Using Fleet Data to Reduce Risk and Improve Profitability
The episode explores how fleets can overcome procurement paralysis by understanding their true operating costs, anticipating regulatory and maintenance challenges, and choosing the right lifecycle and financial strategy.
Episode 368: Fleet Advantage’s Brian Antonellis joins our host Jamie Irvine to break down the “procurement paralysis” many fleets are experiencing due to uncertainty, rising costs, and rapid changes in equipment strategy.
Antonellis explains how years of supply chain disruption, upcoming EPA 2027 emissions regulations, and volatile fuel prices have created hesitation around replacing aging equipment—even as older trucks become significantly more expensive to operate. He highlights the critical importance of understanding a fleet’s true operating economics, especially fuel efficiency degradation and escalating repair costs, and discusses how predictive maintenance, safety technology advancements, and choosing the right financial structure (ownership vs. leasing) can help fleets reduce risk and make confident decisions.
The conversation emphasizes that fleets can overcome paralysis by focusing on data, lifecycle costs, and strategic planning rather than small, low‑impact cost‑cutting measures.
Links
Sponsors of this Episode
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Transcript of Episode
Jamie Irvine
Welcome to The Heavy Duty Parts Report. My name is Jamie Irvine. In this episode, we’re talking about a challenge many fleets are facing right now. And I’m going to read it to you so that I get this correct. Procurement paralysis driven by uncertainty, rising costs, and rapid change in equipment strategy. That’s what we’re going to talk about today. To help me with that, I have Brian, Senior Vice President of Fleet Operations at Fleet Advantage. Brian, welcome to The Heavy Duty Parts Report. So happy to have you here.
Brian Antonellis
Great, thanks for having me.
Jamie Irvine
In the intro, I pulled a quote from some marketing from your company, and that’s what we’re going to talk about. We’re going to get into the details of this. But before we do that, Brian, for the listeners who may not be familiar with Fleet Advantage, can you just give us a brief overview of your organization and the role it’s playing working with fleets to help with their costs and their strategy?
Brian Antonellis
Fleet Advantage is an asset management company. We have 36,000 assets on the road today. We work with 37 out of the top 100 private fleets. And we really bring a couple of key areas of expertise to help our customers manage their fleets better, right? First is data analytics. We’re going to talk a lot today as I reviewed the questions we’re going to go through. A lot of them revolve around the economics of the assets. And it’s amazing how many people don’t know how much their existing fleet costs them. And when we talk about change that’s happening in the industry, you have to compare it to some sort of constant, right? Two, we bring a team of industry professionals. So while, yes, we’re in the finance space, right? Our team is made-up of transportation professionals that ran fleets for large private fleets, and they’ve worked for 20 plus years managing the assets and all the complexity that comes with it. And then the third thing really is a team that can customize a solution for you in our office, whether it’s the way you need to see documents presented, the way, you know, trucks need to be delivered, right? Any of that complexity, and we’ll talk about it throughout here in the next little while, we can come up with a customized solution for you.
Jamie Irvine
So Brian, your recent industry benchmarking highlights what you call procurement paralysis. Say that five times fast. What are fleet leaders hesitant about right now? What’s driving the paralysis?
