How to Set a Fuel Strategy AEMP Takes

How to
Set a Fuel
>> PAGE 17
AEMP Takes
Safety Stand
Fleet Masters
Applications Drive
Tire Strategies
>> PAGE 22
>> PAGE 27
>> PAGE 31
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Komatsu CARE for Komatsu Tier 4 Interim models is a new, complimentary
maintenance program designed to lower your cost of ownership and improve
your bottom line. It provides factory-scheduled maintenance on the machines
for the first three years or 2,000 hours, whichever comes first. This includes
up to two exchange Komatsu Diesel Particulate Filters. Be sure to contact your
Komatsu distributor for all the details.
Once again, Komatsu leads the industry. No other construction equipment
manufacturer offers a complimentary maintenance program like this.
It’s what you’ve come to expect from the service experts at Komatsu.
Official Publication of the Association of Equipment Management Professionals
How to Set a Fuel Strategy
Fuel is a major expense, yet few
organizations manage it well.
AEMP Takes Safety Stand
Task force looks at ways to support
members’ effectiveness in
core competency.
Military Fleet Masters
The Air Force’s European
operations strive for economical,
efficient operations.
Applications Drive
Tire Strategies
Dealers provide input to help
optimize tire investment.
05 The Chairman’s Corner
07 AEMP News
>> 2012 Asset Management
Symposium Forward To The Future
>> It’s Time to Enter Fleet Masters
>> AEMP Foundation Announces 2012
Scholarship Recipients
>> AEMP’s New Lineup of Webinars To
Feature Hot Industry Topics, Live Q&A
>> Test for AEMP Certifications in October
>> Recognize Excellence on Your Team
>> AEMP 2012-2013 Board of Directors
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the information you need to maximize profits.
Let’s Work.
Having real-time information is crucial to your operation — like where your equipment is located,
when service is needed, and knowing your fleet is working at optimum performance. That’s why Volvo
Construction Equipment offers CareTrack, a telematic system that transmits machine data from the
jobsite to a website instantly via cell phone signal or satellite. CareTrack can maximize uptime, minimize
maintenance costs, reduce your fuel consumption, and more. It’s all part of our dedication to ensure your
crew is more productive and profitable every day.
Find out how CareTrack can maximize your profits at a Volvo dealer near you. Visit today.
Volvo Construction Equipment
04_0812EM_Volvo.indd 4
7/25/12 8:50 AM
As I write this, both my sons have just returned home from college for the
summer. For the next few months they will be working various jobs and
enjoying the time off from school. My wife and I will also enjoy a brief relief
from the expenses associated with their education (although the boys do
help). Education for our kids is rarely viewed so much as a cost as it is an
investment. Although we did not run an ROI or NPV analysis (maybe I
should) before supporting their college education, we fully supported their
decision to attend. We know no matter what they decide to do in life, their
time in college will enrich their lives through the education, experiences
and relationships. No financial analysis on the return is necessary.
All too often we either mix cost and investment together or discount what should be investments as
cost. I’m referring to our professional lives. How does your organization view their equipment
operations, as a cost or investment? If it is as a cost, then why even have it? Is it necessary to perform
whatever work or services the company or organization performs? Investments should be viewed as
something you expect more from than you put in, as I view my sons’ education. Cost is something
that may be necessary but not something you expect more out of than put in. So back to my
question: Is your equipment operation (including the assets) viewed as an investment or a cost?
Hopefully it is viewed as an investment and managed as any investment would be managed: to
get the most out of it as possible. It is the responsibility of the asset/equipment manager to
ensure the organization is as efficient as possible; and that the assets are highly utilized, well
maintained and disposed of in a timely fashion. Also, with good investment management, the ups
and downs of the organization must be reacted to. A good asset manager will constantly be
engaged with the needs and goals of the organization, making recommendations and decisions
and acting to ensure this investment continues to provide the value the organization expects. The
recent economy has tested many businesses and organizations, especially those dependent on
equipment. Those that had asset/equipment managers who were engaged, I expect, weathered
the economy much better than those that did not. Even worse were those who felt their saving
grace was to cut education and key personnel responsible for the management of their
investments. They surely fared worse.
Your companies’ equipment operation should be viewed as one of their highest return
investments. It is all of our responsibilities to make sure it is managed assertively, with the goal on
return, efficiency and value. Knowledge and experience are invaluable as the skillset required to
stay relevant as today’s equipment manager. AEMP realizes this and continues to offer education
and opportunities to us as professionals to enrich our careers.
Guy Gordon, CEM
Chairman of the Board and CEO
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7/25/12 12:29 PM
Introducing the Case F-Series, our first wheel loader engineered from front to
back specifically for quarry and aggregate applications. With their Case 6.7L
Tier 4 Interim engines, they meet EPA standards without making any
sacrifices in power or performance. In fact, we expect them to be not only the
most fuel-efficient machines in their class, but also the most powerful. And it
doesn’t end there. An all-new five-speed, lock-up transmission gives the
F-Series improved acceleration and faster cycle times. And with optional
intuitive joystick steering to reduce user fatigue, there won’t be anything left
to slow your operators down. Dig in at
* For commercial use only. Customer participation subject to credit qualification and approval by CNH Capital America LLC. See
your Case dealer for details and eligibility requirements. Ten percent minimum down payment is required. Offer good through
September 30, 2012 at participating Case dealers in the United States. Not all customers or applicants may qualify for this rate or
term. CNH Capital America LLC standard terms and conditions will apply. Taxes, freight, set-up, delivery, and additional options or
attachments not included in suggested retail price. Offer subject to change or cancellation without notice.
©2012 CNH America LLC. All rights reserved. Case is a registered trademark of CNH America LLC.
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7/25/12 8:57 AM
2012 Asset Management Symposium
Targets Issues Affecting the Future
Attendees can expect to
gain full insight into three
industry topics impacting the
future of asset management.
EMP’s 2012 Asset Management Symposium will
take place Oct. 30-31 in Louisville, Ky. This year’s
educational seminars focus on three of the hottest industry topics facing asset management: telematics, finances,
and Tier IV engines.
gration in their companies’ fleets.
To close the telematics session, all presenters will open
for an extended panel discussion and Q&A, providing an
opportunity for attendees to ask specific questions relating to telematics and their business.
Although telematics is a familiar concept, it remains one
of the most misunderstood in the industry. The symposium’s first half-day session will focus on unraveling the
mystery, beginning with the basic concept and information about the AEMP Telematic Standard. Telematic
solution providers such as Bill Purdie, president of
MobileNet, will discuss the latest industry advances. The
session will be capped off with a panel discussion on
practical solutions and integrations.
Telematics solution providers as well as fleet managers from both big and small fleets will offer insight into
how telematics has positively impacted their operations.
John Meese, senior director for Waste Management,
and Kerry Sudrla, equipment operations manager at
Kiewit Corp., will discuss the process of telematics inte-
How do you leverage your fleet knowledge and have a voice
in the decision-making process? The second half of the day
will outline some strategies to do just that. This finance
seminar will highlight the evaluations a CFO makes when
considering an equipment purchase, providing valuable
insight into the thought process and the information
needed in order to move forward with a purchase decision.
