Sample

The number of trucks in the fleets varied greatly, with the smallest fleet having only five trucks and the largest having almost 300 trucks. In average, about 60% of the trucks in these fleets were made by Volvo, almost 40% by Scania, 1-2% by Mercedes and then one single truck from MAN (not even noticeable in Figure) Almost 60% of the trucks worked in long haul traffic, about 40% were distribution vehicles and a few were timber trucks. In the figures for distribution and long haul there are some special transportation types included such as petroleum and milk. Important to note is that all respondents except one were both CEOs and main owners of the firm they worked for. The remaining one was a merely a manager employed by one of the fleets. All fleets were based in the South of Sweden.

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Volvo Scania M-B MAN

Figure 36: The shares of different brands of all trucks in the fleets of our interviewees

Distribution Long haul Timber

Figure 37: Approximate shares of fleets per transportation type

Figure 38: Service and repairs location and service contracts

93 4.5.2 Tracking problems

The first issue that we wanted to explore in this part of the thesis was whether the companies keep track of problems they have with their trucks so that they can compare different models and make fact-based decisions regarding buying, selling etc. It turned out that the two companies that had their own workshops and made most repairs themselves kept records of all the repairs that were done and they seemed to have a good view of problems and a good system that could support them when they wanted to check something up. Among the others, most companies had little control of what was done on their trucks. One of them, who made some minor repairs in-house, claimed that his workshop staff kept good records, but it was unclear if there was an organizational support for this and the owner seemed to think that his workshop manager, who kept track of the repairs, was too picky and he gave the impression that he found it unnecessary to keep detailed records. The remaining four companies had no structured way of following up problems. Some records were kept of costs, but none of what repairs that were actually done. One important factor explaining their lack of follow up was that most of the companies that did not have their own workshop had some kind of service contract on their trucks and therefore did not pay for all repairs. There were some possibilities for them to track through the internet what had been done on their trucks at authorized brand workshops, but not all of the workshops were connected to the system so in most cases they could not get the full picture. One manager of a large fleet said straight out something that we feel is probably valid also for most of the other interviewees.

“I can not really see the use of following up the repairs of each individual truck.“

Fleet manager (101-200 trucks)

What we can conclude from this is that even though there is knowledge about reliability and durability among the interviewees of the trucks they own, the knowledge is not exact or structured but rather at a “sense level”. For fleet managers that do not keep structured records of the repairs done, we might expect that the issues leading to downtime will have a big impact on their satisfaction, whereas they might not even know of all the repairs that are done together with planned service. For those that have their own workshops, more or less all problems will probably be noticed and be reasons for dissatisfaction. Problems leading to the truck braking down on the side of the road will of course be major problems to all owners, although less of a problem for those that have contracts for good action services that swiftly can help out. Problems that do not cause immediate breakdowns but that need to be fixed

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within a day might be less of an issue for those that have their own workshop than those who do not, while having your own workshop allows you to prioritise among vehicles, you may have an influence over the open hours of the workshop and you can yourself plan your stock of spare parts, whereas those that turn to authorized workshops might need to wait for some time before getting the attention of service personnel to their truck. In some cases of course the advantages of the authorized workshop will outweigh those of the in-house one and may allow for quicker solutions to problems. Such advantages may for instance be competence regarding some special technical problems, access to support from other workshops, diagnostic tools etc.

4.5.3 The use of knowledge about reliability and durability

Occasions where knowledge about reliability and durability of specific models could be especially valuable is when one is thinking replacing an old truck with a newer one, adding a new truck to the fleet in order to increase capacity or selling an old truck to decrease capacity.

For the selling or replacement decision, we expect that many truck owners have some kind of rules of thumb that they use for judging when it is time to change a truck. However, there might also be some adjustment to the state of each individual truck. A truck that should be replaced according to some rule of thumb might be kept if it has a good track record and is in good condition. Knowing when it is most clever to replace each truck clearly demands a good knowledge about the state of the trucks that are currently in the fleet.

Firstly we tried to see how our customers reason regarding the timing for replacing and what defines the appropriate time to sell a truck. Then we tried to go deeper into how the fleet owners/managers acquire information about reliability and durability of different models and how they communicate their knowledge to others.

First of all, it seems that we can state three main positions or strategies regarding replacement of trucks.

1. Replace trucks at a specific mileage or age in years with minor adjustments for the current states of the individual trucks.

