Between stricter emissions standards and a desire to lower total cost of ownership (TCO), fleets are seeking out alt-fuel trucks \u2014 and that means some of those fleets are purchasing pre-owned models, providing others with opportunities to remarket their units.<\/p>\n
While alt-fuel trucks are far from dominating the pre-owned truck market<\/a>, remarketing is a viable option, although one that presents its challenges. Understanding the market can help both sellers and buyers see success.<\/p>\n As more fleets embrace alt-fuel technology and more units are on the road, it\u2019s natural that more opportunities for remarketing them will arise.<\/p>\n Michael Taylor, director of autogas business development at the Propane Education & Research Council (PERC), said a variety of factors are causing an increase in the number of propane autogas vehicles in the United States.<\/p>\n \u201cIn recent years, federal, state, and local standards and regulations forced all vehicle OEMs\u00a0to comply with lower emissions and increased CAFE standards. In some instances, pressure from communities and customers requires many companies to make the switch to an alternative fuel like propane autogas,\u201d he said. \u201cToday\u2019s propane autogas engines are operating at 90% cleaner than the current Environmental Protection Agency (EPA) standards, making them an attractive option for many fleets. With more vehicles on the road, the residual values and remarketing of propane autogas vehicles will improve.\u201d<\/p>\n Mike McMahon, the director of sales, strategic accounts for Ritchie Bros. Auctioneers, has seen alt-fuel trucks \u2014 namely CNG \u2014 come through the company\u2019s auctions. McMahon said the evolution of 9.0L to 12.0L engines resulted in increased performance and heavier hauls that accommodate the needs of trucking fleets and drive purchases.<\/p>\n \u201cBased on the information we have, there are probably about 60,000-70,000 alt-fuel units in operation between the OEM suppliers and out in service,\u201d he said. \u201cCNG trucks and tractors are what we see most at our auctions. There is a lot of talk about OEMs getting into the electric space<\/a> with over-the-road (OTR) tractors, but we haven\u2019t seen any of that equipment come our way just yet.\u201d<\/p>\n George Survant, senior director of fleet relations for the NTEA, said remarketed alt-fuel trucks allow fleets to check several boxes: environmental stewardship, TCO, and an attractive pre-owned purchase price \u2014 but the circumstances have to be right.<\/p>\n \u201cIn select markets and under specific conditions, these products represent an opportunity for a fleet operator to meet compliance obligations and reduced operating expenses without the sometimes-steep premium,\u201d he said. \u201cAlt-fuel vehicles that use cleaner fuels than traditional petroleum products typically have engines that are in excellent condition. As such, these engines can have extended lives, which is an important value in deciding to use second-life alt-fuel vehicles.\u201d<\/p>\n McMahon said he\u2019s seen buyers of both new and pre-owned alt-fuel trucks see success with their purchases.<\/p>\n \u201cThere are certain customers that run this cleaner-burning equipment and have had much success with it,\u201d he said. \u201cThere are fleets that run alt-fuel as their main fuel technology, and they\u2019re happy with both their new and pre-owned vehicles.\u201d<\/p>\n In terms of the process, remarketing alt-fuel trucks isn\u2019t a whole lot different than remarketing conventional vehicles. The key difference \u2014 and challenge \u2014 for sellers lies in finding buyers equipped to purchase such equipment.<\/p>\n For instance, to operate alt-fuel trucks, buyers must have fueling infrastructure on-site or have it readily accessible on their routes.<\/p>\n \u201cSuccessfully remarketing dedicated alt-fuel vehicles may mean concentrating sales activities in locations with refueling and support infrastructure,\u201d said Survant of the NTEA. \u201cIf your use of alt-fuel vehicles is driven by internal infrastructure, you may need to move these used products to markets that have more access to public refueling locations to get the best prices for your used equipment.\u201d<\/p>\n In addition to infrastructure considerations, because the equipment will likely be past warranty, buyers will also need to know how to maintain it.<\/p>\n \u201cIf you\u2019re a fleet manager, it\u2019s a little tougher to remarket CNG trucks because of the market size and finding customers running alt-fuel vehicles. When you\u2019re trying to find the right buyers, it\u2019s about the marketplace and finding someone who understands the technology\u00a0and\u00a0can work on it, because it will be past its warranty. They\u2019re going to need to be able to maintain that equipment,\u201d said McMahon of Ritchie Bros.<\/p>\n Likewise, with a smaller market, buyers may not be in the seller\u2019s area, so they may need to reach beyond their immediate geography to make a sale.