Brian Antonellis
So you really have to think back of where we’ve been over the last probably six years now. So obviously we went through COVID and it changed our delivery and production cycles dramatically. In 2020, production dropped down to about 180,000 tractors a year when it had traditionally been somewhere around 300,000. Then we went through a cycle of supply chain restriction where even though there was demand for the tractors, they couldn’t build them. And during that time, what happened was their existing fleet, the cost to operate went absolutely through the roof. Now that we’ve come out of the restrictions of COVID, the supply chain challenges, everybody wants to get back to where they traditionally ran from a cost base. So everybody’s trying to cut costs, understand what they have to do to move forward, but that’s challenging when you’ve been on the roller coaster for five or six years, and if that wasn’t tough enough, to get back to what your normal cost base is, we also have a regulation change coming in 2027. For several years, we had this sort of pairing of what they called the CARB regulation in the 17 states started in California through the CARB, the California Air Resource Board, and then it paired with the EPA 27 NOx reduction. Over the last 24 months, we’ve seen the CARB portion of it go away. The new administration took away the EPA waiver. CARB could no longer stand. So a regulation that everybody was preparing for is now gone. So that certainly put some hesitancy into the market. But then on the EPA 27, that’s still coming, right? So that’s a NOx reduction down to 35 milligrams, which is going to be different for everybody. So how is the industry treating that change? Everybody had to redo their engine platform and make sure that they could meet the EPA 27 NOx regulations. So, you know, everybody went about it a different way, but the end result is this. In calendar year ‘27, which will be model year ‘28 tractor, we’re going to see a cost increase after all the pushes and pulls between CARB and EPA of about $12,000 to $15,000 per asset. At the same time, the industry is going through a for-hire recession in the trucking space where demand has been fairly low. So there’s not demand to build new trucks, and people are coming down to this decision point where demand is still kind of low, but we have this regulation coming, and we have really about six or seven more months to buy trucks this year at $12,000 to $15,000 less than they’re going to cost us next year, but my demand is low and they’re really stuck in this space where they don’t know what to do. Now, we see the trucking recession is starting to lift and we’re seeing rates start to rise, which is giving a little bit more confidence. Over the past couple of months, you’ve seen the number of production slots that have been filled starting to rise because I think people are getting more confidence. But leaders today are in this space where demand is still fairly low, on the for hire side, yet we have this big cost increase coming and how are we going to navigate it?
Jamie Irvine
It’s just the theme of the 2020s, right? Everything is upside down. Everything is different, more challenging. It’s just. Been a crazy time. I do agree with you. It’s such a roller coaster. So everybody’s going through this together. From your data, what’s the key differences between the fleets that have figured out a way to remain profitable and those that have not?
Brian Antonellis
Great point. For us, what we see across everybody that’s been successful is understanding the economics of your current fleet. I can’t always control what tariffs are going to do. I can’t control the cost increase of a new truck next year. But there are some hard and fast facts that apply to every single trucking company out there when it comes to economics of their current fleet. And it really comes down into two buckets. For the hardware itself, you have your MPG or miles per gallon and your fuel cost. And when you’re looking at your fuel cost, a truck goes through its life cycle. So you’ll hear me reference this a couple times, right? It ages. And it’s not just the, you know, hey, it’s four years old or five years old, it’s really the performance as it ages. When a truck starts off, it’s getting its optimal fuel performance. And over the next, you know, I use 100,000 miles when I do these examples ’cause I’m not a finance person, I’m a truck guy, right? So I’ll use 100,000 miles. If you’re going through and you’re getting seven and a half miles per gallon in year one, you’ll get that performance right till you hit about 400, 450,000 miles in year four. And then you’re gonna start to see the fuel performance degrade. It starts to tick down a couple of tenths every year. Why? The engine’s older. It just isn’t as tight as it once was, and it’s not getting that performance. But what’s happened over those five years? With the GHG mandates to improve fuel economy, the trucks within that space that came out new every year, there’s a compound annual growth rate of about 2% improvement on MPG. So by the time you get to year four and five, you’re now 8% to 10% behind where the industry is and your fuel economy is degrading in your truck. So you quickly become 10% below the industry. And that doesn’t sound like a lot when you’re thinking about a passenger car, but running a truck at, you know, today it’s what, four and almost $5 diesel with what’s going on. When you look at that, you start to realize it’s tens of thousands of dollars annually that you have between new equipment and your existing fuel economy.
Jamie Irvine
We’re recording right now in April 2026. There is a full-blown conflict in Iran. Oil per barrel has skyrocketed just like overnight. And that’s hitting us at the fuel pumps right now. So I want to ask you something. If you are in that situation and your equipment’s four or five years old, you’re 10% behind the market. So at like $4 a gallon, it’s bad because you’re 10% behind the market. But at $6 a gallon, how much worse is it?