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2. Replace trucks before their reliability gets “too low”. At some approximate mileages, start to be more observant and start thinking about replacing, but always use the state of each truck as the guideline.

3. Use the trucks until they are considered to be worn out, which among our interviewees seem to be when you get an expensive failure when the truck is in such a state that they next failure is likely to be imminent.

Quite surprisingly four of the seven surveyed firms had a strategy close to no. 3 above. The trucks where sold when they got into a situation where a repair was needed but not an attractive option. For these firms the residual value of the trucks was considered unsubstantial and the trucks where often sold to less developed countries or even to junkyards. The other firms tried to replace trucks before the reliability of the trucks got too low and their strategies can be positioned at different points between 1 and 2 above. Selling the trucks before the reliability was too low allowed them to get relatively high prices when selling, but the reason for selling at this time was more than anything else to make sure that the trucks that were used were reliable and would not cause any obstructions to business. For firms running both long haul and distribution traffic, it was as expected most important to keep the long haul trucks new and in a good condition, while it is more problematic to get a breakdown on a long haul truck than a distribution truck, which most of the time runs in proximity to workshops.

Two of the firms that replaced the trucks before the reliability got too low were really proud to say that they had such a good reputation for taking care of their trucks that they got much better prices than others on the market for used trucks. One of them talked about people cueing to get hold of one of their used trucks and he claimed that they could get 100% more than some other firms when selling comparable trucks (comparable apart of course from the condition of them). The firms that seemed to take less good care of their trucks and drove them until their were totally broken down said that the pricing of used trucks was very standardized and it was only factors such as model, engine, axle configuration, mileage etc.

that made a difference for the price.

4.5.4 Communication within the industry

To know which of your trucks to replace and when to do it you need to have information about your own trucks as previously noted. But in order to know what to replace your truck

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with or what truck to buy when you need more capacity, information about your own trucks is not enough. You also need to know some things about the new truck, which is especially hard if you have not previously owned the models you are considering. Let us start with the case that a manager of a truck fleet wants to buy a truck of a model that is already represented in the fleet. In that case the most important base for the impression about the reliability and durability of that model is, according to the interviews, that persons own experiences. One of our interviewed owners states that he checks the internal records of repairs before he buys a truck of the same model, but most of the others seem to depend merely on their feeling of that model. We believe that people in general tend to give their own experiences very high importance no matter what the issue is. If one thinks about it from a statistical perspective, it is of course not very wise to base the conclusions about a brand or a model on just one or a few units. If it is possible to acquire more information from others, that seems to be a good alternative. However, it seems that most of our interviewees do not do this and, without support for it, I personally think it applies to most other fleet managers too. Having the experience your self makes it real and important. If they have had an experience themselves, they seem to find it unnecessary to ask others.

We would have expected that the owners of these fleets would state other fleet owners as an important source of information before buying a truck, at least if buying a model not currently in the fleet, but this was quite rare. Only one owner stated clearly that he would call other owners and ask them about their experiences. One interviewee said, after being specifically asked about it, that he might sometimes ask others. Many stated though that they would not.

One person gave the explanation that some find it embarrassing to call others on this errand and another manager had a feeling that the communication among truck fleet owners/managers had decreased and the business had become more “professional”. He explained that before it used to be very common that truck owners talked to everyone about their own trucks and about how good they were. They just did not want to admit that sometimes they might have made a bad purchasing decision. Two owners stated that they did not have any contact with other fleets and that they did not want to help others out while they are competitors.

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4.5.5 The importance of personal relations

Worth noting is that, in most cases, the person taking the purchasing decision is not the person with the best knowledge about the repairs of their trucks. For most of the firms that we have interviewed, there has been one person who is both CEO and major owner of the business and this person makes all the purchasing decisions. In the firms that are not very small, they usually have someone else who is responsible for maintenance and usually this person has the best knowledge about the actual reliability of the trucks. A striking feature of these leaders, the CEO/owners, was that most of them had very strong wills and opinions and when it came to purchasing decisions it was their call. If they felt like asking others in the company about their view, they sometimes did, but in general they just did what they felt like themselves. It was clear that most purchasing decisions where based more on feelings than on facts. As is suggested by the statements below, different managers have different proportions of feelings and facts as a base of their purchase decision. The first statement suggests a very high share of feelings, whereas the second one represents a decision where the facts are considered before the feelings.