Three industry executives representing a rental company, a financial institution and a third-party company
will lead a panel discussion on the pros and cons of renting, leasing or buying equipment and the economic
impacts on each option. Along with Joe Dixon, senior
vice president for United Rentals, the executives will
bring a diverse and broad perspective to this evaluation
process and will answer direct questions in a panel format at the end of the session.
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Tier IV engines
The closing day of the symposium will separate
myths from reality on Tier IV emissions regulations.
Qualified industry dealers will discuss how Tier IV
affects their operations. Attendees will also gain a
thorough understanding of engine contaminants
through implementation and control initiatives from
a panel of professionals, including Eric Matthewson,
Caterpillar Tier IV dealer readiness expert.
To round out the Tier IV discussion, a panel of
end-users will discuss operational and maintenance
changes. These experienced end-users will share
their experiences of how the Tier IV maintenance
requirements have affected their fleets. Another
extended Q&A session will close the seminar.
Professional Certifications
In addition to educational seminars, AEMP’s
Professional Development Institute (PDI) will be
in session for those looking to prepare for one of
AEMP’s professional certifications: Certified
Equipment Manager (CEM), Equipment Manager
Specialist (EMS), or Certified Equipment Support
Professional (CESP). The certification exam date is
scheduled for Nov. 1. For more information on
certifications and the PDI, contact Jim Phillips,
vice president of educational services at
970.384.0510 ext. 202 or [email protected]
It’s never too early to start considering nominees for the
2013 Fleet Masters Award. Over the past 10 years, AEMP
and Construction Equipment Magazine have annually
recognized excellence in the equipment industry at the
Management Conference.
Presented to a winner from both the public and private
sector, the award acknowledges equipment professionals
who demonstrate excellence in meeting the unique challenges inherent to delivering cost-effective and cuttingedge management of mixed fleets of on-road and offroad equipment. The Fleet Masters award will be
presented at the 31st Management Conference & Annual
Meeting March 17-19 in Jacksonville, Fla., at a special
reception and dinner event sponsored by the Strategic
Alliance Partners.
Applications for the Fleet Masters Awards must be postmarked no later than Jan. 11, 2013. For more information,
please contact Claudine Wheeler at AEMP Headquarters,
The 2012 Fleet Masters recipients were the U.S. Air Force,
Europe and Waste Management.
There’s still time to take advantage of special
advanced pricing. Early Bird rates apply through
Sept. 1: $899 for members, $999 for nonmembers. Standard registration fees go into effect after
profession. Thanks to generous company and individual
Sept. 1, with registration rates of $995 for members and
donors, the AEMP Foundation is able to address the crit$1,150 for nonmembers. Those looking for more inforical technician shortage by assisting those who wish to
mation on registration may contact Cindy Challis Orr,
make a career in the heavy equipment industry.
CAE and chief administrative officer at 970.384.0510
ext. 203 or [email protected]
This year’s scholarship recipients are:
Visit for additional information on the 2012
• Jordan Bartels, Kingsford, Mich. Raised by a dad in
Asset Management Symposium, including session descripthe auto industry and a mom who holds a position as
tions, speaker handouts and the most up-to-date details.
a transportation and maintenance supervisor, Jordan’s
passion for mechanics began at a young age. Besides
being heavily involved with the high school soccer
AEMP Foundation Announces
team, Jordan also took part in Skills USA for two
2012 Scholarship Recipients
years for Auto Body and Auto Tech. Jordan is looking
forward to studying at the Universal Technical
The AEMP Foundation awarded three scholarships this
Institute in Glendale Heights, Ill.
year to students planning to enter the diesel technician
0812EM_front.indd 8
summer 2012
7/25/12 12:30 PM
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• Damion Dorsett, Howard, Ohio. Damion kept busy
in high school with his participation in wrestling and
football. He has been working part time as a farm
hand, doing field work and maintenance on farm
equipment. With the aid of the scholarship, Damion is
ready to study diesel technology full time at the
University of Northwestern Ohio in Lima, Ohio.
• John Kulsa, Beebe, Ariz. A four-year participant of
FFA, John has been given the Chapter Award, two
achievement awards and earned the highest score at
the Colt’s Classic 2012. John is also the captain of the
Agricultural Mechanics Team. John will be studying
diesel and heavy equipment at Oklahoma State
University Institute ofTechnology in Stillwater, Okla.
Applications, presented by Richard Hassebrock, field
engineer, Castrol Heavy Duty Lubricants
December: Finding Resources for Information and
Training, presented by Jason Ruggles, shop manager,
Traylor Bros.
To see the full lineup of webinars scheduled throughout the year, please visit
In addition to the new webinar series, AEMP’s original 17-week PDI webinar series is still available
through AEMP University. offers training
toward your CEM, EMS and CESP exam at this fall’s
Asset Management Symposium, or simply to expand
your knowledge.
AEMP’s New Lineup of
Webinars To Feature Hot
Industry Topics, Live Q&A
AEMP Certification Testing
To Take Place in October
Building on the success of this
year’s inaugural webinar series,
AEMP’s newest lineup of webinars kicked off this July.
There’s still plenty of time
to take advantage of this convenient, informative
offering from AEMP, as the series will continue
through June 2013.
A new topic will be offered every month, led by
some of the industry’s most knowledgeable experts
in asset management, with a live Q&A following
each session. Scheduled to take place on the second
Thursday of each month at 11 a.m (CST) and again
on the fourth Thursday at noon (CST), the webinars will dive into a new hot industry topic each
month, from oil and fuel analysis to social media to
the age-old question of rent, lease or purchase.
Here are details about this year’s topics:
August: Using Fuel Analysis As A Fleet Tool
(Diesel), presented by Ken Hill, CESP, VP Sales and
Marketing, WearCheck USA
September: Oil Analysis – Intermediate
Applications, presented by Richard Hassebrock,
field engineer, Castrol Heavy Duty Lubricants
October: Creating Learning Plans for Employees
(101), presented by John Jamison, Ph.D., CEO,
ImagiLearning, and Carl Porter, corporate business
manager, John Deere Corporate Business Division
November: Oil Analysis – Advanced
AEMP’s certification credentials showcase the specialized
skill sets needed by equipment industry professionals.
They are designed to enhance individual skill sets, to
provide an opportunity to exchange best practices and to
Innovative Mobile Apps
Fully-Integrated Construction
Apps That Handle Real Work
Time cards
Estimates & proposals
Change order estimates
Job site photos & notes
GPS location of trucks
Alerts, reports, & much more!
Designed for construction
Flexible technology
Constant internet not required
Integrates with accounting
for the
0812EM_front.indd 11
Construction Industry
7/25/12 12:32 PM
Commission members congratulate
the 2012 certified professionals at
the 30th Management Conference.
present new ideas and strategies unique to the equipment industry. Three credentials are available:
Certified Equipment Manager: The CEM credential
signifies advanced experience and knowledge in all areas
of fleet management. It is an attainable goal for equipment managers who want to be identified as exceptional.
