TRANSPORTATION RESEARCH RECORD 1140

Vehicle Maintenance: Cost Relationship and

Estimating Methodology
JEFFREY E. PURDY AND JOHN D. WIEGMANN

An Investigation Into maintenance costs and programs at tran- • The magnitude of maintenance costs demands direct con-
sit properties throughout California is summarized. The objec- trol and scrutiny;
tives of the research were to study and repol1 on maintenance • The human, material, and facility resources applied to
cost Information, and on the need for maintenance manage- maintenance are usually unique to this function;
ment support. The materials presented In this paper are in-
tended to aid maintenance managers in planning, managing, • Costs can be separately collected and tracked; and
and controlllng maintenance costs and effectiveness. Cost rela- • Performance measures that reflect maintenance effective-
tionships are presented for the estimation of maintenance costs ness and efficiency can be established.
by element and maintenance function area. Graphs are pre-
sented for estimating total maintenance cost dependent on fleet The share of maintenance costs as part of total costs is often
siu and annual vehicle miles. Cost element contributions to more than managers realize or for which they can account.
total maintenance cost are identified for repair, inspection and Some of the maintenance resources applied to small and
servicing labor, fringe benefits, and overhead; maintenance medium-sized transit fleets may be shared or provided by other
administration, material, and supply cost rates are also
provided. local government organizations. Because costs picked up by
other entities are not always figured into the overall mainte-
Providers of public transportation are being challenged by high nance costs, the real cost of maintenance is often masked.
costs, dwindling sources of support funds, and pressures to Subcontracting some functions can also mask real costs, de-
improve services. To meet these challenges, managers must pending on the accounting methods used.
balance the need to take cost reduction measures against the Maintenance resources and capabilities in small organiza-
need to provide adequate budgets for maintaining and extend- tions are as specialized and unique as in large ones. In small
ing revenue equipment life. properties, practicality often dictates that staff and management
The direct impact of inadequate maintenance on vehicle life perform more functions than just maintenance. This require-
is well documented and well known to professionals. The ment may place a larger number of training and learning
importance of maintenance planning and cost control is not as requirements on the staff, but it should not prevent allocating
well documented, but is equally critical to transportation man- time and cost to the proper cost center.
agers. In the transit industry, maintenance costs Critical to establishing and effectively managing a cost cen-
ter is having the capability to measure and attribute perfor-
• Can account for more than 30 percent of total costs, if
mance to the center. Vehicle and equipment maintenance lends
fully identified;
itself well to performance indicator monitoring that enables
• Have increased 33 percent faster than vehicle operations
managers to monitor performance in particular areas by eval-
costs in recent years;
uating specific indicators in those areas.
• Have increased four times faster than general/administra-
By breaking down areas into indicators and calculating the
tive costs in the same period.
effects of those indicators, the manager can make reliable cost
The industry has responded by concentrating management estimates and develop effective budget guidelines. This cost
resources on maintenance costs and systems. center strategy facilitates managing maintenance processes and
functions.
MAINTENANCE: A CRITICAL MANAGEMENT
ISSUE Structuring Maintenance Processes and Functions
Managing Maintenance as a Cost Center
In revenue vehicle maintenance, the processes and functions
Many transportation providers focus on critical maintenance that must be performed are universal. The challenges in manag-
issues by managing the maintenance function as a cost center. ing these functions involve properly balancing resources
This philosophy can be (and is) applied successfully by among the functions and avoiding the temptation and penalties
providers over the entire spectrum of operation sizes and ser- of short-range thinking. The overall relationship between effec-
vice offerings. Small and large properties almost invariably tive maintenance programs and successful delivery of transpor-
treat maintenance as a cost center for the following reasons: tation services is clear and strong, but the long-term effects of
Booz-Allen & Hamilton Inc., Transportation Consulting Division, 400 specific maintenance management deficiencies are not always
Market Street, Philadelphia, Pa. 19106. obvious or immediate.
2 TRANSPORTATION RESEARCH RECORD 1140

REGUlAR
SERVICllllG

r---.. BASIC MAINTENANCE

. . _ . FUNCTIONS

FIGURE 1 Relationship of basic maintenance functions.

