Element Fleet Management has created a cost of ownership index whose initial assessment shows a decline of 14 percentage points year-over-year in those expenses due to lower fuel prices.
Element, based in Toronto, said in a statement that its initial Total Cost of Ownership Index, or TCO, was created to help fleet managers and finance professionals make more informed decisions. The initial index was based on 2015 and 2014 costs and includes more than 2.2 million commercial trucks.
“Lower gas prices provide an opportunity for fleets — or individuals — to make replacement investments, increasing safety and fuel efficiency without a major year-over-year spike in expenses,” said Bob Sandler, senior vice president of strategic consulting for Element Fleet Management.
The statement also said, “The demand for fast, efficient and reliable materials transport is steadily rising — an indication that the U.S. economy is thriving.”
In addition to fuel costs, the index measures depreciation, maintenance and interest expense. While fuel costs fell 29%, depreciation and maintenance expense increased.
The latest reading in the index was 83.3 for 2015, compared with 96.8 for 2014 and an index reading of 100 for the base year of 2013.
