Faced with increasing pressure to improve vehicle reliability, meet safety and emissions regulatory requirements all while minimising operating costs to remain competitive, today’s transport operators have already turned to the total cost of ownership (TCO) approach. Using TCO to guide decisions on maintenance and operational performance, this often involves monitoring ‘cost per mile’ of the vehicle fleet, on which vehicle availability, maintenance cost and fuel expenditure all have an impact.The question is: are fleet operators missing out on an easy win to improve the performance of their fleet?
When looking to make savings, lubricants are often one of the first areas to be cut. While cheaper oils and greases may achieve immediate cost savings, the detrimental effect on equipment can prove more expensive over time. However the right high quality lubricant, when supplied and managed correctly, can actually help deliver cost savings through reduced maintenance costs, improved fuel economy and increased vehicle availability across a fleet. A recent survey of fleet managers commissioned by Shell Lubricants revealed that 56% do not expect higher quality lubricants to help cut maintenance and 66% do not expect higher quality lubricants to be able to help reduce unplanned downtime.
A change in mindset
When evaluating TCO it’s important to consider not only the end to end impact on maintenance budgets, but also any costs incurred as a result of vehicle downtime, maintenance and fuel expenditure. Taking this holistic view can provide a more accurate evaluation of a vehicle’s lifetime value and cost per mile, giving transport operators an opportunity to better identify where TCO savings can be made.
Effective lubrication is key to protecting heavy duty diesel engines, transmissions, axles and wheel bearings from the wear, deposits and corrosion that lead to frequent oil changes, maintenance and even component failure. Fuel is also a consideration and can account for as much as 39% of fleet operating costs. Therefore a lubricant that can deliver even a small increase in fuel economy has the potential to significantly cut fleet TCO.
By using a high performance lubricant that maximises fleet efficiency and minimises downtime, a vehicle can be on the road for longer, driving a greater profit for the business.
Counting the cost of cheaper lubricants
Many business underestimate the effect lubricants can have on cost per mile. In a price sensitive market where maintenance can be up to 10% of total operating costs, lubricants are often one of the first targets for cost control. Only 52% of fleet managers believe lubricant product performance to be an important purchase consideration, but the reality is that not all lubricants and greases are equal. Products can vary dramatically in quality and performance, and while each original equipment manufacturer (OEM) sets its specific lubrication requirements, not all products that meet these standards deliver the same level of performance.
While buying cheaper oils and greases may reduce costs in the short term, the detrimental effect on vehicle parts and resulting maintenance periods can become more expensive over time. Factor in missed deadlines, lower vehicle reliability and reputational impact, and the true cost of poor lubrication on the bottom line can be much higher. To further exacerbate the problem, once issues arise with vehicle components, the tendency is to look at grander (and more expensive) solutions over making smaller, granular changes that could create greater total cost of ownership savings.
In fact, one in three fleet managers admit that errors in lubrication had cost their business over $100,000, with one in five reporting costs over $250,000. Making the decision to select a high-performance lubricant can help prevent these costs, reducing unplanned downtime and lowering maintenance costs for lower overall cost per mile.
Reducing cost per mile with effective lubrication
Choosing the right lubricant helped a national road haulage business achieve over £40,000 in parts and maintenance savings for their fleet of over 100 Iveco Stralis vehicles.
Aware of the costly knock-on effect of vehicle downtime this road haulage business invested heavily to avoid interruptions to service, building an on-site workshop to ensure upkeep of its fleet and introducing an annual replacement policy which means that the average age of its fleet is just three years old.
However, after experiencing a pattern of premature turbocharger failures that forced the company to replace the turbochargers of its entire fleet every 200,000km as a precautionary measure, the company was facing additional vehicle downtime, lost man hours and mounting parts costs.
With the cause of the turbocharger failure identified by the company’s onsite engineers as a build-up of deposits from the engine oil, the business turned to Certas Energy for a solution. Following an in-depth consultation Certas Energy’s technical experts recommended upgrading the fleet to a high performance lubricant from the Shell Rimula family. With improved resistance to wear, deposits and oxidation, switching to Shell Rimula helped this transport company achieve over £45,000 in fleet maintenance savings through longer component life while providing a future-proofed solution for the business’ Euro V engines.
Optimising lubrication for effective fleets
Making what might seem like small changes to lubricant procurement can have a significant impact on TCO, but one size does not fit all. Fleet managers must evaluate the needs of their business through a unique TCO approach that accounts for a holistic view of maintenance cost and vehicle downtime to realise low-cost, long-term product reliability over the lifetime of a vehicle.
By choosing high quality lubricants that deliver enhanced equipment protection, transport operators can boost productivity and reduce maintenance cost for lower cost per mile across their most important investment – their fleet.
As an authorised distributor of Shell Lubricants in the UK, Certas Energy works closely with the transport sector to provide technical expertise and deliver value by reducing TCO and increasing vehicle availability through tailored lubricant solutions. To find out more, please visit certasenergylubricants.com/sectors/transport
1This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 395 interviews with Fleet sector staff who purchase, influence the purchase or use lubricants/greases as part of their job across 8 countries (Brazil, Canada, China, Germany, India, Russia, UK, US) from November to December 2015