Figure 1 shows the relationship of the three basic mainte- Revenue for vehicle maintenance is either a cornerstone or a
nance functions to overall transportation operations. Servicing, bottleneck. When managed well, it is important but is not
inspection and maintenance (I/M), and repair are functions that noticed. Problems with maintenance are highly visible and
are indispensable to operations on a daily or periodic basis. have a deep impact on the transportation provider. Properly
How frequently repairs are needed is related largely to the allocating resources to the basic maintenance functions is a
effectiveness of the servicing and J/M programs. Failure to matter of defining clearly the overall requirements and balanc-
apply appropriate resources to any of the three basic functions ing the resources well. Put another way, there is little benefit to
has certain and predictable negative impacts on transportation be derived from too much capability in any one functional area,
services, or requires continuous, large investments in new but shortfalls can be punishing and can drive up costs.
equipment. For properties large or small, 'fypical fl.ow of work and of information in transit mainte-
• Too little service capacity limits daily vehicle avail- nance is shown in Figure 2. In this simplified diagram, the basic
abilities-an immediate effect; functional areas are shown as rectangles with flows of equip-
• Neglecting periodic J/M cuts vehicle life and availability ment, materials, and information indicated by appropriate ar-
and increases road calls--deferring but increasing expendi- rows. Key, minute-to-minute decision points and management
tures; and actions are shown as circles. In some way, all these actions and
• Poor-quality or slow repair work increases road calls and functions occur in even the smallest transit organizations. The
can steadily reduce availability, slowing transit services. features that tend to vary with the scope of transit operations
are
Problems with vehicle life and availability rates directly trans-
late into the need to expend scarce capital to replace or increase • The degree to which responsibilities for more than one
the size of the trai1Sit fie.et. Road calls are, of course, a. major function arc cvriSolidatcd in individual managers; and
transportation service quality issue. • The extent to which some or all of the functions are
Purdy and Wiegmann 3

SERVICE
AllD
CLEAi
VEHICLE. MATERIALS INFORMATION
- - - • INFORMATION

D FUNCTIONAL AREA

READY ll•E 0 ACTION OR EVENT

D PLAN POLICY

FIGURE 2 Typical work How for maintenance functions.

contracted or performed outside the direct supervision of the the key authorization and control document. Preparation of the
transit provider. repair order authorizes activity and provides planning infonna-
tion in the repair bays, the parts supply function, and the
As buses pull in after completing operations, one of three component and specialty shops (body and paint, upholstery,
directions can be taken in the work flow, as follows: etc.), if necessary.
The repair order, driver's defect reports, preventive mainte-
• If a driver reports a defect needing immediate repair, the nance schedule, I/M reports, and road call repons form the
vehicle queues for repair by the preparation of a repair order; basis of most production control and performance measure-
• If the preventive maintenance plan or policy calls for I/M ment systems in transit. Most other information on parts inven-
at the time, the vehicles is routed to the I/M function queue; tory, vehicle histories, fleet condition, and trends are keyed or
and reconciled to these reports.
• If neither of the preceding conditions holds, the vehicle is The typical work flow is presented as a guide and reminder
routed through the service-and-clean function. lo transiL managers thar each of the ba ic functions and pro-
cesses shown should be evaluated, allocated proper resources,
Driver's defect reports, I/M, and road calls can all result in and monitored, whether or not lhese functions have separate
identification of a needed repair. In this case, a repair order is organizational entities.
4 TRANSPORTATION RESEARCH RECORD 1140

RESEARCH APPROACH California, are easily used by transit managers anywhere in the
country, because cost relationships and proportional distribu-
The purposes of the research effort presented in this paper were tions are identified.
to assess the maintenance information problem, to provide
materials, and to aid transit maintenance managers. Its objec- MAINTENANCE SHARE OF TOTAL
tives were to OPERATING EXPENSE
• Study and report on maintenance cost information col- Maintenance costs are well worth careful attention in budgeting
lected and monitored by transit operators in California; transportation services. In fleets of fewer than 25 vehicles,
• Inform managers of and sensitize them to the significance maintenance costs are almost always in the hundreds of thou-
of maintenance costs; and sands of dollars; in larger fleets, costs are usually in the mil-
• Develop rules of thumb that managers can utilize in de- lions of dollars. Maintenance also makes up a large slice of
veloping and structuring an effective maintenance program. total costs and is a good target for cost improvement effort'!.
The general distribution of costs found among transit providers
The study was conducted in two phases during the fall of 1985
in California is shown in Figure 3 for two broad categories. In
and early 1986.
both cases, the operating budgets (including drivers dis-
patchers, running costs, etc.) fall in a narrow band at about 60
STUDY PERFORMANCE percent. The remaining budgets are divided between
Phase 1 of the study included several activities focused on • Costs clearly identified by the organizations as mainte-
obtaining the participation of California transit organizations nance--service, l/M, and repair; and
that provide motor buses and demand responsive transit. At the
onset of the study, 501 organizations were canvassed for basic UNDER 100 VEHICLES
budget data and fleet composition. From the returned question-
naires, 68 transit properties were selected for comprehensive
cost element and maintenance function expense identification
based on availability of cost data and minimal use of mainte-
nance contract service.
A ftirther screening conducted through a telephone interview
produced 28 transit properties for participation in the final on-
site data collection effort. The purpose of the final effort was to
develop cost element and maintenance function expense dis- OPEllATIOIS
tributions and patterns. Data from some transit properties were 80,,.
not included in the distributions due to the following factors:
inadequate cost accounting, unavailability of staff to assist
project team members, and difficulties in meeting project
schedule requirements.
Products of the Phase 1 effort were focused on quantifying
cost element relationships and functional area cost distribu-
tions. The product'! included