Equipment Manager Specialist: New responsibilities, challenges and expectations arise as one progresses
in his or her career. To meet the need for professional
development at the management level, AEMP developed
the EMS. It is a recognized standard for developing the
qualifications of a person involved with an equipment
fleet in the first five years of career development.
Certified Equipment Support Professional: The
purpose of the CESP is to provide a high standard of
certification to a professional supplier who possesses a
depth of understanding of fleet management skills
and who demonstrates the ability to interact on a
professional level with all fleet-related professionals.
AEMP certified seven people at the 30th
Management Conference & Annual Meeting. Here
are the results from the March test:
2012 Certified Equipment Managers
• Ken Burke, CEM, Bechtel Equipment Operations
• Craig Boyles, CEM, U.S. Air Force
• Thomas Coleman, CEM, Waste Management
• Casey Dowling, CEM, Bechtel Equipment
• Steve Hudgins, CEM, Charah
• Greg Peet, CEM, Heavy Equipment Services
• Kevin Reimert, CEM, Schlouch
0812EM_front.indd 12
2012 Certified Equipment Support Professionals
• Colin Olsen, CESP, Caterpillar
2012 Equipment Manager Specialists
• Joe Kelso, EMS, Aegion Corp.
• Kenneth Lauer, EMS, Bechtel Equipment Operations
• Steve Lewis, EMS, Aegion Corp.
• James O’Brien, EMS, Aegion Corp.
The upcoming fall Asset Management Symposium in
Louisville, Ky., is the next opportunity to take the CEM
or CESP exam. The event takes place Oct. 30-31.
In 2013, the AEMP Foundation will recognize
public and private sector heavy equipment
technicians with the 24th annual Technician of
the Year award. The award is sponsored by the
Foundation and John Deere. The 2013 winners
will be honored at a luncheon at the 31st Annual
Management Conference March 17-19 in
Jacksonville, Fla. The award recognizes professionals who exhibit outstanding troubleshooting
and diagnostic capabilities as well as making
significant contributions to the equipment technician profession.
Applications for the Technician of the Year awards
must be postmarked no later than Jan. 11, 2013.
For more information, please contact Claudine
Wheeler at AEMP Headquarters, 970.384.0510.
summer 2012
7/25/12 12:34 PM
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AEMP 2012-2013 Board of Directors
Executive Committee
Guy Gordon, CEM
(Chairman and CEO)
Aegion Corp.
Chesterfield, Mo.
Bob Merritt, CEM
(Chairman Elect)
URS, Boise, Idaho
Patrick T. Crail, CEM
John R. Jurgensen Co.
Thad Pirtle
(Vice Chairman)
Traylor Bros, Evansville, Ind.
Dave Gorski, CEM
(Immediate Past
K-5 Construction Co.
Lemont, Ill.
Dixon Linklater
(Director of Strategic
Case Construction
Equipment, Racine, Wis.
Directors of
Designated Industries
Appointed Directors
Ed Gestido, CEM
(Director of Construction)
Gray & Sons,Timonium, Md.
Don Lubinsky, CEM
(Director of
PA Operation Lifesaver
Smyrna, Del.
Warren Schmidt, CEM
(Vice Chairman)
Flatiron, Longmont, Colo.
Don Gengelbach, CEM
(Director of Mining)
Mulzar Crushed Stone
Tell City, Ind.
J. Chris Ryan, CEM
(Vice Chairman)
Boh Bros. Construction Co.
New Orleans
John Shearer (Director
of Associates at Large)
James River Equipment
Ashland, Va.
Thomas Bucklar
Caterpillar, Peoria, Ill.
Peter Causer
Volvo, Asheville, N.C.
Tom Jackson
Equipment World
Tuscaloosa, Ala.
Michael Lamlech
International, Lisle, Ill.
Carl Porter
John Deere Construction
& Forestry, Granville, Ohio
Joe Phelan
Ritchie Bros, Newnan, Ga.
Alex Smith
Castrol, Wayne, N.J.
To apply for membership,
go to
Rod Sutton
Construction Equipment
Arlington Heights, Ill.
The subscription rate for
members is $80, which is
included in the
Association’s annual dues.
The U.S. subscription rate
for non-members is $150
for one year and $275 for
two years. Canadian subscribers add $5 per year;
all other non-U.S. subscribers add $10 per year.
Scott Walter
IronPlanet, Dublin, Ohio
Erik Wilde
Komatsu America, Rolling
Meadows, IL
Stan Orr, CAE
AEMP, Glenwood
Springs, Colo.
AEMP Headquarters
P. O. Box 1368
Glenwood Springs,
CO 81602
Phone: 970.384.0510
Fax: 970.384.0512
E-Mail: [email protected]
Send address changes
to: Association of
Equipment Management
P. O. Box 1368
Glenwood Springs,
CO 81602
Published by
Equipment magazine
*AEMP Member
0812EM_front.indd 15
7/25/12 12:35 PM
Hi, I’m Mike Rowe and questions like this keep me up at night. That’s why I teamed up with
Caterpillar. They understand the value of people like you - people who build our infrastructure.
They also understand the value of hard work and the importance of total support. Does
Caterpillar “get it”? No question about it.
If you’re ready to work, visit
©2010 Caterpillar All rights reserved. CAT, CATERPILLAR, their respective logos, “Caterpillar
Yellow,” the “Power Edge” trade dress as well as corporate and product identity used herein,
are trademarks of Caterpillar and may not be used without permission.
16_0812EM_Caterpillar.indd 16
7/25/12 9:26 AM
Fuel is a major
expense, yet few
manage it well.
ffective fuel management begins with purchase
negotiating and ends at the exhaust, according to
Greg Wyatt, commercial vehicle specialist with
PetroLiance LLC. Historically, fleet fuel management was a fairly straightforward undertaking, but since the
Environmental Protection Agency has ratcheted up its war
on pollution and green has become the favorite color of
causes, the delivery-to-exhaust trail has become more complicated, sprouting side paths that resemble a river’s tributaries. One detour from the norm leads to fuel price volatility
(see sidebar); another to advanced fuel and filtration technology; and yet another winds its way to multiple streams of
alternative fuels, all flowing into fleet inventory and all
requiring storage tanks to separate and protect each type.
For many operations, fuel is the second biggest expense
behind labor, Wyatt says, yet few businesses have a strategy
for managing that cost. “They are completely at the mercy
of market conditions,” he says. PetroLiance markets only
ultra-low sulfur diesel fuel (ULSD) in terminal areas east of
the Mississippi. It also operates seven fuel bulk tank facilities that store ULSD, gas/ethanol blends and biofuels.
The key elements of successful business are managing
risk and controlling as many factors as possible, Wyatt says.
0812EM_f1.indd 17
“In this case, risk means any factor that can significantly
impact the business viability and productivity,” he says.
Deciding to be proactive rather than reactive is the first
step in managing fuel costs. To achieve your goals, you
need to follow some basic rules, Wyatt says. First: These
tools are used to manage your fuel budget–never to anticipate the market. Second: Take what the market gives you.
