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Brochure_TCO
- 1. Consider the cost of vehicle downtime, when accidents and unscheduled maintenance take trucks off the road and slow down customer deliveries. Many companies also overlook other significant costs: rising truck prices, volatile fuel prices and the expense to recruit drivers. Total Cost of Ownership Costs and Questions To Consider The road to understanding your Total Cost of Ownership (TCO) begins with a thorough analysis of all the costs and benefits associated with fleet ownership. Knowing the purchase price of a tractor or trailer is a great start, but the true cost of acquiring an asset goes far beyond the sticker price: you need to assess the investment, the cost of capital and depreciation. In addition, a survey by Ernst & Young found that many fleet owners were surprised at the amount of related salary and labor expenses for employees who indirectly support the fleet, such as accountants handling finance, tax and regulatory reporting. During the vehicles useful lifetime, numerous factors weigh in to bottom-line calculations, like the maintenance costs, labor hours, labor rate, tires, parts and supplies. You also need to include the costs for roadside service, substitute vehicles and fueling. Fleet ownership costs can get out of control. Moreover, many fleet operators do not have a firm handle of their total costs. To make smart financial decisions, you need to know all the cost elements involved. Ryders Total Cost of Ownership Tool has helped identify up to 15% cost savings for customers. Find out how much we can find for you. FLEET MANAGEMENT | SUPPLY CHAIN SOLUTIONS Does your current fleet management system minimize vehicle downtime and does it support superior customer service? Are you up to date on new engine and transportation technologies? Do you manage maintenance costs as a predictable monthly expense? If you paid cash for the asset, did you calculate the opportunity cost? What were the terms and interest rate on the loan for the new vehicle? Clearer Decisions. Thats Ryder.
- 2. Three steps to analyze Total Cost of Ownership 1 Capital costs: Different companies use different models to finance fleet acquisitions. While some pay cash outright, others finance nearly the entire amount with a balloon payment at the end, or factor the cost of capital into the total cost of owning a fleet. If cash is paid, you need to consider the opportunity cost is there a better investment to make with that money? Additionally, purchasing power should be factored in. Research indicates that bigger fleets find it easier to leverage their buying power as a procurement advantage. 2 Operations: Maintenance costs include labor, tires, parts and supplies, as well as the costs associated with accidents, repair and temporary or replacement vehicles. Maintenance costs rise with the age of the fleet and the complexity of the technology. Then there are those departments and people working behind the scenes to run a fleet: information technology, accounting, human resources and legal. You cant overlook the costs to pay the people and run the systems that help run the business. 3 Asset depreciation and disposal: The final piece of the TCO puzzle is resale value. Be sure to factor the return on equity into your cost calculations. Similarly, decide if you will accrue disposal costs, or need to factor in taxes on gains if you sell parts of the fleet. Weigh the options As part of the cost-benefit analysis, weigh the benefits of leasing, such as convenient access to professionally trained experts who can: Handle everything from vehicle inspections and preventive maintenance to 24/7 emergency roadside assistance Manage the fleets compliance and regulatory requirements, vehicle licensing and tax reporting Help you adjust to periods of peak demand Offer a predictable monthly expense for maintenance With so much riding on your decisions, make sure your TCO numbers really add up call us today at 855-657-0738 for a free TCO assessment. Discover how outsourcing with us can improve your fleet management and supply chain performance at ryder.com. 855-657-0738 www.ryder.com Ryder and the Ryder logo are registered trademarks of Ryder System, Inc. 息 2014 Ryder System, Inc. Ever better is a trademark of Ryder System, Inc. PT000178 120814