• Total cost distribution by fleet size into operating budgets,

maintenance budgets, and general administration budgets; 100 VEHICLES OR MORE
• Maintenance cost distribution by fleet size into cost ele-
ments that included direct labor, fringe benefits, overhead,
maintenance administration, and material and supply expense;
and
• Maintenance cost distribution by fleet size into function
areas that included servicing, l/M, running repair, corrective MAllTEIAICE
20-lft
maintenance, wheelchair system repair, and road call expense.

Phase 2 of the study synthesized maintenance cost and pro- OPHATIOll

gram guidelines to assist managers in program development.
Maintenance cost guidelines were developed following basic '""
transit cost allocation techniques and cost building meth-
odologies based on cost elements. The cost allocation and
estimating methodologies were calibrated for use by California
properties based on cost trends and patterns identified in Phase
1. Maintenance planning and management guidelines were
developed to focus and aid managers in establishing and eval-
uating the programs. The materials, though intended for use in FIGURE 3 Typical budget distributions.
Purdy and Wiegmann 5

• Costs for administrative functions including general man- specific assumptions for developing the material for estimating
agement, legal, marketing, and planning. total maintenance cost are presented.
In general, cost rates (e.g., cost per vehicle) are expected to
For properties operating fewer than 100 vehicles, costs ac-
increase as fleet size becomes larger. As fleet size increases,
counted for (and specifically identified) as maintenance costs
transit properties tend to use standard (40-ft) transit buses for
typically amounted to between 15 and 20 percent. The remain-
the bulk of their fleet, whereas small properties use a mix of
ing nonoperations costs are identified as administrative and as
small (30-ft) buses, modified vans, and other specialty vehicles
other. For properties with 100 or more vehicles, operating costs
average about 60 percent of the total, but a large proportion of to provide transportation service. Larger vehicles typicaily
budget (20 to 30 percent) can be specifically attributed to have greater maintenance requirements due to their heavier
maintenance. Many factors dramatically influence maintenance weight and the manner in which they are deployed.
costs; those factors must be considered on a case-by-case basis Geographic location also influences cost rates in California
as specific transit properties are addressed because the major urban centers (e.g., San Diego, San Fran-
The tendency for larger organizations to identify a larger cisco, and Los Angeles) have some of the highest cost-of-living
portion of costs as maintenance may well be due to the scale rates in the country. Larger properties in California tend to be
and specialization of activities. located in regions with higher cost-of-living rates (i.e., for
salaries, wages, and rents), causing fringe benefit and overhead
• Larger organizations are more likely to assign and fully expenses to escalate as competition for skilled labor is encoun-
dedicate management personnel to purely maintenance tered and adequately sized facility sites compete with other
functions. potential land use.
• Costs of all kinds tend to be accounted for in greater detail For the same reason, salaries and wage rates increase as the
and specificity in larger organizations, permitting clearer defi- property's size increases. However, numerous small transit
nition by function. properties are also located in areas with high cost (in wage
• Systematic preventive maintenance programs are more rates) relative to small properties operating in more rural en-
common and elaborate in the larger properties because the
vironments. For these reasons, typical wage rates for various
fleets are too large for a diagnostic response approach in which
property sizes and locations were developed for estimating
knowing when maintenance is needed is based on observation
total maintenance costs. Typical wage rates such as the follow-
and judgment.
ing were used to determine direct labor costs.
• Information systems, work order control, and other
monitoring and records needs tend to increase with scale of
operations. Typical Wage Rates ($/hr)
Mechanics Servicers
Notwithstanding the variation in budget proportions that can be Property Size
expected over a spectrum of transit system sizes, the most (no. of vehicles) Low High Low High
powerful factors that influence costs are as follows (in order of 1-9 9.00 12.00 5.50 8.50
impact): 10-24 7.00 12.00 5.50 8.00
25-99 11.00 13.00 7.50 8.50
• Total operating miles per year, 100+ 11.30 15.80 8.50 12.50
• Number of units operated, and
• Prevailing wage and cost structure in a locality.
Small transit properties, with 1 to 9 vehicles, tend to have
As will be shown in the next section, these factors (in the order higher wage rates than properties with 10 to 25 vehicles. Small
shown) far outweigh other maintenance planning considera- transit properties operating in low-cost rural areas and in small-
tions. Any one of the factors can, by itself, change the order of employment markets often must offer higher wages for skilled
magnitude of a maintenance budget estimate if all other factors diesel mechanics because these regions tend not to need skilled
remain constant. diesel mechanics beyond the transit property itself. In high-cost
areas, smaH operations musl compete with several organiza-
DEVELOPING BUDGET COST ESTIMATES: tions such as other transit properties and alternative businesses
BASIC ASSUMPTIONS to attract relatively unskilled bus servicers and washers. The
competition tends to increase wages most significantly for this
Estimation of a total maintenance budget and costs depends on
category.
a host of variables that are fleet and property specific. Man-
agers should examine the assumptions and generalizations un- In the following table, representative fringe benefit and over-
derlying the development of the guidelines in order lo interprel head factors are presented as percentages of direct labor
and apply the guidelines in specific operating and maintenance expense.
environments. When significant discrepancies occur between
the actual costs and those identified by the guidelines, the cause Fleet Size (no. of vehicles)
of the discrepancy should be investigated. The investigation Cost Element 1-9 1()-24 25-99 100+
should explore the assumptions underlying the guidelines and
examine areas where productivity and efficiencies can be Fringe benefit factor 0.30 0.30 0.30 0.45
achieved. Overhead factor 0.15 0.15 0.15 0.20
Maintenance administration ($/
In this section the factors and trends are discussed and veh) 2,000 5,000 5,000 5,000
6 TRANSPORTATION RESEARCH RECORD 1140

