Apparatus

Fleet Replacement Challenges Equal Opportunities

Issue 6 and Volume 18.

Brian Brown

A sound vehicle and maintenance replacement program is important to all government agencies of all sizes. Be it a volunteer, a combination, or a career department, reliable vehicles and equipment in appropriate working order are essential to providing all public services to communities in a professional and timely manner. Fire, EMS, wildland, aircraft rescue and firefighting (ARFF), and hazmat apparatus and equipment that break down frequently because of age or excessive use will lead to an interruption in service from the agency to the community.

Although a sound preventive maintenance program is a key component to managing a fleet, my last article covered the challenges we all deal with on a daily basis of keeping our fleet operations in the black or, as most of us say, “keeping our heads above water.” Some of the key elements included shrinking budgets, economic downturns, and performing regularly scheduled preventive maintenance while doing more with less. In addition, I briefly covered the topic of managing aging fleets.

Now it’s time to dig deeper and to be prepared to answer some tough questions when evaluating your fleet’s overall replacement performance. Remember to know your fleet and run it like a business. The more you put into your fleet, the more your business responds to cost savings information, reduced downtime, operating cost, and overtime.

The goal of this article is not only to identify things that your department already does well, is already in the process of improving, or already recognizes needs to be improved, but to review the current and past practices of your department and make suitable recommendations for improvement going forward.

Validation

If your agency already has a fleet replacement plan in place or is willing to adopt/create one, it needs to be validated. Without a viable and comprehensive replacement program, managers will be unable to recognize apparatus and equipment replacement in a timely manner. The lack of basic replacement guidelines will cause them to overlook the optimum time at which apparatus needs to be replaced. What I have discovered is that the majority of the time this is an area that has been neglected by many departments and cities for many years. The support from upper management is vital to implementing a fleet replacement plan. Certainly, good working equipment contributes to positive employee morale. All of these factors combine to make a first class fleet operation and replacement program that fits well in the manager’s tool kit.

Granted, the challenges we all face include shrinking revenues; budget cuts in the fleet and support areas; increased demand for service; increased state mandates; National Fire Protection Association (NFPA) 1911, Standard for the Inspection, Maintenance, Testing, and Retirement of In-Service Automotive Fire Apparatus, (2007 Ed.), mandating more annual testing; and an aging fleet requiring possible readjustments. Readjustments to the fleet throws in a nice twist as the units that were initially planned for replacement are now kept and reallocated in another division/bureau that “feels” it truly needs it. These units now experience increased maintenance costs, reduced resale value, and increased downtime.

Starting Point

To begin, at what age do you like to replace vehicles in your fleet? The fact that a vehicle has reached its replacement age or threshold doesn’t mean it automatically gets replaced. Some wear out quicker than others, which may be a sign of the assignment, the intensity of use, and how the end users take care of the vehicle. However, some vehicles may need to be replaced sooner because of the extreme wear and tear-hence, the reason a comprehensive replacement program is instrumental in the budget planning process to determine specifically which units should be replaced. Such a process sets a guideline as to which units deserve to be replaced and the funding that must be available. Additional criteria should include two basic categories of fleet expenses: fixed and variable costs.

Fixed expenses include depreciation, insurance, license plate renewal, annual testing, and so on. Variable expenses include fuel, maintenance and repair (M&R), accidents, tires, oils, modifications, and so on.

Methods

Developing vehicle replacement criteria establishes the foundation for a planned approach to fleet replacement and can use one of two primary methods for establishing vehicle replacement cycles.

The empirical method involves using a formal life-cycle cost analysis technique (such as equivalent annual costs) to calculate the least costly life cycle per class of vehicle. The best practice method involves surveying peer organizations with similar fleet and operating conditions.

Regardless of which method your department uses, life cycles must be developed with the goal of minimizing overall fleet cost, maximizing vehicle availability, and providing end users with safe and reliable vehicles to perform their jobs.

Using either method, many agencies have developed a weighted point system that mixes the factors listed above in a formal reporting and review process. The advantage to this is that it removes most of the politics and emotions out of the replacement process while providing the facts that all the stakeholders (end users, management, fleet staff, finance staff, and so on) understand to buy into the program. A variety of software systems and various point system programs are used by many fleet agencies across the country. Some are based on an overall replacement program using an average, while others customize the program to fit different classes or types of equipment. The point system is the most widespread methodology.

The next step to be considered is developing a fleet replacement policy using the benchmarks listed in the “Establishing Benchmarks” sidebar. These can be used to create and implement a policy to define practical conditions and guidelines for the replacement of fleet units. This would be primarily used on fire and EMS vehicles to project the life cycles of those units. The replacement guidelines outlined in this area generally reflect operational, technological, downtime, and financial criteria.

Have a Credible Plan

As previously mentioned, some systems are based on vehicle types or categories considering the application, preventive maintenance program in place, and the end user application. In many instances, downtime can be used as a better indicator than the number of trips to the shop. Other agencies may use the overall M&R cost average for an entire class or type of vehicle rather than the percentage of the original replacement cost as a key factor.

Regardless of the specific model your agency chooses to practice or create, using a point system is an excellent way to bring credibility and ownership to the process that can be bursting with politics and emotions. Recognize that the most economical method provides the lowest net cost, since vehicle replacement funds are usually in short supply. Having a well-thought-out and credible plan will benefit not only the fleet operation but also the direction of those future funds.

BRIAN BROWN is bureau chief of fleet services for the South Metro (CO) Fire Rescue Authority. He has more than 30 years of experience in fleet services, with more than 25 years in fire apparatus fleet services, and is president of the Colorado Emergency Vehicle Technicians Association. His certifications include master automobile technician, master medium/heavy-duty truck technician, emergency vehicle fire apparatus technician level I and level II, emergency vehicle technician management level I and level II, firefighter II, fire instructor I, hazardous materials responder technician, and EMT-B.


