TCO is a vital factor to consider when investing in truck equipment. But what contributes to the total cost, and what should you take into account?
Equipment like your trailer coupling and underrun protection device may seem like small parts of the entire truck and trailer system, but they come with a cost. Just like any other piece of important logistics equipment, they require assembly, maintenance and operation to provide value – and all of that costs money.
When sourcing equipment, some companies get too focused on the purchase price. This is an important cost, but it’s just one of many that contributes to the total cost of ownership for your trailer coupling or full system solution.
We’ve written about the total cost of ownership (or TCO) in other articles on the blog, but in this article, we’re going to look in detail at what factors actually contribute to your TCO – and how the right supplier can help you reduce them.
What contributes to TCO?
- The purchase price of the coupling
This cost is simple to understand – it’s simply the price you pay to buy the coupling and accompanying equipment. It’s the cost that often gets the most attention, but it’s almost always quite a small part of the total cost of ownership generated over the coupling’s entire lifetime.
- Various administrative costs linked to the coupling and equipment
These are the collected costs of all the work linked to specifying, ordering and maintaining the equipment you use. Aside from the practical work on the road and in the workshop, you need to work with the supplier to specify the best alternative, order and pay for it, order spare parts, pay invoices, get support with maintenance and assembly, and much more. If your supplier is slow to respond and doesn’t make information available online, the amount of administration will grow – and contribute to raising the total cost of operation.
- Assembling and mounting the coupling and equipment
Labour costs are some of the biggest contributors to the total cost of ownership, so the costs of assembling your equipment has a major impact. Here, the cost can vary dramatically based on the supplier. If the equipment is completely disassembled, or sourced from multiple suppliers, mounting could take longer and labour costs will grow. Suppliers that provide pre-assembled full system solutions including underrun protection can help reduce this part of your TCO significantly.
- Service and regular maintenance on the coupling
Couplings and other pieces of truck equipment need regular maintenance throughout their lives to ensure reliability and performance. This makes up a significant part of the total cost of ownership in two ways – the cost of labour, and the cost of the truck being out of action while it’s in the workshop. Robust equipment that is quick and easy to maintain allows your trucks to spend more time on the road and reduces this part of TCO.
- Operational and driver costs
Of all the costs that contribute to TCO, none are higher than the cost of the driver. The cost of their labour to make up the majority of TCO, even when it comes to your trailer couplings. The cost of the driver is a fairly ‘hard’ cost – it’s difficult to reduce it dramatically. However, you can still bring it down – for example, couplings that are easy and efficient to operate (possibly with remote indication or operation that reduces manual work) allow the driver to get their job done quicker and easier, letting you do more with your existing resources and cutting costs.
- The level of ergonomic design and safety
This aspect of TCO is closely related to both the driver costs and maintenance costs. Ergonomic and safe design can make the driver’s job more efficient, but the main purpose is to prevent injury that would keep them off work. Truck driving is a physical job, so features like assisted opening and remote operation protect the driver’s body from strain injuries and awkward positions, keeping them safe, comfortable and productive. Safety tools like jackknifing prevention systems also cut TCO by reducing the number of minor jackknifing incidents that require a workshop visit.
- Access to quality spare parts
Effective maintenance requires quality, original spare parts. But if it’s time consuming and difficult to order the parts you need and shipping is slow, even the most talented mechanics won’t be able to work effectively. In the worst cases, downtime may even occur due to parts being unavailable, or non-original spare parts lacking the quality you expect. For many companies, issues with spare parts is one of the main causes of inflated TCO, so sourcing a supplier with a well-developed spare parts supply chain is vital for keeping costs down.
- How easy it is to replace or upgrade the equipment
When your fleet’s needs change and it’s time to upgrade your equipment, the process should be simple and straightforward. A number of factors can make upgrading difficult, like the modularity of the system, the supplier’s product range or the availability of mounting and assembly instructions. Upgrading equipment can often lead to productivity gains that earn you money in the long run, so make sure all those profits aren’t eaten up by a challenging upgrade process.
Find out how to bring down your trailer coupling’s total cost of ownership
If any of these factors are causing your costs to escalate, get in touch. Our experts can help you identify the weak link in the chain and find a solution – cutting the costs generated by your trailer coupling and truck equipment, and keeping your trucks on the road.