800

500

400

JOO

2.00

100

~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1500
A•IUAl nm VEHICLE •El IOOOll

FIGURE 4 Total maintenance costs for fleets of 1 to 25 vehicles In high-cost area.

J.O

IUD
2.5

c;;
~
i 2.0
~

In
B
11.5 NUM8Ell OF YEHICUS
=
I
;!
Ii! 1.0

.5

~ u ~ ~ u u " u " ~
AHUAl flEET VEHICLE lllllES IMllllD•SI
FIGURE 5 Total maintenance costs for fleets of 25 to 100 vehicles in
high-cost area.

The table also presents estimates of approximate maintenance TOTAL MAINTENANCE COST ESTIMATE
and administrative costs per vehicle. Generally, the cost factors
provided in the exhibit are shown to escalate as fleet sizes Total maintenance cost curves were developed as a function of
increase. The forces bP...hi _d t ~ e:>t;alation include geographic the annual fleet vehicle miles and total fleet size. Traditional
location and fleet characteristic differences between small and transit cost allocation models typically use these two variables
large properties. as well as vehicle operating hours. However, vehicle operating
Purdy and Wiegmann 7

13 The exhibits correspond to fleet size groupings of 1 to 25

vehicles, 25 to 100 vehicles, and 100 or more vehicles. Cost
12
curves for low-wage cost areas are provided in Figures 7-9 for
11
the same fleet size groupings. The cost of fuel is not included in
total maintenance cost for any set of curves.
10 On these charts as fleet size becomes larger, the annual fleet
mileage appears more important in determining maintenance
cost Thal is, the range of total maintenance cost for a given
fleet size becomes larger as annual fleet mileage increases. This
trend is explained by a tendency toward increased vehicle
utilization rates; therefore, maintenance requirements increase
as more inspections are performed, and components reach
maximum service lives more quickly.
II UMBER
OF VEHICLES For small fleets (1 to 25 vehicles), the number of vehicles
tends to be the predominant factor in determining maintenance
300
cost. For these fleets, the maintenance labor requirements are
generated primarily by fueling and other routine service ac-
tivities that are controlled by the number of vehicles used in a
J 200//
day.
Managers of transit properties approaching a fleet size of 100
100/ vehicles should use the charts with caution because there are
some discontinuities at the 100-vehicle fleet size. For fleets of
about 100 vehicles that operate in a major urbanized area,
10 ~ ~ ~ ~ ro n managers should use the charts for 100 or more vehicles. These
AllllUAI. FLEET VEHICU Mii.ES •UOHJ charts reflect higher cost-of-living rates and other economic
FIGURE 6 Total maintenance costs for Oeets of 100 or factors associated with the major urbanized regions of
more vehicles in high-cost area. California.
Examples of the use of these charts can be shown in Figure
hours are primarily the driving factors behind operating costs, 4.
whereas vehicle miles and fleet size are primarily drivers of
maintenance cost and fixed costs (e.g., general and administra- 1. A motor bus operator with a fleet of 16 buses operating
tive costs). about 400,000 veh-mi/year in a high-cost area checks for an
Total maintenance cost curves in Figures 4-6 reflect estima- appropriate budget order of magnitude. The operator locates
tion of costs based on an assumed typical high-wage cost area. 400,000 mi on the lower axis of Figure 9 and plots vertically to