Brian Antonellis
Yeah, so you just got to do the math, right? But it can be as much as $5,000 to $6,000 annually negative to see that fuel increase. And the funny thing is, Jamie, fuel isn’t even the toughest part. Of course, fuel affects the total cost of ownership, right? But you’re at that decision point. So you’re going to have to buy a new piece of equipment where your capital cost is going to raise. You’re looking to the fuel offset to say, but when I get that new piece of equipment, I’m going to save 8, 10, $15,000 a year, depending on where you are on that sliding scale. And then the big challenge really hit you is with repair and maintenance costs. And this is the one that people don’t really look at because they happen in small increments. So let’s think about that truck aging again. In year one, at 100,000 miles a year, it’s about a penny and a half a mile to maintain your piece of equipment. That comes out to about $1,500 a year. By the time you get to year three, you’re roughly at five cents a mile or $5,000 a year. By the time you get to year five and six, with all the complexity that’s been introduced to this equipment over the past couple of years to reduce emissions, you’re somewhere between 12 and 15 cents a mile or $12,500 to $15,000 a year to maintain that piece of equipment. And what comes along with that, more downtime, it’s in the shop, increased complexity for your technicians. So when you’re thinking about the economics of your truck and you’re saying, I have paralysis to make this decision, like you were saying earlier, you have to understand where you are from a fuel economy standpoint and that $8,000 to $12,000 savings we’re going to see on the fuel side when you get a new piece of equipment. And then if you’re in year five or six of your piece of equipment and you’re paying $15,000 a year, in year one, you return back to that $1,500 maintenance costs. So you’re gonna save $13,500 on the maintenance side. And that’s why when people get just really frozen and they say, I can’t make a decision, and I ask them key elements of their current fleet. Well, tell me about your fleet. Tell me how your fuel economy’s going. How does it compare to where you’d be with a new piece of equipment? How does it look like from a repair and maintenance standpoint where you’d be if you return back to year one maintenance and started that cycle over again? Fleets that are confident in their decisions, understand the cost of new equipment, understand the fuel, understand their maintenance. And when you know those three key points, you can make a solid decision. Sure, there’s the utilization of your fleet and there’s, you know, how many trucks you can reduce if you’re in a recession every time. But really knowing those three key points is what takes people away from being stuck or frozen and afraid to move and really afraid to communicate internally throughout their organization and why you’d want to make an investment when the market isn’t as strong as maybe you’d like to be before you spend that capital.
Jamie Irvine
Yeah, and all I can think about is when you do get to that older piece of equipment where you’re doing more maintenance, then all of a sudden you’ve got parts choices to make. And, you know, it’s funny, we can always make things worse. So then we start adding on poor decisions, poor quality parts, parts that don’t really help with lowering total cost of operation and we just make a bad situation worse. It’s time to hear from our sponsors. We’ll be right back.
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We’re back from our break. Make sure you go and check out the links in our show notes to all of our sponsors.
Okay, let’s get back to this episode. Brian, thank you very much for kind of setting up what is causing this paralysis and decisions. I think we have a better understanding of that. But I wanted to talk to you about a few other things that are definitely impacting our industry. So let’s start with tariffs, engine changes, regulatory pressure. These things all hit at once. So how should fleets be thinking about things like risk management when there’s so many variables at play?
Brian Antonellis
Yeah, so you have to break them down individually. Right? So we go back to what’s the current economics of your fleet? And then what role does a tariff play in it, for example? So a tariff is just a cost increase passed along. What we’ve seen is we’ve settled out at somewhere around $4,000 to $5,000 for anybody that builds outside the U.S. We do have some production facilities within the U.S. where that tariff is limited. But essentially, that’s just a cost of goods increase. So if you take that $4,000 to $5,000 and you think about how that impacts you monthly broken up over 48 or 60 months, you’ve got to compare it to the current economics. So if it’s going to raise the cost of operations $100 a month on the payment of your equipment, go back to what we talked about with repair and maintenance cost. We’re going to remove $15,000 a year, or if you put in the year one, $13,500 worth of cost. And you got to have that baseline to compare each of these challenges to. I’d say really where we’ve seen people struggle is when they get frozen and then they start doing activity that they think is driving value, but it’s really not. So imagine a case where a fleet director has a tariff challenge in front of them, and instead of being able to compare it versus current fleet versus new fleet, they kind of fall into that paralysis. So they start doing projects like, I can save 2% of my brake shoes, and that’s going to help me drive down cost and it’s going to allow me to show the effort that I’m giving to my organization because times are tough, 2% on brake shoes may save you $50 per track per year. And when you compare it to the $13,500 in savings and the fuel savings that could be possibly achieved based on your five-year run rate and where you’ve been, is that really value? I don’t know. While I think that has to happen in keeping your parts providers honest and making sure you do a proper RFP, that does provide value. But if you’re avoiding the larger question around, should I replace my equipment or should I not? I think you need to solve that problem first before you work on some of those secondary items.
