4 Key Operating Cost Trends to Watch Closely in 2020
For most organizations, fleet represents a significant investment, and is typically among a company’s largest budget line items, making it the subject of virtually endless scrutiny. Further complicating matters is the wide-range of external factors that can influence your fleet’s operating costs – macroeconomic trends, evolving technologies, shifts in consumer buying habits, etc. Since a growing number of organizations now manage their fleet just as they would any other strategic business asset, it is apparent that even the slightest increase in operating costs can quickly create a ripple effect that is felt by your entire business.
Recently, Automotive Fleet compiled an in-depth look at the various factors influencing operating costs and ARI’s Manager of Truck & Equipment Maintenance Chris Foster shared his perspective on four key areas that are pushing expenses higher – tire prices, warranty recovery trends, labor rates, and shifts in maintenance practices.
In the series of articles, Chris pointed to the uncertainty around trade tariffs as one factor that is top-of-mind for many in the industry and an area that we continue to monitor closely.
“Looking ahead to 2020, one particular factor we’re keeping a close eye on is tariffs on glass. Many in the industry expected an immediate price spike due to trade tariffs on glass but the vendors in this segment of the industry worked incredibly hard to minimize the cost impact. Our strong, long-standing partnerships with leading glass providers helped us work through this challenge together in 2019 but at some point, as material costs continue to rise, consumers will likely begin to see a more noticeable increase,” said Chris.
He also echoed this sentiment is regard to tire prices. “Overall, tire prices increased slightly in 2019 – likely influenced somewhat by trade tariffs – but the increase was relatively minimal, ranging from approximately two to four percent on average. That being said, it is possible that tariffs will have a greater influence on tire prices as we head into 2020.”
To read the entire series of articles exploring operating cost trends, please visit Automotive Fleet. And to learn more about strategies to help control costs throughout your fleet’s lifecycle, be sure to visit FleetisanInvestment.com.