1000

soo

s
Q
Q
~

t; 25
400
B
•l!l
..
•...c
;• 300

m
200

•uma Of VllllCUI
100

0'-............~..__~.._~..__~.._~._~..._~..._~..._~..._~~~~~~~~_...J
~~ ~ ~ ~ ~ ~ ~ m m ~ 1500
AHUAI. FLEET VEHIClE .US IOOllll

FIGURE 7 Total maintenance costs for Oeets of 1 to 25 vehicles In low-cost area.

 3.0

2.5 100
u;
•
0

i
~ 2.0
!;;
0
u

ii
~
•..... 1.5
i
m NU.ER OF VENICUS
1D

D.S 1.0 1.S 2.0 2.5 3.0 3.5 4.0 4.5 S.D
AHUAL FlEET VEHll.CLE MES .UOISl

FIGURE 8 Total maintenance costs for Deets or 25 to 100

vehicles In low-cost area.

13
500
12

11

10

lllMUI Of VfHICl.ES

l 20Qr/ 100

100/

0 I 2 4 B 10 12 14 II 11 20 n 24 28
AllllAL FUn VEHICU 11111 ES lllllLLIOISI

FIGURE 9 Total maintenance costs for fleets of 100 or more vehicles In

low-cost area.
Purdy and Wiegmann 9

a point on the 18-vehicle line. The overall $200,000 cost repair of this equipment is performed in connection with the
estimate is read on the left axis level with the point plotted. road calls.
2. An operator of 20 buses in a high-cost area with an
annual maintenance cost of $300,000 wants to compare his Total Direct Labor Proportion of
program with typical expectations. The operator locates Maintenance Cost
$300,000 on the left axis and plots horizontally to the 20-bus
fleet line. The operator reads about 725,000 veh-mi/year on the Estimates of the percentage of direct labor to maintenance costs
lower axis directly below the point. If the operator is operating are provided in Figures 11-13. Again, the charts correspond to
significantly less total mileage, yet sustaining $300,000 in fleet sizes of 1 to 25 vehicles, 25 to 100 vehicles, and 100
maintenance costs annually, he should examine his program to vehicles or more. The charts show that direct labor costs tend to
find the reason for the departure, highlighting either a problem be more volatile for small transit properties as the number of
or a logical explanation of the difference. vehicle-miles increases than they are for large transit proper-
ties. As fleet size increases, direct labor costs represent a
smaller percentage of total cost and the percentage range de-
BUDGETING THE COST ELEMENTS creases, reflecting less sensitivity to incremental maintenance
needs.
The development of maintenance budget estimates relies on the
identification and allocation of expenses to five basic cost Direct Labor Budget by Functional Area
elements as shown in Figure 10. Each cost element can be
further segmented to provide increasing levels of detail. Managers are advised to budget direct labor costs by functional
However, for general budget guideline purposes, it is appropri- area to account for differential wage rates and staff specializa-
ate to segment the direct labor cost element into three basic tion. Disaggregation between repair activities and l/M ac-
functional areas, and to divide material and supply costs into tivities should be made because mechanics performing preven-
consumable and nonconsumable categories. As the exhibit tive maintenance activities are typically paid less than
shows, some organizations may further disaggregate repair mechanics responsible for component overhauls and rebuilds.
labor into four additional categories--running repair, correc- Servicing labor cost should also be separated because person-
tive maintenance, wheelchair equipment repair, and road calls. nel responsible for fueling, washing, and cleaning vehicles are
However, even in larger organizations, the necessary distinc- typically the lowest paid of the maintenance labor force.
tions are too fine or data quality is too low to correctly allocate Figures 14-16 show charts for estimating the direct labor
and monitor to this level. In fact, a good example of this percentage of total maintenance costs for repair activities ac-
problem is in wheelchair equipment repair; many organizations cording to different fleet size groups. Figures 17-19 show
report wheelchair-related road calls are so frequent that most charts for estimating inspection labor costs.

