Cutting Fleet Costs Through Unbundled Fleet Services

Fleet Advantage is working with FleetNet America to provide unbundled fleet maintenance services, which gives fleets greater flexibility. The collaboration brings to the table FleetNet America’s network of 65,000 vetted service providers.

“We believe there's true value in separating the finance lease and the maintenance cost from the cost of the total monthly bill. When we were looking at what made the best sense for us and our fleet clients, it made sense to partner with a maintenance provider that provides a pay-as-you-go model,” says Brian Antonellis, senior vice president of fleet operations at Fleet Advantage.

He explains many of today’s fleets want the flexibility of an unbundled lease structure, but also need the option of a reliable maintenance provider with access to a nationwide network of repair technicians and locations.

That is important because truck operating costs are rising, and maintenance and repair (M&R) represent a large portion of the increase.

According to the American Transportation Research Institute (ATRI), the cost of operating a truck in 2022 was $2.251 per mile, surpassing $2 per mile for the first time in the history of ATRI’s Ops Costs report. M&R costs rose in 2022 by 12%, according to ATRI.

FleetNet America by Cox Automotive is a key player in the managed maintenance industry and provides 24/7/365 customer service. Additionally, Fleet Services by Cox Automotive, a nationwide leader in on-site maintenance and repair, will support the new program as one of the key service providers. 

Example of How Fleets Benefit from Unbundled Approach

If a fleet in Utah is running 100,000 miles a year, the vehicle’s expected life cycle might be five years, Antonellis provides as an example. If the loads change, or the fleet adds additional customers, that annual mileage may grow to 125,000 or 150,000 miles per year.

That added mileage could reduce the lifecycle to four or four-and-a-half years.

If a fleet is locked into a guaranteed maintenance contract, that makes it very difficult to manage the changed life cycle, Antonellis points out.

“Therefore, we were looking for a partner that helps us give fleets the flexibility to pay as they go, and a partner who is big enough to have national coverage and could cover not only the maintenance portion but also the road service portion,” he explains. “At the end of the day, if your truck breaks down, someone must be there to support them.” 

This new program offered by Fleet Advantage means fleets have reliable access when and if they need it, and only pay for what they use instead of being locked into and paying for full-service maintenance packages even if they do not use it. 

Antonellis says with $3 billion assets under management, Fleet Advantage’s working relationships, national account support from several OEMs, and reputation in the marketplace enable it to continue to serve America’s corporate fleets, including FleetNet America’s clients.

Benefits of an Unbundled Lease

The principal difference between an FSL and an Unbundled Lease is that FSL is not transparent to the customer. In an FSL agreement, fleets essentially hand over all decision making on fuel, and M&R costs to their lease provider and only focus on a bundled monthly payment.

Antonellis says this type of contract can be detrimental to a fleet’s bottom line.

In an unbundled lease agreement, fleets have greater flexibility on these individual costs and the freedom to upgrade and scale through flexible leasing, guaranteeing the lowest possible financial costs involved with truck fleet asset management and acquisition.

Fleet Advantage continued to prove the effectiveness of this flexible model by successfully unbundling nearly 700 units in 2023 alone.

Managing Data, Making Decisions & Saving Money

Fleet Advantage says organizations face many challenges, including data management, navigating the largest CARB prebuy ever for truck procurement, and combating high FSL rates with questions on how to unbundle to maximize their overall transparency, flexibility, and bottom line.

Fleet Advantage specialists talk with fleet clients about various procurement and operational strategies and how to avoid a reactionary approach through a holistic multi-year philosophy that leverages data and analytics to build a fleet modernization plan encompassing all of the economics. 

Flexibility and competitive finance options are what Antonellis calls the most effective ways to reduce truck and finance costs. Fleet Advantage recently unveiled a new Unbundled Full-Service Lease Comparative Index that provides calculations to help fleets determine whether unbundling suits their operation.

Looking at the example of a daycab tractor operating 30,000 miles per year, an unbundled finance lease could produce maintenance savings of $50,646 compared to a full-service lease. The CPI increases are based on actual history (4.0% Cap). Antonellis said amounts will differ by cab type, application, utilization, and OEM, but savings versus a traditional FSL will likely be achieved.

“This partnership allows Fleet Advantage to offer maintenance solutions and alternatives and incorporate the expertise and national network that Cox has assembled. Having an established and proven maintenance and service program option enhances our existing suite of award-winning offerings, providing fleets with a truly holistic best-in-class asset management solution that helps position them as industry leaders,” said Brian Holland, Fleet Advantage president and CEO.