Depending upon market conditions, the best tool may be
a fixed price, a cap or a collar, which is a contract that
allows prices to fluctuate between a minimum and maximum price range. Third: Hedge at least 50 percent of your
volume. A typical contract is 42,000 gallons per month. If
your monthly volume can’t qualify, a quality fuel distributor may offer a fractional portion of a contract. “This will
likely carry a premium, but should still allow you to
achieve your fuel management goals,” Wyatt says.
Fleets should take steps to mingle risk management
tools (fixed price, caps, collars) that can be used regardless
of how fuel is purchased. “Align yourself with a quality fuel
distributor who stays on top of market conditions, has
access to good data and offers programs that allow fleets to
lock in fuel prices,” Wyatt says, adding, “Managers who try
to beat the market will always lose.”
7/25/12 12:38 PM
>> Previous page:This high-volume, high-flow, 6-micron PetroLiance fuel filtering system installed on a small tank wagon
handles 35 gallons of fuel per minute. Prior to installation, the tank wagon operated 500 hours between filter changes; now
the equipment can run 2,000 hours before a filter change is required.
On the technical side, the off-highway industry finds itself
pushing the fast-forward button to keep pace with advanced
systems—filtration systems, aftertreatment systems and fuel
injection systems—that won’t tolerate water and dirt.
“Dirty fuel increases unscheduled maintenance and creates additional downtime on vehicles,” says Air Force
Master Sergeant Andrew W. Slater, commercial vehicle
maintenance manager for the U. S. Air Force in Europe,
Ramstein Air Base, Germany. “Dirty fuel can clog fuel system components and can cause detrimental wear on components that have tight tolerances.”
Fuel filtration, Slater says, initiates at the fuel stand and
then is filtered again by the vehicle’s fuel filtration system.
“With the massive compound of changes going on, the
technology we used 10 years ago doesn’t work,” says Philip
Johnson, new business development-engine liquid filtration for Donaldson. “For all of us in the industry, it’s a
matter of catching up.”
Handling of fuel and lubricants has become such a
major issue that Donaldson has established a new group
whose responsibility is to focus on improving the process
of filtering bulk oil and fuel before they are pumped into
fleet equipment. “How fuel and lubricants are handled
really is going to be a step-changer for equipment uptime
and availability,” Johnson says.
Waste Management has dealt with filtration problems.
About two years ago, fuel filters in the fleet began to collapse
or “by-pass when we weren’t expecting it,” says John Meese,
senior director of heavy equipment, disposal operations support. Meese turned to several industry filtration experts for
help and singled out two companies that he now “heavily
relies on for filtration products.” One was Caterpillar and the
other was Donaldson.
Meese has always expected engine oil, for instance, to be
delivered in bulk at a specified level of cleanliness. He is currently standardizing and implementing strict maintenance
practices across Waste Management’s operations. For example,
the company sends out a field service support team to make
certain field operations are in step with the maintenance and
business systems standardized by Waste Management.
“The system allows us to
track what’s being done,” Meese
says. “It also sends out notices
when the machines have to be
serviced. That PM schedule is
the riding tool for management
to see that it’s happening.”
The team conducts a job site
inspection to ensure that the
company-specified oil and filters,
for instance, are being used to
maintain the standardized cleanliness levels. “We don’t want to
have a 55-gallon drum sitting
with an inch of water sloshing
around the top of the barrel
right next to the hand pump,”
says Meese. “There are very basic
things that we do, but it takes
time since it is a re-education
process. Years ago, fuel systems
weren’t so sensitive, engines
didn’t run at such high temperatures, hydraulics to component
tolerances weren’t so tight.
Today, a tiny speck of dirt can
create problems for you quickly,
>> Josh Amherdt, Chicago area territory sales manager, PetroLiance, monitors a fuel
and we can’t afford to do that.”
sample to check for contamination.
0812EM_f1.indd 18
summer 2012
7/25/12 12:39 PM
>> Airmen assigned to the U. S. Air Force in Europe/Africa ensure fuel is clean and filtered. One crew rolls out portable fuel
filters (left), and another airman takes a fuel sample from a piece of equipment.
The job of standardizing fuel management is an ongoing
effort that Waste Management “hopes to have in place across
the country by the end of the 2012 third quarter,” Meese says.
As stringent as cleanliness levels already are, the levels
yet to come, particularly for diesel fuels, significantly
exceed the requirements of either hydraulics or engine
lubes, says Donaldson’s Johnson. “The cost of a diesel
pump and injector fueling systems can be 40 percent of
the cost of an engine,” he says. “There are environmental
improvements and cost savings to be made, but only if
fleet managers maintain the systems properly.”
One new and challenging problem that has arisen with
the removal of sulfur from diesel has been the addition of
additives to replace the natural lubrication that the sulfur
provides. These additives tend to be high in surfactants.
The addition of biodiesel, which is also a surfactant, creates a major problem for the use of fuel water separators,
quickly rendering many virtually useless, Johnson says.
That problem will have to be addressed by separating
the water either by gravity or by better maintenance of
storage tanks before the fuel is added to the vehicle. “We
will have to look at new technology to remove water on
the vehicle as well,” he says.
It is essential that fuel, particularly diesel fuel, “be as
clean as humanly possible before use just to give the onequipment filtration system a chance to work,” he says.
Johnson recommends that fleets only use above-ground
storage tanks for fuel. “Underground tanks cause more
problems,” he says. “Anecdotally, it is our observation that
water is getting into underground tanks, contaminating
the tanks. Condensation can also present a problem, but
many of the heavily water-contaminated tanks we encounter are underground. Sometimes draining water from
underground storage tanks can be particularly challenging.
“Another reason we prefer above-ground storage is that
it is our preference to filter all fuels and oils before taking
0812EM_f1.indd 19
ownership of a problem batch of fuel,” Johnson says. “Our
challenge doing this is finding a suitable position to install
an inlet on an underground storage tank.”
If water finds its way into the fuel system, it has an
adverse effect on additives and breeds bacteria, either of
which will plug the equipment’s fuel filtration and bring it
down, Johnson says. Cleanliness specifications and standards need to be tightened significantly. “They should be
upgraded for diesel fuels in particular,” Johnson says.
Engine manufacturers are conducting a lot of research
to find out what size particle causes the most damage to
systems, he says.
“We don’t know. We know it’s small, probably around
one or two microns, which is the size of a single cell of bacteria. What we do know is that any free water or fine dust
will rapidly destroy a modern fuel injection system. That’s
why we recommend cleaning all oils and fuels before using
them if you want more uptime than downtime.”
At Waste Management, Meese handles the cleanliness
problem by taking samples of the fuel when it comes in.
“We are very aware of algae that can grow in a tank,” he
says. “We have 28,000 collective vehicles and 4,500 mainstream construction equipment vehicles that must run
every day, so we are pretty serious about fuel cleanliness.”
Waste Management uses ultra-low sulfur diesel throughout
its fleet. Some biodiesel is also used—B-10 and B-11, for
instance—but that’s because there is a tax break at that level.
Despite numerous approaches from suppliers to use higher levels of biofuels, Meese says, “We think B-10 [with that one B-11
exception] is as far as we want to go right now. There aren’t
enough regulations and enforced standards in some of these
fuels, and I don’t think [we will use higher biofuels] for a while.”