TOTAL TRA,,SIT
PROPERTY COST
I

ADMlllSTllATIOI MAlllTEIAllCE OPERATIH

COST COST COST

I I I

I I
lllATEllAl

I
FRllGE
IEHflTS

I
DIRECT
lAlllll

I
lllAllTHHCE
AlllllllSTllATIOI

I
•
SUl'l'\Y
I
lllAllTHAICE
OYHIMEAD
} COST
ElEMEllTS

I I

I
SIRVICllG
LABOR

I
11•
LAIOl

I
REl'AI•
LAIDll

. I
COISUMAIU

I
101,COll'*AIU
} FUICTIOllAl
AREAS

•·········•···•············••··•···•······•
o
•
- - - • • J. - • • • - I .------'------. -----J------ -----..... ----
• •
1 WllHICMAlll I
1
RCMDCAll
1
RUl-
RIH•
I COllllfCTIYI
llllllTHAICf' '
sun• '
l
·-----------·
Rfl'All
t I
1• 111111n
I

} SUB fUllCTlOIS

FIGURE 10 Maintenance cost disaggregation.

 45

NUMBER OF VEHICLES
40
25

.
ti
...
l:j
J5

..••...
I

I
m JO
l!;
,,.

25

20""-............
~.._~.._~.__~.__~.._~.._ ............
~ ............
---~~~~~~~~_..

~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

ANNUAi. VElllCLE MIUS

FIGURE 11 Total direct labor cost percentage of total maintenance costs for
fteets of 1 to 25 vehicles.

40

llUlll9£R OF VEHICLES

100
25

zo.._..............................
~__.~__.~_..~ .... .... ~ ~--.~--.~__,

.5 u u z.o 2.s 3.o 3.s 4.0 u s.a

AOIJAL VEHICLE MILES IMllllOllSI

FIGURE 12 Total direct labor cost percentage or total

maintenance costs for Heets of 25 to 100 vehicles.
 40

§ 35 llUMllER OF VEHICLES

L~·
500

:!!
it

25

20---------------------------...
1 2 l 4 & a 1 1 s mu u n ............................
n g__.w..............................
~ u n n UH______,
~ ~ ~

ANNUAL VEHICLE MILES IMM.LIOllSI

FIGURE 13 Total direct labor cost percentage of total maintenance costs

for fleets of 100 or more vehicles.

JO

lllUMllER OF VEltlCLES
Iii
8
10 12 14 18 II 20 25
~ Z5

a...
;•
4l
~20
,.
0

IS

10 '--'su......10~0--~20-o--~Jo-o--~40~0--~so~o--~&o-o~~,o-o~a•oo---9•00---10•~---,•10-a~1•200---13•~---140ll"'-~1soa
AllllUAL FLEET VEllCLE MES

FIGURE 14 Repair direct labor cost percentage of total maintenance costs for
fleets of 1 to 25 vehicles.
 JO

Nl*IER Of VElllCUS

IDO

15

10 .............
~__.~ ......~ .......
~ .........
~...._~..._~..._~.._ __..___.
.5 w u u u ll u u u u u
AlllUAL Flfn VEHICLE 1111.ES .WOISI

FIGURE 15 Repair direct labor cost percentage of total

maintenance costs for fleets of total maintenance costs for
fleets of 25 to 100 vehicles.

30

NUMBER OF VEHICLES

100 200 JOO •OD 500

15

,--s_...1...._1_1......,1......10~~~~-1·5~~~~-20~~~~--25
10 ._.1.._.2_.,1.....
AlllUMl FLEET VEHICLE 1111.ES MWOHl

FIGURE 16 Repair direct labor cost percentage of total

maintenance costs for fleets of 100 or more vehicles.
Purdy and Wiegmann 13

10

9 NUMBER OF VEHICLES

• 10 12 14 11 11 20 2S

ti
B
a......
;
..m...
#-
4

~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1500

AHl.IAL VEHIClE Ml.ES 1001111

FIGURE 17 Inspection direct labor cost percentage of total maintenance

costs for fleets of 1 to 25 vehicles.

10

9
2S ,30

• llUMIEll OF VEHICUS

II •
Ill
#.
•

AHUAI. FLEET VEHICl.E •LES •UOllSl

FIGURE 18 Inspection direct labor cost percentage of
total maintenance costs for fleets of 25 to 100 vehicles.
14 TRANSPORTATION RESEARCH RECORD 1140

10

lllUMIER OF VEHICLES

100 200 300 400 500

~
s

012345 10 15 20 25

AlllllUAL FLEET VEHICLE lllHlES

FIGURE 19 Inspection direct labor cost percentage of total maintenance

costs for fleets of 100 or more vehicles.

