Medium-Duty Fleets Bide Their Time

By Jim Galligan

The drifting economy, shrinking budgets and pending emission regulations are the driving forces in upcoming fleet purchase plans.

The recessionary economy is the biggest factor influencing near-term fleet equipment purchase plans, followed by the January 2010 change in diesel emission standards, several fleet managers said.

Whether they were overseeing commercial or public fleets, fleet managers said they would buy fewer trucks in the next 12 months than they typically have in the past.

Commercial fleet managers are waiting for business to improve before committing to more trucks. Municipal fleet managers will be working with smaller budgets in the upcoming fiscal year as falling tax revenues squeeze public services.

The looming change in diesel emission regulations evoked mixed reactions. Despite less capital, some fleet managers said they were going to buy as many trucks as they can this year in order to avoid the higher prices and new technologies that will come with 2010-compliant trucks. Others were more neutral.

Bill Kokemor, fleet director with construction company Henkels & McCoy, said that while the company’s overall health is good, it will buy about 30% fewer units in its upcoming fiscal year, which begins in October. The Blue Bell, Pa.-based company specializes in construction work for utilities and telecommunication customers.

Construction business for electric transmission lines is strong as utilities expand their grid system, Kokemor said, but construction and maintenance work on distribution lines, the local lines that carry electricity to end users, has been soft for several years, reducing the company’s new-truck needs for that division.

“The power companies are cutting their budgets, and [distribution] is an easy part to cut,” Kokemor told Light & Medium Truck. (Henkels & McCoy ranks No. 48 on Light & Medium Truck’s Top 100 Commercial Fleets.)

Ron Serio, deputy director for Phoenix Public Works, said the city will spend about 25% fewer dollars in the next fiscal year for fleet equipment than what it had spent this past year.

“Those numbers were similar to [2008], but last year was reduced [from] what we would normally purchase,” he said.

When other fleets are cutting purchase plans, maintaining your status quo can be considered a positive sign.

Don DiPiro, vehicle processing supervisor with Portland, Ore., said that its equipment buys would be about the same as last year when it turned over about 10% of its fleet of just under 3,000 vehicles. <

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