Unfortunately for the school bus industry’s public and private future, regulatory mandates and the current inflation driven economic environment will continue to drive up the cost of equipment as well as maintenance and repairs. These two factors are causing fleet managers to take a hard look at their school buses this year and what it costs to operate them. Operating budgets are coming under fire for exceeding projections that were made during the past COVID-19 impacted period and the recent inflation trend, while also experiencing the worst ever driver and technician shortage.
All this is going on as our industry is facing a monumental switch in what will power the near-future school bus. Michael Warner, the associate director of fleet management for Cobb County School District in Georgia recently said during a recent School Transportation Nation Podcast, “Not If electric power but when.” He went on to say that the complete cost of this zero-emission technological and paradigm shift is yet to be determined.
Let’s review a couple of noteworthy points relative to the potential growth of future electric power school buses. The U.S. Environmental Protection Agency offers this as background, “The Infrastructure Investment and Jobs Act, Public Law 117-58 (the Bipartisan Infrastructure Law or BIL) amends the Clean School Bus Program under Section 741 of the Energy Policy Act of 2005 (42 U.S.C. 16091) and provides $5 billion for the replacement of existing school buses with clean and zero-emission (ZE) school buses. For each fiscal year between 2022 and 2026, $500 million is available to fund zero-emission and clean school buses, and $500 million is available to fund only zero-emission school buses. For the 2022 CSB Rebates, for which applications closed on Aug. 19, EPA offered $500 million, split in two equal pools of $250 million for clean school buses and ZE school buses. Funds are subject to availability and total awards may be higher or lower than the anticipated funds offered. Funding will not be provided for administrative expenses. EPA reserves the right to partially fund applications, reject all applications and make no selections under the program, or to make fewer selections than anticipated.”
EPA is expected to announce another program this fall to award the remaining $500 million for the current fiscal year. Most electric powered purchases taking place are being supported by grants on the federal or state level. It should be noted that these grants are limit-ed in significantly impacting the total cost of our industry transitioning to total zero emission electric.
As an example, the new $500 million of federal support solely for zero-emissions school bus purchases for 2022, if used to fund the total cost of the bus, may be enough to cover only about 1,300 electric buses at $375,000 each and some charging infrastructure at today’s pricing. But prices are increasing by the day, thanks to supply shortages mostly tied to the lithium need for batteries. Using todays cost estimates over the five years of the anticipated grant support, would provide some 6,000 electric buses of an approximately 500,000 North American school buses, under that grant mechanism. If the total grant was to only go toward electric buses, then the amount would be approximately 2,600 a year and 13,000 total over five years respectively.Achieving 100 percent zero emissions will require everyone to ramp up their procurement budget to fund zero emission replacements in the future, possibly without grants to help pay for them. The projected maintenance savings of electric versus diesel will have to be rather significant to cover the bus cost, charging infrastructure and facility improvements. Work is ongoing in determining the overall cost benefit of zero emission buses, early estimates vary with up to 60 percent reduction in maintenance expense.
However, the following is not voodoo math. At current replacement levels our industry requires approximately 35,000 replacements per year. At least $500 million per year for electric and the other $500 million per year over five years for low-emission buses is simply not enough federal support money to cover the shift to 100-percent electric power. If clean air regulators prevail in man-dating zero-emission school buses, then budgets and transportation bids will have to have completely different cost and business models.
Impact on Legacy Fleet:
Not only new buses but everything costs more, which further impacts the legacy fleet, parts, tires, fuel, and service requirements which are all driving up the cost of school bus maintenance and repairs. And adding further heartache to operations is that current non-electric re-placement vehicle orders and final pricing upon delivery are proving difficult to predict due to OEM supply issues which are often out of their control, adding surcharges and price increases not forecasted.Additionally, due to transport delays in the supply chain network, part shortages are becoming the new normal, especially the many parts manufactured abroad. This is contributing to extended repair times or side-lining equipment stretching the ability of the shops to maintain fleet availability with current spare ratios, typically 10 percent. To add more bad news, there was already a shortage of skilled technicians prior to the pandemic.
What can you do? Don’t panic. A part of the solution is simple. Accept the fact that you can only control your universe. Now is the perfect time to examine your operation and pay closer attention to part purchases as well as the policies, procedures and process (Three “P’s”) to maintain your fleet. Especially if you are faced with the challenge of extending the operating life of your legacy fleet, as you wait for the evolution of zero emission products and the subsequent economies of scale to lower the financial impact of future buses. In past articles I have written quite a bit on the value of having the three “P’s” in your shop culture to properly maintain your fleet. It would be informative for you to review those articles for understanding the return on investment in a structured maintenance program.
As a fleet manager, you are and will continue to be under a lot of pressure to make the right choices while making more purposeful decisions. The best way to do that is to identify your fleets most important key activities. One of the most important functions within today’s maintenance facility is the accurate measurement of key activities. Today we are inundated with hundreds of software solutions to assist managers in measuring fleet operations activity. No question that you should strive to implement a software solution to integrate with your district/company transportation departments systems. But first you must identify your most important vehicle operating metrics. Many of STNs advertiser partners offer excellent management solutions and can be found in the STN annual Buyers Guide.
I have seen operators with fleet management systems that generated over 100 reports. I asked who used them and who reviewed them. Answers varied but the burden of managing the data often resulted in the system overwhelming the users and subsequently was set-aside. To help manage the fleet I would focus on your solution, whether old or new, to provide at least the following metrics and be sure it is capable of integrating with the vehicle performance data collection device.
1. Miles traveled daily: To help stay on track with timely maintenance checks, and asset utilization. 2. Daily driver vehicle pre and post trip report: To keep the vehicle safe and in compliance. 3. Vehicle speed: Compliance and safety. 4. Vehicle OEM fault code alerts: To manage repair of critical bus systems 5. Fuel consumption: Tracking fuel consumption gives you insight to vehicle systems performance to MPG expectations and the performance of the driver. 6. Repair time: Measure productivity and help identify training and feedback. 7. Repair history: Life cycle cumulative cost of repairs. 8. Parts inventory: Knowing inventory levels helps plan for scheduled repairs.
Keep Technicians Happy:
Retain your technicians through incentives that don’t cost a lot of money, by comparison to poor fleet repair practice. Formalize a progressive training program and invest in training them, build a team environment and compensate them fairly with a suitable benefit package. According to countless surveys by STN, employees don’t jump ship only because of money. Get creative in this competitive labor market.
Editor’s Note: As reprinted in the October 2022 issue of School Transportation News.
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