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PACCAR Financial Helps Refrigerated Fleet Acquire More Fuel-Efficient Kenworth T680s

TRAC Lease Finances Kenworth T680s Equipped with PACCAR MX-13 Engines

When it comes to equipping his company’s trucks, Central Coast Transport Inc. president and founder Gustavo Alcala has two golden rules. The first rule is the company’s trucks must offer drivers a comfortable place to work. The second is they must be ones he would be proud to drive.

“My dad has always had a passion for driving trucks,” says Cesar Alcala, operations manager for the Bakersfield, California-based refrigerated transport carrier and Gustavo’s eldest son. “My dad’s been driving trucks since he was very young. And when he started our company 20 years ago, he was driving a truck every day from Los Angeles to Salinas. He understands how hard drivers work and how important it is for them to have comfortable trucks. That’s why it’s always been our business philosophy of spec’ing the best equipment in order to attract and keep the best drivers.”

So, when it came time to replace some trucks in 2015, Cesar says he and his father looked at several options, including the Kenworth T680 equipped with the PACCAR MX-13 engine at the recommendation of local dealer – Papé Kenworth. Gustavo even drove the trucks himself to get a feel for how they drive. Father and son decided to go with the T680 and they chose to finance them through a terminal rental adjustment clause or TRAC lease from PACCAR Financial.

“PACCAR Financial was able to come up with a competitive financing package that gives us the options we want for our drivers,” Cesar says. Central Coast Transport Inc. replaces older trucks with brand new ones about every four years. TRAC leases offer the family-owned and operated company more financial flexibility to accomplish that replacement schedule by establishing a pre-determined residual price. Financial flexibility comes in the form of lower monthly payments or less money required up front compared with typical terms on loans. At the end of the lease term, the refrigerated transport carrier can return the trucks to PACCAR Financial in accordance with the lease provisions, keep them and re-finance the residual price, or buy the trucks for the residual price and sell them to their owner-operators or to other fleets.

Kenworth’s strong resale value allows PACCAR Financial to offer Central Coast Transport a competitive rate with its TRAC lease. The company has used similar financing from big banks before to acquire trucks. But after dealing with PACCAR Financial, he feels confident about using the OEM financing company instead. “Clearly, they know their products,” he says. “So, you don’t have to explain your spec’ing choices.”

“We’ve already had some of our owner-operators tell us that when the Kenworth T680s become available, they want to buy them,” he adds.

According to Cesar, that interest among owner-operators only reinforces their decision to move toward Kenworth. For years, Central Coast Transport has run trucks made by a different OEM, but the T680s offered the company opportunities to save money on operating costs while at the same time boost driver satisfaction, he says. The T680s receive high marks among drivers and owner-operators for their comfort, style and quality. Plus, the PACCAR MX engine’s B10 design life of 1 million miles and its availability in a 500-hp option convinced them the T680 equipped with PACCAR MX Engines would be the right choice.

“We’ve been extremely happy with the PACCAR MX engine and the T680,” Cesar says. “We got some early feedback from our drivers shortly after the trucks went into service. They’ve all commented on how much quieter the PACCAR engine is compared to others they’ve driven and how comfortable the T680 is. One of the things we especially like about the T680 is its driving assistant.”

Central Coast Transport’s T680s are equipped with the Kenworth Driver Performance Assistant, which provides drivers a tool that acts like a virtual coach to help them improve their driving habits. Drivers obtain real-time coaching based on coasting and braking as a means to improve fuel economy and reduce brake wear. A point system gives the drivers and the company the visual feedback to impact improvement.

“The driver assistant can provide feedback to our drivers wherever they go, so we don’t have to ride along with them to evaluate their driving,” Cesar says. “It can offer them guidance in situations as they happen. We think that’s a much more effective way for drivers to learn how to improve their driving. It can advise them when to shift to get optimum fuel economy.”

The performance assistant, coupled with the T680’s aerodynamics and the fuel efficiency of the PACCAR MX-13 engine, have all contributed to the T680 delivering an average 1.2 mpg improvement in fuel economy over the performance of other trucks in Central Coast Transport’s fleet. That’s a 21 percent improvement in fuel economy performance, which coupled with the positive response from drivers after just four months of service, convinced the Alcalas to acquire up to 20 more Kenworth T680s by the end of 2016. If the T680s continue to perform as brilliantly at they have so far, Cesar says by 2017 the company will replace all of its fleet with T680s.

Central Coast Transport has three good reasons, Cesar says, why it would choose to become an all-Kenworth fleet. The first reason is the money the T680 and PACCAR MX-13 saves the company at the pump. Since its trucks travel an average of about 15,000 miles per month, and the average diesel fuel price the company pays as of late March 2016 is $2.25 per gallon, Cesar figures each TRAC lease-financed T680 saves the company about $850 per month on fuel. The second reason is that the fuel savings the T680s deliver allow the company to buy more trailers so that it can now maintain a near two to one ratio of trailers to trucks. Cesar says that 2:1 ratio means the company can support a drop and hook type of business, which is another big plus in attracting and retaining good drivers.

“Our drivers can make their deliveries and then hook up to a full trailer that’s already ready to go,” he says. “They don’t have to wait for their trailer to be unloaded before they can be on their way with another payload. When they can keep their trucks moving, they’re making more money.”

The third, and perhaps as equally important reason to the company and its founder, Cesar says, is the fact that company drivers love their Kenworth T680s.

“Maintaining driver satisfaction not only meets my father’s expectations, but it also helps us maintain another important performance result we’re all proud of: a low driver turnover rate of 10 percent,” Cesar says.

Compared to the American Trucking Associations’ latest estimated turnover rate of 75 percent for small truckload carriers, Cesar freely admits that’s a turnover rate any truck fleet owner and manager would envy.

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