Waste Management is quickly becoming the largest user
of compressed natural gas, however. The reason, says
7/25/12 12:39 PM
How to Deal with Volatile Fuel Prices
If you think hazardous and flammable liquids are volatile,
take a look at today’s fuel market.
Fleet managers struggling to rein in fuel costs and maintain at least a semblance of control have had, in the past,
two choices, according to Alan Levine, senior vice president
and financial advisor, futures specialist at Morgan Stanley
Smith Barney.
“They could buy under the rack,” he says; that is, make
purchases routinely at whatever the market value was. “And
many did, depending on the job size.”
Also, it was possible to negotiate a fixed price with a supplier. That proved helpful for budgetary purposes, but if fuel
prices suddenly dropped, fleet managers still had to pay the
fixed price, which could be much higher than the market.
Some fleet professionals have shown an interest in an
alternative approach: the futures contracts market. Futures
contracts can be—at least potentially—as long as 49 months.
But as a practical matter, Levine says, generally they run
about a year.
In the 1990s, a financial device came along that changed
the market. Fleet operators could avail themselves of a financial instrument, a call option, that gave them a right—but not
an obligation—to buy at a particular price.
“If the market should collapse, you would be happy not
to have that obligation,” Levine says. Of course, that flexibility came at a price and, as a result, many people elected
not to do it.
“Part of that has to do with cost,” he says. “You’re buying
a lot of time.
“Assuming you don’t have a lot of storage, you can buy a
futures contract that gives you a fixed price. If prices go up
you have coverage and if prices go down you still have to pay
that fixed price, but at least you have the possibility of exiting
the position and riding with the market.”
Although that sounds like a win-win situation for fleet managers, naturally it’s not that simple. The problem is, you have
to know something about oil and gas, which is highly unlikely
if, like most people, you are not a professional. In fact, professionals don’t always get it right either, Levine says.
“Last year, many of us saw a year during which prices did
not crest,” he says. “They moved within a certain range all
year, five moves higher and four moves lower averaging 42
cents. Even though we did not trend in the market, we still
had a tremendous range of activity—and it is more difficult
to deal in circumstances like that. You really need to be available full time to watch that kind of market, which isn’t realistic for fleet managers.”
Levine has these suggestions:
• First, recognize that managing your risk to oil price movements is not a simple task. It’s not something you do in
an off-hand way. You have to learn the fundamentals of
how these financial instruments work. “To do that, take
an introductory class,” Levine says. “There are various
offerings available and some of them are actually good.”
• Find a competent advisor, someone who can sketch out
alternatives appropriate to your situation and help you
evaluate what’s happening in the market at various times.
• Establish a budget. You have to have some idea of how
much money you want to spend on the process of managing your risk to price movements. What do you want
to spend on options or futures contracts, and is it worth
the money to have that kind of flexibility?
Levine lists one item that he would put on the Don’t Do
list: “The worst thing you can do is have decisions by committee. That is a very common problem,” he says. “It kills
more risk management in the fuels area than anything else I
can think of, and is a very serious issue. In the end, all the
tools and ideas are approximations. It’s not the same exactly,
as your guess is good as mine; but, more likely than not, with
a committee it will be a guess.”
Then who should have the authority to make the decision?
“Perhaps somebody in the supply department with financial
ties, an engineering background or somebody with mathematical skills. Although in some smaller companies it may be
the case, generally it should not be someone at the presidential level,” he says.
The single most important message that he has for fleet
managers is to remember that dealing with fuel price fluctuations and the market is not easy. “It’s nothing you can do
by rolling out of bed in the morning and suddenly becoming an expert,” he says. “When you recognize that, you’re
halfway home.”
Alan Levine is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley Smith Barney in Washington, D.C. The
information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and
not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all
investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of
the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC, or its affiliates.
Meese, is that natural gas is cleaner and doesn’t require diesel particulate filters. The second reason is that Waste
Management owns a large amount of real estate in
Pennsylvania: 28 landfills and huge tracts of land where
“fracking” (hydraulic fracturing) is going on.
“We opted to take certain percentages of the royalties in
natural gas rather than cash,” Meese says. “We can take
that natural gas much cheaper than we can purchase it.”
Natural gas does use slightly more lubricants than diesel
0812EM_f1.indd 20
fuel, he says, but “it’s an easy trade-off for us.”
Of course, not many fleet operations are as large as
Waste Management, but that should not stop fleets from
drafting a written fuel management plan tailored for their
own company, Meese says.
The basic elements consist of knowing the regulations
in the local area, training operators so they know why they
have to do certain things and using newly developing technical devices. EM
summer 2012
7/25/12 12:40 PM
Mark Pivetta, Dave DeYoung, and John Gleim. Not exactly the kind of guys
who’ll talk your ear off. But they will, however, tell you exactly where they stand
— especially when it comes to productivity. Which is why we couldn’t have been
more grateful that these contractors (and many more) volunteered so much of
their own time to help us design Deere excavators. And why we hung on every
word they had to say. From an Interim Tier 4-certiƟed engine that actually helps
increase productivity, to a cab with unmatched comfort and visibility, the new
G-Series Excavators prove that when it comes to innovation, talk is priceless.
Learn more from your John Deere dealer or our website.
21_1111EM_Deere.indd 21
7/25/12 9:54 AM
AEMP Takes Safe t
Task force looks at ways
to support members’
effectiveness in
core competency
0812EM_f2x.indd 22
here is only one thing in fleet management
that outweighs productivity: safety. So says
Daniel Connelly, CEM and vice president of
equipment services at Oldcastle Materials.
“Developing a culture of safety rightfully has become
increasingly important,” he says, explaining how he came
about proposing an idea to the AEMP board of directors at
last year’s ConExpo-Con/Agg. He suggested that the association explore how best to improve the flow of information on safety incidents, playing off procedures already
practiced by end-user fleets, OEMs and distributors.
Such an effort, spearheaded by AEMP, he says, would
benefit the entire construction industry by moving it closer
to attaining a zero-tolerance level for preventable incidents—no injuries, no accidents and certainly no fatalities.
Companies already have safety programs in place that
recognize, record and analyze their own safety statistics,
says Connelly. “That is a vital first step in maintaining a
basic program for all employees,” he says.
summer 2012
7/25/12 12:41 PM
don’t think AEMP should
“ Ireinvent
the wheel when it comes
to safety. Safety is a culture we all
support and we all take seriously.
Many companies have safety
departments with dedicated
people who are trained and
certified in this field. One of the
challenges for us as an association
is not to duplicate efforts.
>> The safety task force spent several hours
working on the issues during the Annual
Conference in Scottsdale, Ariz.
ty Stand
“In seeking better ways to prevent injury, accidents and
fatalities, my company, and other companies, have transformed basic Tool Box talks into OSHA and MSHA
reporting and compliance.”
In fact, most companies model their safety reporting
one way or another on the OSHA system, which requires
fleet managers to keep track of and gather information on
recordable injuries, recordable and preventable vehicle
incidents and lost time.
“In a straightforward sense, you might say we are using the
OSHA approach as a model to collect data,” Connelly says.