<\/p>\n \u201cIf you\u2019re a local fleet manager or local OEM dealer, you might have a hard time selling your trucks in your local market because of a limited buyer base,\u201d McMahon explained. \u201cIt\u2019s the same as any other specialized outfit. You want to reach the largest buying audience for that truck. If you have equipment coming out of service, to maximize resale value, look at various remarketing platforms to see what they can do to maximize their return on that asset.\u201d<\/p>\n Fortunately, remarketers of alt-fuel trucks can overcome this hurdle. Using online auction platforms with access to an extensive geography of buyers can help sellers reach their audience and maximize equipment resale value.<\/p>\n \u201cAlt-fuel trucks are going to sell the same way as traditionally fueled trucks, but you want as big of a buying audience as possible,\u201d McMahon said. \u201cRitchie Bros. has a buyer base and various platforms to remarket the equipment. We\u2019re able to remarket the equipment, maximize the seller\u2019s returns and if needed, the time to sell as well.\u201d<\/p>\n Even though buyers may be a little more challenging to find, McMahon said if you can find them, they\u2019ll consider pre-owned.<\/p>\n \u201cWe have a customer base that will consider, depending on the specs, buying used if the opportunity presents itself,\u201d he said. \u201cWe have a fairly dedicated group of sellers who remarket this equipment. We have five-plus years of buyers and bidder data. We also have a pretty good buyer base that looks to purchase this equipment.\u201d<\/p>\n Remarketing alt-fuel trucks is the same as remarketing traditionally fueled trucks in that\u2026<\/strong><\/p>\n Remarketing alt-fuel trucks is different from remarketing traditionally fueled trucks in that\u2026<\/strong><\/p>\n Another essential piece of the sale is the price, which NTEA\u2019s Survant said can be tricky to get right.<\/p>\n \u201cOne of the challenges for fleet managers researching remarket sale prices for their life cycle cost calculations is that the markets for these products have regional and geographic price histories requiring more effort to uncover,\u201d he said.<\/p>\n To establish an attractive right price, McMahon of Ritchie Bros. said consulting online resources can help.<\/p>\n \u201cThere is much information online to sign up and see what sales results based on age, miles, and technology of the equipment,\u201d he said. \u201cFleet managers can get info about what they can expect to get out of the vehicle using one of those platforms.\u201d<\/p>\n Taylor of PERC noted that buyers who understand the role alt-fuel plays in TCO could be more comfortable with the purchase price of pre-owned alt-fuel vehicles.<\/p>\n \u201cPropane autogas is a clean-burning fuel which requires less maintenance than traditional fuels and, in most cases, can extend the lifecycle when the vehicles are properly maintained,\u201d he said. \u201cMost fleet managers base their purchasing decisions on these facts knowing that residual value is secondary to annual lifecycle savings which, when compounded year after year, far exceed any considerations or concerns when it is time to replace the asset.\u201d<\/p>\n While the clean-burning properties of alt-fuels like propane may promote sales, aging batteries in electric vehicles may pose the opposite problem.<\/p>\n \u201cSuccessful remarketing is driven by condition, mileage, and perception of a vehicle\u2019s existing remaining service life. This is even more important for alt-fuel vehicles,\u201d Survant said. \u201cIn the case of electric vehicles, which typically have lower mileage accumulations and can appear to be in good condition, this traditional price uplift effect is offset by concerns over remaining battery life and recognized cost of battery replacement. This directly impacts perception of future usefulness, which can soften resale values.\u201d<\/p>\n While price is an important consideration to buyers, Survant explained that educating them both on the individual vehicle and the benefits of alt-fuel trucks can promote sales.<\/p>\n \u201cBeing willing to provide your reliability and service history with the remarketed vehicle can be an important step in helping buyers visualize remaining service life of the product,\u201d said. \u201cAlso, it is hard to overemphasize how important it can be to help your potential remarketing buyer understand the virtues of these products. Any collateral information fleet operators can provide at the time of sale can be a big plus in shaping buyers\u2019 behavior: aftermarket support locations, public refuel locations, and lifetime fuel use\/cost records.\u201d<\/p>\n Overall, Taylor said sellers should be realistic in their expectations.<\/p>\n \u201cBase your desired outcome on facts, which should include vehicle age, engine hours, duty cycle, preventive maintenance practices, repairs, vehicle specifications and the available market for reselling,\u201d he said.