Vehicle downtime due to accidents and unscheduled maintenance increases operating costs for companies by taking trucks off the road and slowing down deliveries. Many fleet owners overlook total ownership costs beyond the initial sticker price, such as rising vehicle and fuel prices, maintenance expenses, and driver recruitment costs. A thorough analysis of all acquisition, operational, and disposal expenses is needed to understand total cost of ownership and identify potential cost savings opportunities. Ryder's tool has helped some customers find 15% reductions in fleet ownership costs.

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 vehicle’s 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. Ryder’s
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. That’s 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 can’t 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 fleet’s 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
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