“The idea is pretty simple: We take the information we are
already reporting and make it more useful and more targeted.”
For example, slips, trips and falls are the most typical
occurrences, topping out an organization’s recorded safety
0812EM_f2x.indd 23
incident list. “But,” Connelly says, “we don’t know what
we’re tripping, slipping and falling from.”
If the industry has a way to compile the most current
and relevant information, OEMs, end-users and distributors
can collectively be more proactive, resulting in—at the very
minimum—a reduction of all such incidents, Connelly says.
Construction is a moderate- to high-risk business, he
says. People in the field are working around heavy equipment; climbing in and out of cabs; using machines to dig
trenches, lay pipe, move rock and debris; and many times
the job of building or repairing roads and bridges places
work crews only a few feet away from moving traffic. Back
in the shop, technicians are focused on maintenance and
using tools and technology to troubleshoot, repair or
remove engines and transmissions, working near flammable and sometimes hazardous material. Outside the shop
door, vehicles of all weights and sizes are being moved
around the yard, not to mention administration and office
personnel who also must work in a safe environment.
Granted, Connelly says, industry safety statistics are
improving, “but we aren’t there yet.”
In 2008, the AEMP board in a strategic planning process identified three critical issues that needed to be
7/25/12 12:41 PM
Our very structure rests on the
Equipment Triangle—end users,
distributors and OEMs. We work
together in a partnership for
the betterment of our industry.
Top OSHA Violations
Scaffolding: Occurs when the surface won’t
handle the weight of workers.
Fall protection: Required for working at a
height of four feet or more.
Hazard Communication: Mislabeling and
the absence of the safety data sheet.
Respiratory protection: Protection for all
employees, such as dust masks and respirators.
Lockout-tagout: Avoids the start-up of
equipment or machinery while it is being serviced. A lock must be visible to all employees,
locking the power source of the equipment.
Electrical wiring: Hazards include insulation, incomplete circuit devices, mislabeled
circuit components, current conductivity,
overhead lines, proper grounding and accidental start-up.
Power industrial trucks: These accidents
typically occur with forklifts and smaller
Electrical general requirements: Pay special
attention to circuit breakers, connection of
equipment, power cords, circuit identification
and inspection of electrical equipment.
Machine guarding: Any machine part that
might harm employees must be protected.
Safeguard point of operation, power transmission and other moving parts. Prevent contact, protect from falling objects and provide
secure safeguard to moving machinery parts.
0812EM_f2x.indd 24
addressed—telematics, emissions and safety. With efforts
in telematics and emissions initiatives well underway, the
board asked Connelly to head up a task force that would
focus on the third and most difficult issue, especially since
safety is identified as one of the core competencies of a
Certified Equipment Manager.
“AEMP is devoted through education to safety both in
the duties as it applies to equipment management and
within our own companies, as well,” says AEMP Chairman
Guy Gordon, CEM, and director of asset management for
Aegion. “Along with the education that we provide and the
fact that safety is one of our core competencies, we want to
pull from the knowledge of experts in the field to make
sure we provide our membership with the most relevant
topics and current information out there.”
Robert Merritt, CEM, director of maintenance for
URS, who serves as chairman of AEMP’s education committee, pointed out that the organization is well suited for
the task. “Training and education are what we do, and
safety is one of our top priorities.”
AEMP Vice Chairman Warren Schmidt, CEM, and
corporate equipment manager, Flatiron Corp., says, “I
don’t think AEMP should reinvent the wheel when it
comes to safety. Safety is a culture we all support and we
all take seriously. Many companies have safety departments
with dedicated people who are trained and certified in this
field. One of the challenges for us as an association is not
to duplicate efforts.”
Another reason for the association to tackle the safety
issue, Connelly says, “is because it’s a natural fit. Our very
structure [rests on] the Equipment Triangle—end users,
distributors and OEMs. We work together in a partnership
for the betterment of our industry.”
Since safety is the most complex of the three AEMP
critical issues, the task force approached its challenge in a
summer 2012
7/25/12 12:42 PM
meticulous and methodical manner. Quickly, it became
obvious that the task force should be expanded into a
safety committee made up of representatives of OEMs,
end-users and distributors.
One idea that is being considered is a reporting template to be utilized by smaller and emerging companies
that do not yet have a culture of safety, Donnelly says.
Although the board has not officially approved the template, AEMP President and Chief Staff Officer Stan Orr,
CAE, says, “We envision a template for companies to consider that contains information that is consistent and collected in the same way.”
“There is definitely support for developing such a template,” Gordon says. “The work that has been done to this
point has a lot of relevance. The industry could use the
information as yet another valuable tool that would be
applicable within each individual company.”
Another road that AEMP could take is to encourage the
use of 800 numbers provided by OEMs, suggests Schmidt.
“This is still under discussion. I don’t even
know if all fleet managers are aware of these
800 numbers, since safety departments usually
handle such incidents if they occur.”
One reason for the lack of awareness is that
the numbers traditionally are published in the
operator’s manual, a document fleet managers
don’t usually review on a day-to-day basis.
Schmidt says one way AEMP could help
increase fleet management’s awareness might be
by publishing the numbers on a wallet-size card
that can be carried and immediately accessed.
“Many fleet managers don’t know there
is a list of 800 numbers to call in case of an
accident,” says Gordon. “Those numbers
report the incident straight to the OEM. One
way we could encourage use of these numbers
would be to post them in one place—online,
for instance—where they would be available
to anyone, not just AEMP members.
“If we could get more people reporting
incidents into the manufacturers, we believe
OEMs will take note and provide us with
even safer equipment,” he says. “This feedback would allow them to take action, if
action is needed.”
Another idea AEMP is considering is an
AEMP Safety Summit similar to the 2008
telematics summit. “For example, Caterpillar
now has a safety division, so we could request
OEM safety experts to conduct sessions
explaining the services they offer,” says Schmidt.
0812EM_f2x.indd 25
Schmidt also would like to see AEMP promote and
expand the association as an educational organization. “I am
sure there are sources out there who can give us the information we’re looking for,” he says. “AEMP is doing an awesome
job on the education front and should continue to do so.”
While the safety committee is making progress, discussions of these ideas and others are continuing.
“I recognize that we have some challenges ahead of us,”
Connelly says, “but at this point we are engaged in arriving
at an overall strategy that will best serve the industry. We
are asking for the help of various members of AEMP in
making this happen.”
Connelly says he was encouraged by the level of interest, the drive and the determination of everyone to achieve
the safety enhancements that are needed.
“In light of the work that is being done,” he says, “I
think we are making very good progress on safety—and
that’s the most difficult of the three most important critical
issues identified by the AEMP membership.” EM
AEMP Safety Committee
Dan Connelly, CEM, Chairman, Oldcastle Materials
John Bartz, Volvo Construction Equipment
Ken Burke, Bechtel
Mike Colombo, Castrol
Teddie Foreman, Zachry
Bob Hawken, CNH Global
John Hawkins, Geneva Rock Products
Doug King, CEM, Sherwood Construction
Frank Lloyd, Cripple Creek & Victor Goldmine
Mark Malamphy, Midasco LLC
Jerry Melinda, Oldcastle Materials
Bob Merritt, CEM, URS
Joe Phelan, Ritchie Bros.
