Service maintenance contracts are maintenance agreements between an equipment owner and a service provider governed by a written agreement or contract.
According to Kel Stanton, owner of Kel Stanton’s Mobile Diesel Service, in Brisbane. Service Maintenance Contracts define how the parties will interact and describe all the maintenance events covered, including scheduled preventive maintenance and unplanned maintenance and breakdowns.
Kel says that he is getting more enquiry from fleet owners to go down the contract maintenance route, “The trend is changing for fleets today because most fleets have one goal in mind and that is to serve their customers better,” Kel explained. “They believe contract maintenance packages allow them to do just that. Our core business is to provide various levels of ongoing service maintenance packages to fleets.
Kel Stanton is not alone when he speaks about the benefits of contract maintenance for fleets. Major OEMs have specific departments dedicated to monitoring equipment utilization to determine each vehicle’s optimum maintenance requirements depending on their workload, utilization, and how the driver operates it.
What’s on offer from the major OEMs
Freightliner: Like Mercedes-Benz offer two service plans with a range of flexible payment options.
1 BestBasic: Covers scheduled maintenance as per the maintenance book.
2 Complete: Covers everything in the BestBasic package along with all engine and driveline components.
Iveco: Call their maintenance & repair program Elements. According to the brochure, Iveco Elements provides the flexibility to select any combination from their four major overall planned maintenance packages.
1 Service Bond: Scheduled vehicle servicing only.
2 Friction: Wear and tear on all friction materials, including scheduled servicing.
3 Driveline: Wear and tear on driveline components, scheduled servicing.
4 Easy Road: Non-scheduled repairs, wear and tear, scheduled servicing.
Mack: Service Agreements according to their brochure, Mack provides three levels of service agreements.
1 Deluxe: This is the base model of Mack’s Service Agreements. It includes changing all fluids and filters and carrying out interior and exterior checks to avoid safety or reliability issues down the road.
2 Premium: Includes all of the above Deluxe Service Agreement work and includes repairs to components in the driveline (engine, transmission, rear axles).
3 Ultimate: The Ultimate option is their most comprehensive cover. This package includes both the Deluxe and Premium package maintenance and repairs to brakes and wheels, plus in-cab and electrical components.
Mercedes-Benz: According to their brochure, they offer two service plans with a range of flexible payment options.
1 Best Basic: covers scheduled maintenance as per the maintenance book or Telligent system.
2 Complete: covers everything the BestBasic package along with all engine and driveline components.
PACCAR: Offer repair and maintenance packages for both DAF and Kenworth through the financial department. No additional information was available at the time of writing.
Scania: Offer one of the most comprehensive OEM contract maintenance package options; they call Smart Transport Solutions.
1 Maintenance: Provides a flexible maintenance plan and monitoring package.
2 Maintenance & Preventive: Includes all of the above package and preventative maintenance vehicle inclusion.
3 Maintenance & Driveline: Incorporates all of the above package plus extended driveline coverage as standard.
4 Repair & Maintenance: Includes all of the above plus full coverage and on-road guarantee.
5 Fleet Care: All of the above packages plus a dedicated fleet manager and driver coaching.
However, Scania also offers additional savings for operators based on the driver score of the vehicle. For instance, a driver-score of 46%-56% considered a below-average score, with a cents per kilometre (CPK) of 6.97. On the other hand, a driver-score of 71%-85% is deemed an excellent score and sees the CPK drop to 6.14. What this means for the Scania owner is big savings in operating costs, for example on a truck that averages 200,000 km per year the CPK for maintenance is reduced by $1660 compared to a truck driven with a score of 46%-56%. For the elite level Scania drivers, those drivers who can maintain a score above 86% they receive a five per cent rebate off their annual invoice.
Scania’s Smart Transport Solutions is all about providing a safer and more efficient trucking operation. Their theory is that a driver who has a high driver-score pays more attention to operating the vehicle efficiently and is less likely to have an accident than a driver who has a low score. Consequently, fleets are rewarded for having drivers with high standards through reduced service maintenance costs.
According to a Scania spokesperson, the company do extend service agreements to included trailers when requested.
Volvo: provide three levels of service similar to their sister company Mack.
1 Volvo-Blue: This is the base model of Volvo Service Agreements. It includes preventive maintenance as well as changing all fluids and filters.
2 Volvo-Silver: Includes all of the above plus driveline maintenance.
3 Volvo-Gold: Includes all of the above plus all truck repairs and courtesy truck or financial compensation.
Western Star: Call their repair and maintenance program Star Assist. It offers three package levels.
1 Star Choice: Maintenance only package
2 Star Silver: Maintenance only plus driveline
3 Star Gold: Full repair and maintenance package.
Good New for Fleets
That fact that all OEMs offer a variety of service maintenance packages is good news for fleets. But it’s not all good news according to, Status Transport owner Brad Haack, “we’ve got trailers, forklifts, vans and other machinery that all contribute to the transport task that require servicing too. OEM service maintenance contracts don’t cover all the other equipment in our fleet.”
Kel Stanton believes the increase in customers opting for their contract maintenance is because fleet management understands that maintaining their own fleet is not one of their core competencies. Especially given the sophistication of today’s vehicles, the cost of diagnostic tools and servicing equipment along with the shortage of qualified technicians.
Budget Maintenance Costs
“We are seeing more and more fleets deciding that outsourcing their maintenance makes sense,” Kel said. “There is no question that outsourcing maintenance on a regular contract arrangement has many advantages over just letting a service provider handle your maintenance on an as-needed basis. Contract maintenance gives the fleet the benefits of being able to budget maintenance costs on a predictable basis over a long period of time.”
However, when it comes to fleet maintenance, Kel Stanton’s Mobile Diesel Service have a few arrows in their quiver over the OEM service maintenance contracts.
“As well as our Caboolture workshop, we have seven mobile service vehicles. We go to our client’s depots, so there is less downtime for our customers,” Kel adds.
“When a fleet first comes to us to discuss their maintenance requirements, we develop a comprehensive preventative maintenance package that includes all plant and equipment. It is not only for their trucks, (prime-movers) but trailers, forklifts, and other work vehicles, including office staff’s company cars.” We have quarry and mining operations with an extensive range of plant and equipment, and we service the lot. We are a one-stop-shop,” Kel explained. “For the fleets we service, it’s all about knowing what their operating costs are going forward.”
“Another important aspect of our service maintenance contracts is we have the tools to provide the visibility of the maintenance history of each vehicle that we service. This sort of comprehensive history from the cradle to the grave gives our client’s vehicles better resale value. Also having visibility to that data assists Asset Managers when making equipment and vehicle replacement decisions,” Kel added.
“However, when it comes to service maintenance contracts, it pays read the fine print in the contract,” Kel concluded. “If you’re not sure don’t be frightened to get a second opinion and take into consideration all your assets not only the new acquisitions.”
Demand on the services that Kel Stanton and his dedicated team provide has seen an expansion in the business that includes the acquisition of a more extensive workshop and more technicians.