“I buy trucks from the one that I think is the most fun to make business with. I do not care what others think about the trucks.”

Owner and manager of a fleet (101-200 trucks)

“I add together the purchase price and the cost of the service contract. If there is a large difference in total cost between manufacturers, I might buy the cheaper truck.

Otherwise I prefer to buy one that I know is good and from a manufacturer that I have a relation with.”

Owner and manager of a fleet (201-300 trucks)

Several interviewees spoke warmly about customer events they had been invited to as customers. During these events they got the chance to discuss various issues with the manufacturer as well as with other customers. The relations between the interviewed customers and the manufacturers seem to be very important and in most cases very positive.

However, a few of the interviewees told us about personal conflicts they have had with representatives of the manufacturers and how these conflicts had made them change brand or

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at least consider doing it. The brand loyalty of the customers we have interviewed is extremely strong and in most cases it is built, to a very large extent, on personal relations.

Quite surprising to me was that two of the seven interviewees said that when buying a new truck, the absolutely most important input is the seller. If the seller says that the truck is reliable then he is trusted. One of them was the owner of a business with eight trucks, whereas the other was a manager taking purchasing decisions for a fleet of almost 200 vehicles. For the larger business, the turnover of trucks must be quite large, so the buyer must have seen that the seller actually does not give false promises, but rather delivers what is promised.

Trust is, as we all know hard to build up but easy to destroy, so if this buyer, after numerous trucks coming in and going out still trusts the buyer, there must be a good balance at the dealership between promising and delivering.

Also when buying a model of which you have no previous experiences, the previous experiences of specific manufacturers are very important. In the absence of a clear picture of how a specific model performs, the best thing one can do is often to consider previous performance of that manufacturer. Buying a truck from a manufacturer that has proved before to build reliable trucks naturally feels safer than to try a new manufacturer. However, one owner stressed that a new truck equals new problems. Only one of the interviewees mentioned the internet as a source of information about new truck models. When asked if trade press or advertising campaigns were interesting sources of information for them, most gave a very clear negative answer. One reason for the seemingly small role played by quantitative input, especially from external parties when taking purchasing decisions, probably is, as mentioned before that the decisions are made by persons who want to decide themselves and who are not very inclined to listen to others, but also that the firms that we have interviewed have a very high loyalty to brands. Most drivers are very clear with which brand they want to drive and they seem to be very resistant to changing. Most of the managers also seem to accept and adapt to these strong preferences among drivers, as long as they are only concerning brand of the trucks and as long as the brand they want to drive is Volvo or Scania. The drivers often also have requests regarding engine power, extra lights, exclusive interior etc., but these requests are not considered as important as brand preferences. Putting a driver in a truck of a brand he does not like, is believed to cause the driver to treat the truck abusively. For most of the interviewed fleets, there is a very strong preference for the two Swedish brands, Volvo

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and Scania. The bases for the purchasing decisions can be expected to be different in countries where there are not any local firms that are so dominant.

4.5.6 Building an impression

To get an idea about how these owners or managers of fleets viewed the reliability and durability of different brands, and even more importantly to get more ideas about what they based their impressions on, we asked them to rate the reliability and durability of brands and to explain how they believed that they had built up their impressions of the different brands.

When discussing the information that owners/managers base their purchasing decisions on, we have already mentioned that some of them would call others in their situation for input.

When we asked what things that might have built up their impression of the reliability and durability of trucks of certain makes, we got some more specific information about internal and external parties that might influence them.

Mentioned occasions when communication occurs frequently are trucker meetings, meetings within some cooperative of transportation firms and customer events that are arranged by truck manufacturers.

A number of mentioned sources of input for the respondents’ impressions of manufacturers can be found in Figure 39.

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Figure 39: Inputs to impressions about the reliability and durability of truck brands and models.

An interesting phenomenon that was mentioned in several interviews was that they used the number of trucks they saw of each make on the streets as an indicator of how good the make is. Now that they for instance started to see more MAN on the streets they concluded that probably the reason is that they are quite good. With the same logic they concluded that the

An interesting phenomenon that was mentioned in several interviews was that they used the number of trucks they saw of each make on the streets as an indicator of how good the make is. Now that they for instance started to see more MAN on the streets they concluded that probably the reason is that they are quite good. With the same logic they concluded that the