Sailing apart

Contractor, government official showing differences in truck purchasing patterns

Survey Article February 21, 2003
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Last year, the public and private sectors were in the same
boat. Now there seems to be different ideas on how to run a ship.

The ROADS & BRIDGES 2002-2003 Truck Acquisition and
Maintenance (TAM) Survey shows a market still determined to bring back some old
magic through maintenance, but in terms of acquisitions the government and
contractor groups seem to be following their own set of orders. State DOT,
county and municipal officials are still on the same path of replacing old
trucks with new ones. The contractor, on the other hand, has gone from keeping
a balance in its fleet to weighing heavy on new acquisitions.

"Look at the housing market," Rob Swim, marketing
manager for International, told ROADS & BRIDGES. "The housing market
has experienced a boom the last two years, and the private contractors that end
up building the houses, making the curbs and sidewalks and building the roads
are making the money.

"The other thing is the federal government is giving
money to the states for highway construction, but that is normally contracted
out to private contractors."

ROADS & BRIDGES' 2002-2003 TAM Survey was sent to a
total of 1,987 decision makers in the industry, with participation coming from
261, or a little over 13%.

Buying together

Once again feedback came from high places. On the contractor
end 76.3% of the respondents held either an owner or executive position, and
67.7% of government input came from a supervisor or department head.

The complete breakdown of respondents was as follows:
contractor 37.1%; state DOT 10.7%; county agency 16.1%; municipality/township
28.4%; toll authority .8%; and other 6.9%..

Last year's survey revealed more of a bond between the
contractor and government worker.

Replacement vehicles are where most of the action took
place. Of the trucks that were purchased in 2001, 78% fell into the replacement
category at the government level, led by Class 8 (220 units, or 91.7% acquired
in class), Class 2 (103/81.7%) and Class 1 (97/57.4%). Contractors swiped at a
64% rate, with most falling in Class 2 (134/69.8%), Class 1 (176/60.1%) and
Class 8 (78/70.9%).

Only 22% of the buys were actual additions for government
sectors. Class 1 was the top addition (72/42.6%) followed by Class 2 (23/18.3%)
and Class 8 (20/8.3%). Contractors bulked up at a 36% rate. Class 1
(117/39.9%), Class 2 (58/30.2%) and Class 8 (32/29.1%) were the most popular.

Similar patterns were predicted for 2002 purchases, with
both government officials and contractors indicating that around 90% of
acquisitions would go toward replacement vehicles.

In the maintenance arena, the government had an average
maintenance budget of $702,224 in 2001 while the contractor worked with an
average of $125,221. Most routine maintenance was handled at the yard--94.2%
government, 83.9% contractor--but both groups turned to the dealer for major
fixes--62.3% government, 52.9% contractor.

Buying separately

Predictions sometimes have a short lifespan in the real
world, and our 2002-2003 TAM Survey revealed some changes.

Total 2002 acquisitions went as follows: 628 trucks were
purchased in Class 1 (167 contractor, 461 government); 369 in Class 2 (89
contractor, 280 government); 109 in Class 3 (47 contractor, 62 government); 90
in Class 4 (28 contractor, 62 government); 56 in Class 5 (22 contractor, 34
government); 43 in Class 6 (28 contractor, 15 government); 235 in Class 7 (16
contractor, 219 government); and 223 in Class 8 (58 contractor, 166
government).

But further breakdown shows a much stronger clash between
the two groups. Out of the 1,299 trucks bought for government use, 1,111
(85.5%) served as replacements. Four truck classes led the way--Class 1 (397
units, or 86.1% acquired in class), Class 2 (196/79%), Class 7 (210/95.9%) and
Class 8 (149/89.8%).

Contractors, however, only classified 144 (31.5%) of 455 new
vehicles as replacements, with Class 8 (32/55.2%) and Class 2 (40/44.9%) coming
out on top.

Adding to fleets was the way to go for private businesses,
as 311 (68.4%) of the total purchases increased existing inventory. Most went
to Class 1 (129/77.2%), Class 3 (30/63.8%) and Class 6 (25/89.3%).

The government scaled back considerably when it came to
additions to fleet. Only 188 of the 1,299 acquisitions--led by Class 2
(84/30%)--were additions.

Planned buys for 2003 show contractor action leveling. Those
of the private sector surveyed expect to purchase a total of 309 trucks--55.3%
additions and 44.7% replacements--with the most coming in Class 1 (118) and
Class 2 (56). Class 1 is the top replacement (50/42.4%) and addition (68/57.6%)
for contractors. Class 2 (30/53.6%) and Class 8 (33/84.6%) also are top
additions for 2003.

The government appears to be satisfied with its current
pattern, marking 1,059 (86.8%) of its 1,220 planned acquisitions as
replacements. Class 1 (394/88.5%), Class 2 (188/68.1%), Class 7 (192/97%) and
Class 8 (145/93.5%) appear to be replacements of choice. If additions will be
made at the government level it will be in the Class 2 (88/31.9%) range.

About the author: 
Bill Wilson is editor of Roads & Bridges.
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