<\/p>\n Just as sellers encounter challenges finding buyers, those buyers may face challenges finding the equipment they want to buy. PERC\u2019s Taylor said that, although used propane autogas trucks are a viable choice for fleets, fleet managers who buy new are hanging on to their units as long as possible \u2013 and that makes pre-owned models challenging to locate.<\/p>\n \u201cMost fleet managers are retaining their propane autogas vehicles in their fleets as long as possible to enjoy the full benefits and their annual savings,\u201d he said. \u201cPropane autogas vehicles are typically purchased by fleet managers who intend to operate their vehicles for their full lifecycle, which makes it very difficult to purchase used propane vehicles at this time.\u201d<\/p>\n Finding the equipment is just one challenge for buyers. They must also consider what happens once they get it back to their operation. Do they have the proper fueling infrastructure? Maintenance capabilities?<\/p>\n \u201cIf someone doesn\u2019t currently operate an alt-fuel fleet, trying a remarketed alt-fuel vehicle could be challenging,\u201d said McMahon of Ritchie Bros. \u201cThey need to look at and understand the cost of ownership and what capabilities they might need to add to their operation if they add alt-fuel to their fleet.\u201d<\/p>\n Taylor said fleet managers who purchase alt-fuel trucks should take into consideration all the costs \u2014 and savings \u2014 throughout the vehicle\u2019s lifecycle. These can be very different between alt-fuel and conventionally fueled units.<\/p>\n \u201cWith conventional fuels, fleet managers will most likely enjoy a lower purchase price but will be required to invest significant capital into maintenance which, in turn, increases TCO and increases the fleet manager\u2019s interests in residual value,\u201d he explained. \u201cWith propane autogas work trucks, fleets managers make a small investment in the purchase of the vehicles and enjoy annual cost savings during the life of the vehicle, thereby reducing their interests in residual value and concerns about remarketing.\u201d<\/p>\n For McMahon, application, performance, and a price point that allows for a lower total cost of ownership are the factors that determine whether the vehicle is the right fit. However, he also iterated that, regardless of price, buyers are likely to see environmental benefits from their purchase.<\/p>\n \u201cIt\u2019s greener for them and for the customer they haul for,\u201d he said.<\/p>\n To successfully operate a fleet of alternative-fuel trucks such as a Hino 195h (pictured), you must have the available infrastructure for fueling or recharging. Photo: Hino<\/p>\n<\/figcaption><\/figure>\n Although McMahon said Ritchie Bros. sees predominantly CNG trucks come through their auctions, he doesn\u2019t see that industry getting bigger. What he does anticipate is a rise in electric trucks.<\/p>\n \u201cOne thing we\u2019re starting to see on the new truck side is the OEMs coming out with electronic OTR tractors and battery-based power. That seems to be a trend now,\u201d he said. \u201cAs Class 8 OTR and medium-duty technology grows, I think costs will align, and I see us being able to remarket that type of equipment.\u201d<\/p>\n Survant of the NTEA said he sees a correlation between increasing public access to refueling infrastructure having a significant impact on remarket price.<\/p>\n \u201cThis is demonstrated by the stronger prices dedicated alt-fuel products bring near larger cities with existing public access refueling options and in locations with more stringent emissions regulations,\u201d he said. \u201cHybrids and bi-fuel products typically have more stable prices and less regional variations. As greater customer acceptance\/demand for these products escalates, along with greater OEM production levels, remarket demand should keep prices rising.\u201d<\/p>\n by Shelley Ernst<\/a><\/p>\n Source: https:\/\/www.automotive-fleet.com<\/a><\/p>\n Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n Fleet management activities are shown in the following graph 1:<\/p>\n Graph 1: fleet management activities<\/p>\n The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n With the information obtained, we\u2019ll elaborate a report that holds the overall status of the fleet management as well as the suggestions, recommendations and the measures to take in order to cut costs and optimize the fleet management activities.<\/p>\n CLICK ON THE FOLLOWING LINK TO DOWNLOAD THE PROPOSED FLEET MANAGEMENT AUDIT:<\/p>\n Contact:<\/p>\n Jos\u00e9 Miguel Fern\u00e1ndez G\u00f3mez<\/p>\n 34 678254874<\/p>\n info@advancedfleetmanagementconsulting.com<\/p>\nA Developing Market<\/h2>\n
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Seller Challenge: Finding Buyers<\/h2>\n
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Seller Challenge:\u00a0Price<\/h2>\n
Buyer Challenges<\/h2>\n
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The Future of Alt-Fuel\u00a0Remarketing<\/h2>\n
FLEET MANAGEMENT AUDIT<\/h3>\n
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Fleet Management Audit AFMC<\/span><\/a><\/h2>\n
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I\u00b4m\u00a0a Fleet Management expert, and the manager of\u00a0