Florilli outsources equipment maintenance
Feb 1, 2008 12:00 PM
Operating under a broker's authority, Fitzer saw an opportunity to grow his business and acquire his operating authority with the purchase of a financially troubled Florida-to-Illinois trucking company named Florilli in 1987. He moved his newly acquired trucking company to West Liberty, Iowa, and started the long, steady growth of Florilli Corporation.
A lot of the romanticism of trucking that first attracted him is gone, says Fitzer. Still proud to be a part of an industry that is so vital to the US economy, Fitzer now realizes success comes only with good business decisions.
Making the right business decisions has helped his fleet grow to 225 company-owned power units and 300 trailers.
The vast majority of the fleet's tractors are Peterbilt UniBilt sleepers. They are powered by Caterpillar C15 ACERT multi-torque 435-horsepower engines with 9-speed Eaton Fuller manual transmissions.
Florilli Corporation customers' freight is hauled in 53-ft Utility Trailers with air-ride suspensions, cooled by a mix of Carrier Transicold and Thermo King refrigeration units.
Those original equipment manufacturers (OEM) play an important role in the fleet's outsourced equipment maintenance strategy.
Aftermarket suppliers such as Bandag and Speedco — the only national network that specializes in quick lube and tire service for heavy duty trucks — also have a critical role in helping the Florilli Corporation fleet achieve the highest level of equipment uptime and customer satisfaction.
The outsourcing program Fitzer has in place today resulted from an evolution that has taken about five years.
“When we started,” Fitzer explains, “our goal was to remove the managerial burden of equipment maintenance by turning it over to an outside vendor. We were also trying to guarantee those maintenance costs by using a negotiated cost-per-mile formula.”
The first vendor supplying the outsourced maintenance services actually hired the Florilli Corporation's maintenance employees and used the company's maintenance facility to deliver those services. Later, an offsite supplier provided those services on a similar negotiated cost-per-mile contract.
“We soon learned, in our fleet, the management of the operations end of the business and equipment readiness are too closely related to the equipment maintenance discipline to take a totally hands-off approach,” Fitzer says. “That's how we evolved to the outsourcing program we have in place today.”
While actual maintenance functions are performed by outside vendors, it is no longer performed on a cost-per-mile basis. “Our management team makes the decisions about the level of preventive maintenance we need to have, and we pay for the actual work performed,” he says. “Trucks are serviced every 25,000 miles, and trailers are serviced on 90-day intervals.”
When repairs beyond routine maintenance are required, the local OEM dealer representative performs the work. With tractors on a three-year trade cycle, and trailers on a six-to-seven year-cycle, many of those repairs are covered by warranty.
“We know the program is working because we have accurate, meaningful data that helps us make the right management decisions,” says Fitzer. “When we implemented the last leg of our outsourcing evolution, we also purchased TMT Transman fleet management software.
“Utilizing the American Trucking Associations codes, every expenditure is tracked. After a truck is serviced at Speedco, the invoice is electronically sent to our system, so we know exactly what each piece of equipment costs us to operate.”
The Florilli Corporation management team recently took a close look at the fleet's three-year equipment maintenance cost history and found consistent improvement.
The data also proves valuable when new equipment purchases are made. The company has evaluated several competitive brand tractors and engines over that three-year period.
Fitzer acknowledges the data from the evaluation played a major role in the fleet's most recent equipment purchase.
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