Jamie Irvine
Yeah. And it’s not like doing both isn’t a good idea. It totally is. It’s just when you get kind of upside down and you’re focusing on things that aren’t moving the needle enough and you’re ignoring the thing, the big elephant in the room that needs to be addressed.
Brian Antonellis
And, you know, you asked him about risk management. We’ve also gone through quite an evolution of technology. But if you’re still holding on to trucks that were 2020 and prior, and now we’re in ’26, there’s also been great changes in safety technology. I mean, it’s standard to have a full suite of safety options on every truck now. You have to literally go in and deny an option and say, you know what, I don’t want lane departure anymore. I don’t want collision avoidance. And from a, you know, the advice I always give our customers is, you know, think about yourself in a position where you’re going through litigation. And there’s a document that said, I didn’t want collision avoidance because I wanted to save a couple of thousand dollars, or I didn’t replace my equipment. I ran older equipment while I had newer equipment that was safer. And it’s through its sort of grandfathered in period where people would think it’s acceptable. So understanding from a safety standpoint how older equipment affects you is also a piece of the puzzle to take into consideration.
Jamie Irvine
So I’m thinking about a kind of a shift that we’re seeing in the industry, which is a real move on the maintenance side from a more reactive stance, it broke, so now we have to figure out what went wrong and fix it, to a predictive, proactive maintenance approach. How does that factor into the conversations you have with fleets?
Brian Antonellis
If we get there, I’m really excited. If they have the data that shows down to the VMRS code level, what has been failing throughout the life of the vehicle, we can take that data and we can project where you’re going to be and what’s going to fail in the future. We talk about that escalating cost. We talk about it going from a penny and a half in year one up to 12 to 15 cents by the time you get to year five and six. When you can get down to the VMRS code level, you can go in and look and you can say, Okay, what happens in year four? Well, in year four, we have problems that are primarily focused on our emissions and DPF systems, and those are driving 60% of the cost. So now we have a decision point. One, we can get better with the trucks we purchase going forward because we can look at how we match the warranties to the actual events that are happening to make sure we extract the optimal amount of value out of the warranty. But also too, if you know that you’re going to have a transmission challenge at 550,000 miles and you’re on the fence of whether to make that decision, you know, I was talking averages when I say in year five or six, it’s going to be $13 000 to $15,000. But when you’re down to that level and we can identify certain components that fail at a particular rate, there may be bubbles included in that that raise that above $15,000. And we can start to forecast what that looks like. And fleets today are realizing the value of forecasting their failures, you know, because it does two things. It helps you control the cost of the individual repair. It helps you project when that piece of equipment should be replaced. But the other thing it also does is it allows you to have that failure in a controlled environment. There’s nothing worse than having a truck fail on the road. Now you’re not only replacing the brake or the emissions component, but you’re paying $1,000-plus dollars to tow it off. You’re doing it at a shop where you don’t have a controlled labor rate, and you’re probably doubling or tripling the cost of it. So I think the three areas are projecting when you should replace, understanding how to control the repair, and then matching your warranty to the life cycle of the vehicle and those major components to make sure you’re extracting the most amount of value. But great conversations when you get down to that detail.
Jamie Irvine
So as we talk about this, it makes me think of how much more complicated it is than maybe the average person would assume, right? And so when it comes to financial exposure, what do you see is kind of the blind spots that a lot of fleets have? And maybe as we talk about it today, we might be able to help some people who are managing fleets to open their eyes to those blind spots.