Sample Replacement Point System

The following is an example of a replacement point system used by Charleston County, South Carolina, for an old pumper.

Fire Engine Replacement Guidelines (Source: APWA Vehicle Replacement Guide)

Factor

Points

Age

One point for every year of chronological age, based on in-service date.

Miles/Hours

One point for each 10,000 miles or 1,000 engine hours of use.

Type of Service

One, three, or five points are assigned based on the type of service the unit is exposed to. For instance, fire pumpers would be given a five because it is classified as severe duty service. In contrast, an administrative sedan would be given a one.

Reliability

Points are assigned as one, three, or five depending on the frequency that a vehicle is in the shop for repair. A five would be assigned to a vehicle in the shop two or more times per month on average, while a one would be assigned to a vehicle in the shop an average of once every three months or less.

M&R Costs

One to five points are assigned based on total life M&R costs (not including repair of accident damage). A five is assigned to a vehicle with life M&R costs equal to or greater than the vehicle’s original purchase price, while a one is given to a vehicle with life M&R costs equal to 20 percent or less than its original purchase cost.

Condition

This category takes into consideration body condition, rust, interior condition, accident history, anticipated repairs, and so on. A scale of one to five points is used with five being poor condition.

Point Ranges

Fewer than 18 Points

Condition I

Excellent

18 to 22 points

Condition II

Good

23 to 27 points

Condition III

Qualifies for replacement

28 points and above

Condition IV

Needs immediate consideration

Applying the chart above, use a 15-year-old fire pumper planned for replacement in two to three years. The unit has 110,000 miles and more than 10,000 engine hours; is in poor condition; and includes massive amounts of downtime, poor reliability, and repair costs that exceed more than 80 percent of its original purchase price.

The points would be assigned as follows:

Age = 5 points
Miles or engine hours = 10 points
Type of service is severe = 5 points
Reliability = 5 points
M&R costs = 3 points (quickly approaching 5)
Condition = 5 points
Total = 33 points and needs immediate consideration

The point system is the most widespread methodology.


Establishing Benchmarks

Use the benchmarks listed below to help develop a fleet replacement policy.

Purpose: The Replacement Class System and Replacement Guidelines are used to define practical criteria and guidelines for replacing fleet units and are applied in fleet unit life cycles projection. The replacement guidelines outlined in this policy generally reflect operational, technological, downtime, and financial criteria.

Life Cycles: Fleet unit life cycles are based on the best practice method recommended by industry standards. This method involves an internal customer survey and using replacement guidelines set forth in the vehicle replacement guide in most fleet software programs. The results are compiled and adjustments are made to take into account factors unique to a fleet such as type of use. Once the vehicle has met the replacement criteria, it goes through a review process by the fleet manager/director and the user department to determine if the vehicle should be replaced, retained for limited use, or have its life cycle extended. The overall goal is to replace vehicles at the lowest life cycle cost before the operating cost exceeds vehicle capital.

Replacement Class System: The Replacement Classes and Replacement Guidelines are used to categorize the various types of fleet units and their target replacement miles, hours, and age in addition to each unit’s operational feasibility while analyzing the most current technology.

Consideration for Replacement
• Units that have met replacement criteria.
• Units with replacement deferred from prior years.
• Units that have reached maximum points or fleet software replacement program criteria.
• Units that have excessive operating cost.

Staff Vehicles Seven to 10 years or 85,000 to 100,000 miles*

Engines Aerials 10 years front-line and three to five years reserve service*

Medic Units Seven years front-line and three years reserve service*

Type III and Type VI Wildland Units 20 to 25 years or as needed*

Tenders, HazMat, other Specialty Units As needed*

*As needed is based on the replacement criteria outlined above.

Excellent Condition
• Fewer than five years old.
• Fewer than 800 engine hours.
• Fewer than 25,000 miles if not used in stationary applications.
• No known mechanical defects.
• Very short downtime and very little operating expense.
• Excellent parts availability.
• Very good resale value.
• Meets all present NFPA 1911 safety standards.

Very Good Condition
• More than five but fewer than 10 years old.
• More than 800 but fewer than 1,600 engine hours.
• More than 25,000 but fewer than 50,000 miles if not used in stationary applications.
• No known mechanical or suspension defects present.
• Short downtime and above average operating costs.
• Good parts availability.
• Good resale value.
• Meets NFPA 1911 safety standards.

Good Condition
• More than 10 years but less than 15 years old.
• Some rust or damage to the body or cab.
• More than 1,600 but fewer than 2,400 engine hours.
• Some existing mechanical or suspension repairs necessary.
• Downtime and operational costs are beginning to increase but not terribly above the average.
• Parts are still available but getting difficult to find.
• Resale value decreasing.
• Meets all NFPA 1911 safety standards.

Fair Condition
• More than 15 but fewer than 20 years old.
• Rust, corrosion, or body damage apparent on body or cab.
• More than 2,400 engine hours.
• More than 75,000 but fewer than 100,000 miles if not used in stationary applications.
• Existing mechanical or suspension repairs necessary.
• Downtime is increasing, and operational costs are above the historical average.
• Parts are becoming harder to find and/or obsolete.
• Very little resale value.
• Does not meet all NFPA 1911 safety standards.

Poor Condition
• More than 20 years old.
• Rust, corrosion, or damage to the body of cab impacting apparatus use.
• More than 2,400 engine hours or 100,000 miles.
• Existing mechanical or suspension problems affecting the apparatus operation.
• Downtime is exceeding in-service availability.
• Operational costs are exceeding the resale value of the apparatus.
• Parts are obsolete.
• Does not meet all NFPA 1911 safety standards.