Decisions, Decisions!

Traditionally, those early passenger service vehicles had a first life of around five years, but operators now found themselves transitioning to chassis that more than doubled that. The obvious parallel with the road transport business is, of course, the pricing impact. Those new coaches, as with today’s new electric and hydrogen powered trucks, were eye-wateringly costly.

Interestingly, the coach sector back then had been brought up largely on an ‘ownership’ platform. Vehicles repaid their capital cost during the first five years of any finance deals and then made a ‘profit’ from the equity when sold on. However, the new high chassis prices suddenly changed the ground rules, moving direct purchase out of reach.  Almost overnight, the high-performance, longer life chassis and drivelines began to shift operator focus from ownership to ‘usership’ through hire and lease purchase packages.

Now, truck operators face many of the same pricing challenges: current alternative fuel vehicles can cost three times as much as their diesel fore-runners, with the added costs of charging facilities for the far more prevalent electric models. In fairness, while the new generation of Zero Emissions trucks is more costly, that is balanced up to a point by the potential of their longer operational lives, with parts and service costs reduced alongside running costs. But, in a sector where vehicle image is an important factor, will operators be willing to run trucks for 10-12 years purely to amortise acquisition costs? Given patterns over the past few years, the most likely answer is, ‘No’!

Continue reading for more thoughts about decisions, decisions from Matt Watson, Head of Fleet at Dawsongroup truck and trailer.