Finally, Figures 20-22 show charts for estimating servicing number of vehicles than by the number of vehicle-miles, ex-
labor costs as a percentage of total maintenance costs by fleet plaining the decreasing contribution of service labor to total
size group. direct labor cosr. As more vehicles are put into service, more
Some general trends and principles can be observed in the labor is needed for servicing when vehicle mileage remains
charts. Servicing labor cost is driven more strongly by the constant. This trend shows that the incremental time necessary

10

4 10 12 14 11 11 20
lllUMllER OF VEHICLES

so 100 200 300 400 500 800 100 800 100 1000 noa 1200 1311

AllllllUAL FLEET VEHICLE MILES 1001111

FIGURE 20 Servicing direct labor cost percentage of total maintenance

costs for fleets of 1 to 25 vehicles.
Purdy and Wiegmann 15

10

...
0
#-

NUMBER OF VEHll.CES
100

AINUAL FLEET VEHIClE MILES llllWDHI

FIGURE 21 Servicing direct labor cost percentage of

total maintenance costs for fleets of 25 to 100 vehicles.

to service buses with high daily mileage versus buses with low Fringe Benefit Expense
daily mileage is considerably less than the Lime required to
retrieve buses from service queues, fuel and service the buses, Fringe benefit expenses, as a percentage of direct labor, gener-
and park the buses on the ready line. Inspection and repair ally increase with property size starting from a typical low of
labor follows an opposite trend. As vehicle mileage rises, direct approximately 13 percent of total direct labor cost for proper-
labor for these functional areas increases, contributing to the ties with fleet size of under 10 vehicles to a high of approx-
decreasing percentage of service labor for total costs. imately 59 percent of direct labor cosl for fleets of 100 vehicles

NUMBER OF VEHll.CES
10
100 200 lOO 400 500

ti
0
...
u
u
7

:!
~
,_
"'j
m
... 4 100 zoo
0
;F-

1 2 3 • 5 10 15 20 25

AllflUAl FLEET VEHIQ.E MILES lMIWOflSl

FIGURE 22 Servicing direct labor cost percentage of total
maintenance costs for fleets of 100 or more vehicles.
16 TRANSPORTATION RESEARCH RECORD 1140

or more. Study findings by fleet size and high- versus low-cost maintenance director, manager, engineer, superintendents, su-
areas in California are shown in the following table. Obviously, pervisors, nonworking foreman, secretaries, clerks, and other
the fringe benefit expense for an individual property is highly staff who do not directly maintain the fleet.
variable and subject to many local considerations. Maintenance administration expense is particularly difficult
to identify at small properties where one person may perform
Expense(% of labor) by
Fleet Size the duties of director of operations, director of maintenance,
and director of personnel. In larger organizations, particular
Level 1-9 10-24 25-99 100+
Low 0.13 0.34 0.26 0.45 administrative personnel are more often dedicated to support-
Average 0.25 0.37 0.34 0.52 ing and managing the maintenance functions. Not only does
High 0.38 0.40 0.43 0.59 property size influence administrative costs, but the mainte-
nance phi losophy also influences administrative costs. Transil
The trend of increasing fringe benefit expenses with increas-
properties sometimes experience increased administrative ex -
ing fleet size probably reflects increased competition for skilled
pense and reduced direct labor expense by relying on contract
personnel in competitive employment market areas. As a me-
maintenance service.
chanic's skill level increases, compensation (including fringe
Maintenance administration and support expense found for
benefits) must be competitive with other organizations re-
California operators is shown in the following table. The data
quiring skilled diesel mechanics. Competitors for skilled me-
indicate that a significant difference occurs between fleets of
chanics include municipal organizations, trucking companies,
less than 10 buses and fleets with more than 10 buses.
construction companies, and somi:: i::uergy-related companies
that rely on diesel equipment to operate pumps and remote
power-generating facilities. Expense ($/veh) by Fleet
Size
Maintenance Overhead Expense Level 1-9 10-24 25-99 JOO+

