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May 17, 2012  |   Comments (7)   |   Post a comment

Barker Bus to turn over fleet every 5 years

By Kelly Roher and Thomas McMahon


BRIDGEWATER, N.J. — Barker Bus Co. has launched a fleet replenishment plan that will have the school bus contractor turning over its entire fleet every five years.

Don Bickel, interim operations manager, told SBF that the program will be a key part of attaining the company's new mission: "To be the premier student transportation provider in the state of New Jersey." The company also has a new theme: "Our customers come first — always!"

"We’ve been a company with 75 or 80 big buses every year, and we’ve had them for a very long time," Bickel said. "I came to the company with a couple of other retirees who came out of the business world who said, 'There may be a better way to look at things.' We started to ask the question as to whether it was cost-effective to continue to maintain buses when they hit the seven-, eight-, nine-, 10-year cycle."

Bickel said they convinced Barker Bus owner Peter Chesson that it made sense both in maintenance costs and from a customer-service perspective to replace buses earlier.

"If all of the vehicles went out of here with a luster still in them and they aren’t all banged up from 10 years of service, it might change the perception of the company," Bickel said.

Chesson decided to replace one-fifth of the fleet with new buses this summer, with the plan of doing the same over the following four summers. Then, no bus will be more than five years old.

In the sixth summer, the first-year buses will be replaced with new buses, and so on.

"We’re basically on a 20% fleet replenishment every year," Bickel said. "It’s focused on the customer-service aspect, and we get the benefit of the savings on maintenance."

He noted that the residual value of whatever loan is outstanding at the end of the five years will be lower than the market value of the buses, so the company will make money when selling them. That money will then be used to pay down the cost of replenishing buses in the following year.

The new buses will have air conditioning, tinted windows, child safety alarms, cameras and GPS technology to assist in route performance and monitoring.

"At the end of five years," Bickel said, "when all the big buses are no older than five years, we will save just under $250,000 per year in maintenance costs alone."

Bickel added that Barker Bus plans to focus on its hiring processes and retraining the existing workforce to enhance its customer focus.

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natashs    |    Mar 08, 2013 01:16 AM

Ken, you say you are running a fleet of 40 buses with an annual parts and tire budget of 38,000.00?, that is about 1000.00 a year alloted for expenses per bus?

Steve    |    May 18, 2012 12:48 PM

Bill, Unfortunately you can have problems that occur with new vehicles. It can be engine, trans, wiring, etc. It is frustrating to have to deal with these issues that can occur with new, expensive school buses, but it does and will happen. For this reason I recommend new bus purchases be made in small groups, say five per year. This will enable you to better deal with recalls, warranty issues and recurring problems. You now have 5 problems as opposed to 20 or 30 and it will keep your fleet new and be less of a budget strain.

Steve    |    May 18, 2012 12:41 PM

We tried something like that a couple of years ago. We bought 12 Bluebird Chevrolet with the Cat 3116 engines. Our maintence costs went up. The units spent more time running back and forth to the dealer than they did on the run. This is the sort of thing that has to be figured out very carefully. Some people don't like the older busses but figure in the loan payments that you are NOT making.

Bill    |    May 18, 2012 11:46 AM

Excellant Idea. Now we need the NJ state government to think along the same lines. Then we would not have NJ public school districts running around with old, outdated, rustbuckets spewing excessive pollutants due to old emission technology! Right now, it is NJ law, that a school bus can remain in service until the end of its 16th or 21st school year! That is totally un-realistic, especially due to the rust and corrosion vehicles in NJ are subject to and the fact that parts no longer become available and the increased maintenance/labor costs to upkeep an aging fleet. I believe a school bus in NJ can have a productive life-span that does not exceed 12 years. 12 years is the magic number, after that many components that were not designed to be replaced or generally last the lifetime of the vehicle are worn out or rotted away. Also, when an older bus is involved in an accident and body work exceeds approx. 6,000.00, the insurance companies wont agree to the repairs as they claim the repairs exceed the value. Your 5 year plan will ensure a safe vehicle with the latest technology and if you purchase extended warranties your maintenance costs will be extremely low.

Steve    |    May 18, 2012 11:38 AM

How can they possibly be spending $250,000 a year to keep 75 to 80 buses running. We keep half that amount of buses going safely with a parts and tire budget of only $38,000 a year. The average route milage is 18,000 per year, and the average age of our fleet is 14.2 years old. Many have over 300,000 miles racked up. So what gives?...Must be nice to have your whole fleet under warranty. Maybe this contractor got rid of their maintenance crew and that's how they are saving so much.

Ken    |    May 18, 2012 11:13 AM

An excellent plan! You can then differentiate yourself by offering 'quality' which many other competitive operations cannot, or do not. It is not difficult to assess the optimum age to dispose of a given make/model of vehicle if you have good maintenance records and you depreciate vehicles by, say a 22 to 25% reducing balance, which keeps your vehicles roughly in line with their market value. Maintenance costs always increase in a series of peaks and troughs, depending on big value items like tires, transmission, brakes, engine, etc. Depreciation reduces, either by straight line or reducing balance, year on year, so the year that the two costs added together just start to increase is the time to dispose of them. The only thing to watch, is to ensure you buy a quality vehicle that is trouble free from day one, is sort after in the marketplace, and will have a really good residual value when you dispose of it. The other fllet benefit is the need for less spare vehicles.

John Ashmore    |    May 18, 2012 10:32 AM

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