Don Roley, Caterpillar
Jeff Schroder, Traylor Bros.
Alexis Smith, Castrol
Mark Stelford, John Deere Construction
Gary Tong, IronPlanet
Tim West, John Deere Construction
7/25/12 12:42 PM
26_0812EM_RitchieBros.indd 26
7/25/12 9:57 AM
eett Masters
The Air Force’s European operations
strive for economical, efficient operations.
he U.S. Air Force in Europe/Africa has a daunting
task in addition to its military duties. It has to
keep track of and maintain 8,000 vehicles, including tactical and armored units, operating at 43
locations in Europe, Africa and Southwest Asia. Among the
total unit count are 1,700 pieces of construction equipment
of various—but limited—OEM makes and models.
To improve its own methodologies, military fleet managers for the defensive operation are constantly evaluating
what the private sector is doing, according to Master
Sergeant Andrew W. Slater, EMS, commercial vehicle maintenance manager at U.S. Air Force headquarters, Ramstein
Air Base, Germany. Its efforts in this and other areas earned
it the 2012 Fleet Master award for public fleets.
To keep its rolling stock rolling, Slater says, requires
personnel to have essential skills in extensive technical and
operations knowledge, ranging from safety training to
vehicle maintenance and fleet management.
These skills come into play in two types of applications
that use military off-road equipment. One area is “horizontal” projects, the other, “vertical” projects. Horizontal
work consists of buildup and repair of aircraft runways,
road construction and repair, forest management and snow
removal. Vertical jobs refer to support of maintenance/
repair projects on facilities “stemming from the World War
II era,” Slater says. “Our vehicles also support aesthetic vertical construction, such as underground garbage disposal
units, under- and above-ground parking facilities, as well
as brick and concrete security barriers.”
The first question that comes to mind, of course, is
what’s different and what’s similar about managing a military fleet versus a civilian fleet.
For starters, Slater says, failure is not an option in the
0812EM_f3.indd 27
military. The private fleet, by comparison, has a choice:
shore up its weaknesses or close its doors.
“Also, unlike the civilian fleet, we are extremely limited
in what make and model vehicles and equipment we are
authorized to purchase,” he says. “This issue is compounded by operating outside the United States without
direct access to dealerships for parts and warranty support.” And, of course, another differentiating factor is
repairing battle-damaged equipment.
Otherwise, fleet management is pretty much the same
in or out of uniform: operating economically as well as
efficiently; lowering the fleet’s carbon footprint; reducing
dependency on foreign oil; and investing in proven and
reliable fleet technology.
The biggest challenge for the military fleet professional
is familiar to civilian operations. Slater says it is overcoming fiscal shortfalls and bridging funding gaps. “Our procurement dollars are under constant scrutiny and are
reduced on a constant basis. One way we meet that challenge is by pooling resources and policing commodities to
get the most out of every dollar,” he says.
One of the primary ways the Air Force attacks funding
challenges, says Slater, is by right-sizing the equipment
according to what’s needed. For instance, if a unit is
assigned a 3/4 stake-and-platform truck that shows low
mileage and is underutilized, “we evaluate why the mileage
is so low and how the vehicle is being used. If the vehicle
use can’t be justified, we will right-size and rotate the vehicle to another location [where it’s needed].”
Another way resources are pooled is by sharing use of a
vehicle among a number of people.
The one place where the military’s dictum of “no room
for failure” does not apply is unlimited funds to purchase
7/25/12 12:51 PM
Slater says. From there they progress
vehicles for what-if situations, Slater
to craftsman and journeyman levels,
says. Rather, there is a “base vehicle
following a documented path that
priority list,” he says, that works this
clearly shows what steps have been
way: If the military police on base
taken and what steps still must be
fall below a certain threshold, “we
made to reach the next level.
recall a vehicle from a lower priority
All the classroom studies are balunit, such as protocol or band, and
anced by hours of on-the-job trainassign it to military police.”
ing that rotate students throughout
In setting up a preventative mainthe different fleet maintenance and
tenance (PM) program, the military
management facets.
looks at long-range and short-range
Regardless of what type of trainschedules, says Slater. PM, as with
ing personnel are involved in, Slater
civilian fleet operations, is based on
says, the top priority common to all
vehicle usage, manufacturer’s recomis a strong emphasis on safety.
mendations and industry trends.
“Safety is embedded in everything
“Our short-term PM schedule [is
we do,” he says.
made up of ] daily, weekly and
Each apprentice, journeyman
monthly documented vehicle opera>> Msgt. Andrew W. Slater, EMS, comand craftsman has assigned training
tor inspections. We also promote
mercial vehicle manager, U.S. Air Force
in Europe/Africa, uses a laptop to take
records that allow supervisors to
and document a full bumper-toa quick diagnostic reading from one of
assign work in a safe method and
bumper mechanical safety inspecthe military fleet vehicles under his
provide an avenue to track progress,
tion when vehicles are turned in for
Slater says.
“Safety classes, conducted by the supervisor or a trainer, are
By comparison, long-range PM follows a standardized
incorporated throughout an individual’s upgrade training, but
18-month scheduled maintenance plan, plus documentaare usually small in size [about six people or less],” Slater says.
tion of vehicle safety inspections mandated by the
Other safety training includes Operational Risk
Department of Transportation.
Management, a 24/7 safety training program that allows
For example, Slater says, a typical vehicle turned in for
an individual to stop, assess a situation and determine the
maintenance undergoes a series of checks before being
best course of action to mitigate mishaps and accidents
released. That checklist, which is done prior to initiating
related to the industry, says Slater.
any work orders, covers such items as fluid levels, steering
In addition to safety support from higher headquarters,
components, belts, hoses, tires and lights. This approach
such as providing monthly safety articles that relate to realidentifies work that is to be completed, Slater says, and
life experiences, each individual has his own documented
identifies any delayed or deferred parts that may have
safety form that covers core shop-related safety issues and
arrived since the vehicle’s last inspection. “This provides a
is administered yearly by a supervisor. Automated dataone-stop-shop mentality for our short- and long-term PM
bases are also used in the training process for larger safety
schedules,” he added.
programs, for instance anti-terrorism, says Slater.
Unlike many, if not all, civilian fleets, when it comes to
Although the military learns a great deal by monitoring
fleet maintenance, operation analysis and vehicle control
the private sector, there is one area that private industry
programs, “We raise our own [personnel] from the grasscan improve on, Slater says. That is right-sizing their fleet
roots level,” says Slater. Before employees [active duty airvehicles and reducing unnecessary cargo. “For example,
men] are assigned to a particular USAF base, they are
when you have a 75-mile-a-day route using a 3/4-ton,
required to undergo training at a joint service school at
4WD truck to deliver small items, that is not the right fit,”
Port Hueneme Naval Air Base in California. Here they
he says. “Using the same example, hauling unnecessary
receive early-level vehicle maintenance training for six to
heavy items puts wear and tear on the engine and vehicle
18 weeks that includes engine, hydraulic, pneumatic,
chassis while eliminating any potential fuel economy.”
brake, steering and electrical system fundamentals.