Overhead expense incurred as a function of maintenance ac- Low 600 1,600 2,300 900
tivities is frequently not allocated to the maintenance depart- Average 1,900 5,100 5,100 5,100
High 6,100 6,600 7,800 7,800
ment. However, to reflect true costs, managers should include
overhead expense.
Overhead is conventionally allocated as a percentage of total The relatively constant average administrative expense per
direct labor. Overhead varies significantly among properties of vehicle reflects the increased productivity and utilization of
similar size. Overhead factors as a percentage of direct labor maintenance administrative staff as fleet size exceeds 10 buses.
for California properties appear to increase as fleets become Intuitively, maintenance administration expenses should de-
larger, as shown in the following table. crease on a per-vehicle basis as fleet size increases. However,
each vehicle generates a constant flow of maintenance-related
Expense(% of labor) by information regardless of service levels and fleet deployment.
Fleet Size Even though more streamlined systems are often used, addi-
Level 1-9 10-24 25-99 100+ tional administrative activities tend to be needed as the overall
Low 0.14 0.06 0.13 operation becomes more complex. The two trends appear to be
Average 0.39 0.17 0.14 0.22
offsetting.
High 0.64 0.22 0.31

More important, the research indicated that overhead expense Material-and-Supply Expense
data were typically not available or not allocated to transit
maintenance activities. Maintenance facilities were frequently Material-and-supply expense can be allocated to two catego-
owned by municipalities and serviced both the transit fleet and ries, consumable and nonconsumable expense. Consumable
other municipal vehicles. This shared-facility use made over- expense includes fuel cost, oil cost, and the cost of other liquids
head expense identification difficult at even the best-managed used to maintain and operate vehicles. Frequently, fuel costs
small transit authorities. are not assigned to the maintenance department because the
The apparent higher overhead factor for large properties of fuel costs are driven primarily by service levels (i.e., the num-
100 or more vehicles can be attributed to several factors. ber of vehicle-miles). Maintenance managers should be aware
Facilities for these operations typically are dedicated to transit. of fuel costs and general trends in fuel costs because overall
Furthermore, larger properties carry specialized equipment and vehicle condition, frequency of tune-ups, and other factors can
facilities, which translates into higher overhead expense. increase fuel mileage.
Nonconsumable expense is associated with the cost of parts,
Maintenance Administration Expense components, and other items used primarily in repair activities,
although some nonconsumable expense is attributed to I/M
Maintenance administration activities performed at a transit activities (e.g., belts and hoses). Nonconsumable expense is
property are difficult to allocate to specific functional areas driven by the amount of repair activity. Repair activity is
becaus~ an ad · 's!r~tnr's time is spent on a variety of ac- primarily influenced by the number of vehicle-miles, type of
tivities spanning several functional areas. Maintenance person- vehicle, age of vehicle, and the operating environment (e.g., the
nel accounted for in this expense category usually include the terrain, passenger levels, and temperature).
Purdy and Wiegmann 17

In California the following conswnable (including fuel) and of servicing and cleaning vehicles require as well as the amount
nonconswnable cost rates were found: of repair activity needed to replace worn seats, and so forth.
Inflation rates influence wage rates and the cost of materials
• For fleet size between l and 25 vehicles, a typical conswn-
and supplies.
able cost was $0.20/veh-mi; nonconswnable cost was $0.065/
There are several factors within a manager's span of control
veh-rni.
• For fleet size of 25 vehicles or more, conswnable cost was that influence maintenance costs, especially in relation to oper-
typically $0.27/veh-mi; nonconswnable cost was $0.180/veh- ating costs and overall administrative costs.
mi. The cost relationships presented in this paper are applicable
to transit operations located across the country. Though total
These cost rates will fluctuate from property to property. There- maintenance costs in other areas may differ from those found in
fore, managers should strive to develop their own conswnable California, their contributions to total operating expense are not
and nonconswnable cost rates. The cost rates are significantly expected to vary significantly. Likewise, because no deviation
influenced by the type of vehicles operated, vehicle age, ter- between low- and high-cost areas in California was identified,
rain, and other factors. the contributions of repair, inspection, and servicing labor to
total maintenance costs are not anticipated to vary significantly.
IMPLICATIONS FOR MAINTENANCE
MANAGERS
To plan and control maintenance costs, managers must know ACKNOWLEDGMENTS
what cost components can be influenced, and they must use
appropriate tools, approaches, and strategies. The cost relation- The research report in this paper was conducted under a study
ships discussed in this paper provide managers a starting point cosponsored by the Division of Mass Transportation, Califor-
for the assessment of their maintenance cost structure. nia Department of Transportation (Caltrans), and UMTA. The
Maintenance costs are influenced by factors internal and original research effort produced three reports available
external to a maintenance manager's span of control and often through Caltrans. The success of the research effort can be
outside the overall transit organization. attributed to the eager participation of the California transit
Economic conditions such as employment levels and infla- operators in providing the cost and management information
tion rate are examples of external factors that affect the amount necessary to conduct the analyses.