part of the culture,” Voss says. “Instilling pride throughout the organization in maintaining trucks and giving employees the tools and knowledge to maintain the trucks is extremely important.”
A well-crafted preventive care program is one of the ways Voss suggests a company reinvest in its employees and vehicles. Additionally, developing safety programs for operators can ensure they properly handle the equipment while on the road, Voss says.
Companies can also use telematics and other software to track what parts of their trucks need to be inspected, repaired or replaced. Companies can increase fleet efficiency by always knowing what work needs to be done when on their trucks.
Building a fleet economically
Companies looking to invest in new fleet equipment without breaking the bank can do so by looking into lightly used trucks. Additionally, renting trucks can help companies in a variety of ways, Voss says.
“Haulers growing their business through acquisition exercise rental to maximize their internal rate of return (IRR) on their cap ex. Rather than tying up their capital in new trucks, they will rent a portion of their fleet while putting that capital towards acquisitions for a higher IRR,” Voss added. “Nationwide haulers would benefit from renting because it keeps the company’s existing fleet in a rotation. This helps companies keep track of maintenance and not have trucks unused in their fleets.”
The money saved through renting can also be used to help the company grow its more profitable parts of the business.
“There are a lot of times when a contract requires all-new trucks,” Callier says. “However, when you’re talking about a company looking into getting a new commercial route and it doesn’t have to be a new asset, taking a look at a used truck can save up to $40,000 that can be put back into areas of the business that are generating a higher-yielding hurdle rate.”