Convinced that Blue Flash Express needed to take a different approach, Aguillard (pictured below) contacted Peterbilt of Louisiana and PACCAR Financial. Last year, the company took delivery of 26 Peterbilt Model 579s financed through fair-market value (FMV) leases. The tractors are equipped with 72-in. high-roof sleepers and 455-HP multi-torque PACCAR MX-13 engines. Plans are to continue adding the 579s to the fleet until all 50 company trucks are replaced.
“This way we are operating premium trucks with payments that fit our operation’s budget,” Aguillard states. “The fair market value lease allows us to choose trucks with the specifications we need, and at the end of the lease we have the option to buy the truck, re-finance it or simply walk away. We don’t have to worry about residual values or what’s happening in the used truck market since PACCAR Financial takes that risk.”
Financial benefits
Blue Flash Express is also realizing financial benefits by operating new equipment. For example, there’s savings from improved fuel economy. “We’ve seen a .5 MPG improvement compared to trucks we replaced,” Aguillard reports. “With each truck averaging between 125,000 and 150,000 miles annually, we’re saving about $5,500 per truck in annual fuel costs or about $143,000 for all 26 trucks.”
While the fuel savings is significant, Aguillard also relates that the new trucks at Blue Flash Express have had fewer warranty and other issues. “While it’s difficult to quantify,” he adds, “the reduction in downtime due to unexpected repairs has been substantial as well.”
Besides those benefits, Aguillard notes that Blue Flash Express has seen its driver turnover rate plummet. “Once we started putting new Peterbilts into service, we haven’t had to replace a single one of the 26 drivers assigned to those trucks,” he says. “Every year we were replacing a majority of our drivers and would have expected to replace at least a dozen or more drivers within a year’s time.”
The impact of a lower driver turnover has been transformative for Blue Flash Express in several ways.
“Before, our customers wondered what was wrong at our company when they saw a new driver with each delivery,” Aguillard relates. “Then there was the drain on employee morale because of the potential for them to be confronted with unhappy customers due to shipping delays or more work that had to be done to get caught up.
“It also took a lot of management time and effort to hire and train replacements,” Aguillard continues. “It can take upwards of three weeks or more to hire and train a new driver, and in some cases that meant we had eight or nine tractors sitting idle at any given time. Meanwhile, we were still paying for those units and that meant a lot of money was going out the door.”
For Blue Flash Express, closing the driver revolving door by bringing in new equipment has addressed many issues that were hampering growth and success at the company.
“Today,” Aguillard concludes, “we no longer watching a high annual driver turnover rate cause a seemingly unending stream of profits to go out the door.”
