Embracing Change San Francisco CA

In 2006, the U.S. trucking industry was responsible for the transportation of 70 percent of all U.S. freight volume. Even with the threat of an economic downturn in the U.S., freight weight is forecast to increase in the range of 4-6 percent annually over the next three to five years. To keep pace with weight volume demands, the vehicle population has both expanded and diversified. In 2005, there were over 9.4 million Class-3 through 8 vehicles, up 16 percent from 2001.

One of the greatest challenges facing the transportation industry is the availability of qualified technicians to service and repair the fleet. Although research indicates that the total number of individuals with technician certifications is increasing, the number actually working in a hands-on repair environment continues to decline. The lack of financial incentives, lack of commitment to technician resources and a dirty work environment challenges the industry's ability to keep the talent.

Between 2007 and 2014, eight new regulations are expected to come into effect that will impact commercial vehicle safety systems, emission systems and vehicle idling. The vehicle manufacturers and aftermarket component manufacturers are already responding to these impending regulations with vehicle designs and technologies that address these issues. The top 10 technologies challenging industry technicians are:

1. Auxiliary Power Units
2. Automated and Automatic Transmissions
3. Selective Catalytic Reduction
4. Collision Warning Systems
5. Vehicle Telematics
6. Air-Ride Suspension
7. Anti-Lock Braking Systems
8. Electronic Stability Control
9. Tire Pressure Monitoring Systems and Nitrogen Filling
10. Heating, Ventilation, Air Conditioning, and Cooling

Frost & Sullivan has already seen how the development in technology has changed the fleet service market. Historically, all but the most complex of repairs were performed by the vehicle owner. In 2007, Frost & Sullivan's research indicates that as much as 25 percent of vehicle repairs and maintenance service are being performed by organizations other than the owner. Frost & Sullivan estimates that the percentage will climb to 30 percent within seven years. Who's gaining in the share for service revenues? The expansion of services and locations by companies such as TravelCenters of America, and Flying J are being well-received. In 2007, this channel captured five percent of maintenance service revenues. At the other end of the spectrum is the dealer channel. Dealer service organizations are reaping the benefits from vehicle pre-buying. Fearing significant price increases on 2007 EPA-compliant vehicles, fleets went into a vehicle buying frenzy. With so many new, in-warranty vehicles in service, the dealer service channel captured 25 percent of service revenues. Dealers are taking full advantage of fleets' renewed interest in the dealer channel to build service relationships and market their national service organization. The dealer service channel is close to maxing out with independent repair facilities poised to pick up the overflow.

Typically fleets with greater than 40 vehicles had on-site repair facilities. Each new vehicle technology requires new equipment, diagnostics and information access, however, and the costs associated with operating repair facilities continue to rise and the economic feasibility of operating on-site facilities is diminishing.

Vehicle brand loyalty has become a victim of cost competition and application-specific vehicles. In 2008, it is not uncommon for a company to have a variety of vehicle brands, engine brands, and transmission brands within its fleet. Fleet diversification exacerbates the technician skill issue.

So, with increasing demands for technician services, no relief on the horizon from younger technicians, working smarter is the only answer. Ask yourself:

• Does my equipment support my repair shop's business model?
• Does my staff have access to the information they need to complete the job?
• Where am I losing productivity?
• In areas where my talent pool is thin, what technology can I employ to maximize the resources I have?
• Am I providing an environment that fosters talent retention?
• What process changes can I employ that maximize the in-bay experience?