Brian Antonellis
From a financial structure perspective, you need to understand what you hope to achieve from that asset. So if you want to purchase the asset, you’re going to have to control all three aspects of it, the procurement of the asset, the management of the asset, or the use of the asset, and then the disposal of the asset. You need to be able to buy it for the right price, you need to be able to maintain it throughout its lifecycle, and then you need to be able to sell it at the end. When you’re talking about some sort of lease structure, there’s ways that you can participate in all or none of those bases of it. So you have to say to yourself, do I want to be part of the procurement or part of the disposal, or do I just want to use the asset? Do I just want the use of the asset and allow someone else to take the risk on the front end and the back end between purchasing and selling the truck. When you think about what that means, as a truck ages, you’re guessing where you think it’s going to be worth after five years of use, and then you have to sell it. It sounds very easy to sell a used truck. It is easy to sell a used truck that has seven or eight years old and 800 or 900,000 miles, but we know from the data that if you wait that long to sell it, you’ve essentially used an underperforming truck for several years, so you’ve taken a penalty there. When you look at selling a five to six-year-old truck that’s under 500,000 miles, and you’re finding a secondary user that knows there’s 20% or 30% value left, it may not be the optimal value of that truck, but there’s still value left in it. That’s a very different type of buyer than someone buying a million-mile truck. So once the customer can understand what portion of the space they want to play in, we can recommend the correct financial structure, right? For us, a lot of our customers operate in what you call an FMV or a fair market value lease. This means that we take care of the procurement, we take care of the sale at the end, right? We take the residual exposure when the truck comes back because they really want to focus on the use of the asset.
Jamie Irvine
Some people might listen to that and say, well, the lease option just sounds like the most obvious choice then, because then you don’t have all these other things that you have to worry about, where is there dissatisfaction with leases?
Brian Antonellis
It’s always in the same spot. It’s as the asset gets returned at the end. So what happens is a leasing company will place a residual value on a piece of equipment and they’ll say, you know, we’re going to get your stream of payments based on 70% of the value of this truck, and when you return it, we think there’s 30% value left. We’re willing to take that risk that that’s the right number, but you have to return it to us in a certain condition. That means your tires have to have 50%, your brakes have to have 50%. You can’t have damaged it. You have to make sure any of the body work’s fixed. For us, we’ve seen that as the biggest struggle. It also drove us to innovate. We’ve tried to say, hey, we know that’s the biggest struggle. Let’s think about it differently. Let’s think about how we manage that process. Let’s think about how we explain to our customers the value of the not having a residual value position, not having to sell a truck, and that there is truly value. You only paid for 70% of the asset. So we just have an agreed upon way to turn it in.
Jamie Irvine
We’ve talked about a lot of different things today, Brian. If you want people to remember just one thing from today’s conversation, what’s that one thing?
Brian Antonellis
So we started off with saying they’re in paralysis. You don’t have to be. You need to understand the economics of your current fleet. You need to understand the two key drivers, fuel economy and repair and maintenance. And then when it comes to picking a structure, you need to decide, do I want to have the use of the asset or do I want to manage the entire lifecycle, which includes procurement, the lifecycle, and the disposal, and then play it up against the used truck market? If you can get yourself to understand the current economics and the structure you’d like to have, you shouldn’t be stuck in paralysis. You should make a decision. Costs are going up next year. While it’s going to be a challenge, let’s make sure you make the right decision by asset for your company.
Jamie Irvine
You’ve been listening to The Heavy Duty Parts Report. I’m your host, Jamie Irvine. We’ve been speaking with Brian, Senior Vice President of Fleet Operations at Fleet Advantage. To learn more about how Fleet Advantage can help you, visit fleetadvantage.com. Links are in the show notes. Brian, thank you so much for being on The Heavy Duty Parts Report.
Brian Antonellis
Thanks for having us.
Jamie Irvine
And to all of you listeners who are with us right to the end, I just wanted to say that when I think about today’s conversation, for all of those people who are part of the parts industry and are supplying fleets with parts, I think sometimes it’s easy to walk in every week with your flyer or whatever part you’re featuring and to be very focused on what you need out of the interaction, which is to sell parts to these companies. But I hope that today’s conversation opens your eyes to the complexity that fleet operators are facing and the decisions that they have to make. And so if you’re trying to sell them parts and you’re trying to help them with their operations, try to see the bigger picture and see how your solution can fit within that to try to help them to improve their situation. Really, at the end of the day, I know we’re there to sell parts, but we’re there to provide that service. So something to think about. Thanks again for listening, and as always, I want to encourage you to be heavy duty.