It has been said there’s a right way, a wrong way and the
Operations and analysis training is a six-week course covering vehicle fleet accounting fundamentals, such as database military way. On closer inspection of this 2012 Fleet
training that feeds the USAF Web-based enterprise system. Master, there is also a successful way—even if your fleet is
scattered across three continents. EM
Upon graduation the students are considered apprentices,
0812EM_f3.indd 28
summer 2012
7/25/12 12:52 PM
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Dealers provide input to help optimize tire investment.
ire management provides an ongoing challenge for
construction equipment fleets. To a greater extent
than most components and systems, tire lifecycle
and maintenance requirements are determined by the
machine’s applications and working conditions, which can
vary widely depending on the scope of the fleet’s projects.
Tires play a key role in the productivity of construction
equipment. Minimizing or eliminating tire problems can
have a significant impact on uptime and job completion.
While many fleet managers choose to rely on in-house
resources for tire maintenance and replacement, others
have found success in partnering with their equipment
dealers to define tire-management strategies that maximize
their investment and minimize downtime.
Consider that a flat tire even on a small machine will
cost an average of four hours downtime—not to mention
maintenance or replacement costs—and you get a sense of
the importance of selecting the right tires and providing
proper maintenance.
0812EM_f4.indd 31
Manufacturers usually equip their machines with standard
tires designed for the most typical applications the
machine will perform. A fleet manager can rely on his
equipment dealer for advice on choosing the right tires,
based on a number of factors.
McCann Industries, a Case dealership in Bolingbrook,
Ill., offers equipment managers strategic advice as well as
service and support concerning tire selection, maintenance
and eventual replacement.
“Tire life can be as little as 500 hours or as much as
1,500 or more hours, depending on the applications,” says
Richard Hoffmeyer, product support manager, McCann
Industries. “We can help the fleet manager understand the
various scenarios of tire lifecycles and choose tires that
make the most sense from the standpoint of purchase
price, expected maintenance costs and eventual replacement costs. In operating environments that are extremely
hostile, we may recommend that the customer not spend
7/25/12 1:01 PM
General Purpose Tires
1 General-pupose tires
2 Flotation tires
3 Special application tires
Photos: Case Construction Equipment
0812EM_f4.indd 32
>> Previous page: Extended
coverage programs may
include physical damage
insurance for tires, covering
vandalism, accidents and other
instances of damage requiring
tire replacements.
extra money on premium
tires, based on the understanding that no matter how
good the tires are, they’ll
need to be replaced at frequent intervals.”
Although tire dealers also
can provide advice and support, many fleet managers
decide to rely on their equipment dealer for their tire service and support. This onesource approach not only
streamlines record-keeping and
accounts payable processes; it
ensures that a qualified, professional service team is providing
comprehensive support and
making recommendations
within the overall context of
the machine’s condition and
remaining productive lifespan.
“When you rely on the
dealer for tire service, you will
have access to the tire-maintenance records that will help
you make decisions about getting the most life out of the
tires and eventually replacing
them at the optimum time,”
Hoffmeyer says. “And at
trade-in, the machine will
have more complete maintenance records. That helps
assure the next buyer of the
machine’s value and the care
that it has received.”
When machine applications
call for working in hostile
conditions, the costs of tire
maintenance and replacement
can mount quickly, in terms
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Flexible Solid Tires
Each flexible solid tire adds weight to the
machine. A set of four will increase operating
weight by about 800 pounds compared to typical pneumatic tires. The increased weight effectively increases operating capacity for higher
productivity. The additional weight also helps
stabilize the machine by lowering the center of
gravity, resulting in greater operator confidence
and productivity.
No specialized equipment is required for
installing or removing the flexible solid tires. In
addition, the tires are designed to be mounted
on either side of the machine.
A sample cost analysis demonstrates the value
of a set of flexible solid tires compared to a set
of standard pneumatic tires and a set of foamfilled pneumatic tires.
The following example depicts prices from a
randomly selected dealer.
Avg. Retail Price, Set of Four
Foam Filled Add-on Cost
3-to-1 wear margin
Tire Cost
24 Flat Tire Repairs @ $65
Wheel Replacement
Service & Disposal (2 sets @ $112)
Total Product Cost
Skid Steer unproductive downtime
(Based on 20 hr. @ $50 /hr.)
Total Cost Including Downtime
Cost/Hour @ 1,500 hours
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of both dollars and downtime.
Some specialized solutions are
available to minimize these costs.
For example, equipment managers increasingly are using solid
tires to enhance productivity,
improve uptime and minimize
tire maintenance expense for
machines working in hazardous
conditions. Solid tires are priced
at a premium over pneumatic
tires, but they offer equipment
managers an important strategic
advantage: They last a long time
on the job. Their longer lifespan
translates to savings in maintenance expense and savings in
replacement costs.
“Solid tires are not just for
skid steers,” Hoffmeyer says.
“We’re also seeing many customers order them for wheel loaders
and loader/backhoes working in
extreme conditions, like recycling, scrap handling, junk yards
and demolition. They last three
>> Standard tires are designed for a machine’s most typical applications, but
or more times longer than pneudistributors can offer advice on choosing the right tire if conditions are different.
matics and reduce tire maintenance such as inflation problems and blowout repairs.”
This extended coverage adds some costs, but typically it
Similar to solid tires are foam-filled pneumatic tires.
is much less than the cost of replacing the tires on any
Although they add some protection, foam-filled tires also
piece of wheeled equipment.
add weight to the machine, which can strain the axles and
transmissions. Foam-filled tires weigh more than flexible
solid tires, which also weigh more than pneumatic tires. In Although it may not seem like a component of strategic
contrast, solid tires typically weigh within the allowable
tire management, fleet managers should consider equipoperating specs of the machine.
ping construction vehicles with smart GPS systems that
Fleet managers may consider other options for procan track hours of usage and miles traveled, both of which
tecting tires working in hazardous conditions. These
figure into tire replacement cycles.
include tire-chain systems, which also provide traction
Keeping spare tires available is essential. Many if not
assistance in slippery operating conditions, and a system
most operators are capable of handling a tire change on the
of interlocking metal rings referred to as “mail” that is
job site, if a spare is available. This can be a big time saver
several inches thick and keep tires clear of hazards such as and a way to minimize downtime. Here again is a situation
hot metal in steel mills.
where the dealer can help a contractor manage: The dealer
can be on call for changing tires, or can be used as a disEXTENDED MAINTENANCE COVERAGE
patch service to send a third-party tire dealer to the job site
Fleet managers can obtain extended service and maintefor a quick tire change and replacement.
nance programs through their equipment dealers over and
Defining and implementing the right tire-management
above typical OEM warranties. These programs may
strategy will help minimize costs and downtime, and maxiinclude physical damage insurance for tires, covering vanmize productivity and profit. EM
dalism, accidents and other instances of damage requiring
Eric Metzger is product marketing manager, parts &
tire replacements.
service, for Case Construction Equipment.
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