Across the global supply chain, volatility is the new normal. Inflationary pressures, material shortages, and unpredictable tariff shifts have pushed many procurement leaders toward a ‘wait-and-see’ stance on capital investments.
However, for supply chain and fleet operations, that hesitation is costly. A hidden ‘hesitation tax’ quietly eats into margins, compromises operational resilience, and weakens an organisation’s competitive advantage. The longer procurement teams delay equipment upgrades, the steeper the eventual price tag—both financially and operationally.
The stark reality is this: failing to act now on upgrading aging equipment and trucks will inevitably cost more in the long run.
The hidden costs of procurement delays
The ‘hesitation tax’ represents the cumulative penalties of deferring essential investments—higher maintenance costs, increased downtime, and lost efficiency. In fleet terms, older trucks require more frequent repairs, consume more fuel, and create bottlenecks that ripple across the supply chain. Maintenance costs surge dramatically as vehicles age, with proven analyses indicating that older vehicles are significantly more expensive to operate.
Global trade dynamics are also raising costs. While the global economy in 2024 showed significant growth, trade tensions have persisted in 2025, and ‘Trade War 2.0’ remains a concern, with major economies implementing or considering protectionist measures.
These geopolitical factors directly impact the cost of new equipment.
Tariffs on imported steel, aluminum, and critical components add thousands of dollars to the price of a new truck, and these increases are often passed down the supply chain. By hesitating and sitting on the sidelines, companies are essentially guaranteeing that their future capital outlay for new trucks will be higher. The ‘wait and see’ approach risks paying more tomorrow for what could be ordered at a better price today and delivered sooner.
Safety and compliance as supply chain priorities
Beyond the immediate financial drain, an ageing fleet poses significant safety risks. Modern fleet equipment isn’t just about capacity—it’s about safety, compliance, and continuity. Features like predictive cruise control, adaptive braking, and automatic tire inflation systems are no longer luxury add-ons but essential tools for accident prevention.
Predictive cruise control, for example, uses GPS and mapping data to optimise speed based on topography, reducing sudden acceleration and braking, which in turn significantly improves fuel mileage. Adaptive braking systems automatically adjust stopping power and maintain safe distances, drastically reducing the likelihood and severity of collisions.
Advanced Driver Assistance Systems (ADAS) offer a powerful dual benefit: they enhance safety by mitigating human error and simultaneously drive down operational costs. ADAS can reduce collisions by a significant margin, with some reporting a 47% reduction since widespread adoption. Furthermore, adaptive cruise control and predictive gear shifting optimise vehicle performance and fuel consumption, leading to improved fleet fuel efficiency and reduced emissions.
Investing in these technologies is not just about compliance; it’s about creating a safer working environment for drivers, protecting valuable cargo, and safeguarding the company’s reputation, all while contributing to a more predictable and resilient supply chain.
Strategic fleet modernisation as a procurement win
The prevailing ‘wait and see’ strategy, the c-suite’s go-to game plan in uncertain times, fundamentally misjudges the current economic landscape. Everything is changing, and it is changing rapidly. The global economic barometer might be mixed, but companies still have an obligation to their customers, constituents, investors, and employees to operate their fleets as competitively as possible. Procurement leaders should treat fleet upgrades as strategic investments in supply chain performance.
Newer trucks, particularly those in a flexible lease program, are unequivocally better, safer, more efficient, and can provide business agility toward the bottom line. They offer reduced fuel consumption, lower maintenance needs, and access to cutting-edge safety features. To overcome the ‘hesitation tax’ and accelerate fleet modernization while controlling risk, organisations should consider:
- Competitive monthly costs: shifting from fixed, ‘all-in’ monthly expenses to an unbundled structure that allows fleets to evaluate finance types, as well as fuel and maintenance programs separately
- Reduced capital outlay: exploring flexible leasing options for diesel trucks that minimise upfront capital expenditure while providing access to modern equipment
- Maintenance and compliance support: leveraging nationwide partnerships that offer integrated maintenance and compliance services, offloading the burden and ensuring adherence to ever-evolving regulations
- Multi-year planning: a strategic multi-year procurement plan acts as a guide for executives, directing all aspects of equipment acquisition, maintenance, replacement, and lease surrender/remarketing. It allows organisations to anticipate and prepare for future needs, technological advancements, and additional regulatory changes
Flexible leasing programmes also offer additional benefits toward the bottom line right now, primarily due to the restored 100% bonus depreciation rate from the US President’s Big, Beautiful Bill. Bonus depreciation, which is commonly referred to as additional first-year depreciation, is a favourable taxpayer incentive to encourage businesses to invest in qualifying property. This change directly impacts companies because their immediate tax write-offs are considerably reduced.
While the Section 179 deduction remains a valuable tool for direct expensing up to $1,250,000, its benefit is often overshadowed by the larger scale of truck acquisitions, where bonus depreciation is used to play a critical role in minimising taxable income. This means the upfront tax advantages of owning a fleet are now less compelling than they once were.
For many organisations with heavy-duty fleets, leasing is a more attractive option. Companies that opt for a true operating lease don’t directly claim depreciation on the trucks; instead, they can deduct the entire lease payment as a business expense. This offers a consistent, predictable tax benefit that isn’t subject to the fluctuating rates of bonus depreciation.
Sitting on the sidelines is not a business strategy; it is ruining the brand. The longer companies hesitate, the greater the chance they will pay more tomorrow due to persistent tariff threats and inflationary pressures. Accelerating fleet modernisation is not just about avoiding future costs; it’s about seizing the opportunity to gain a competitive edge today, ensuring operational resilience, and fulfilling the core responsibility of delivering products efficiently, safely, and fiscally responsibly. The cost of inaction is too high to bear.
Brian Holland, CPA, CTP, CLFP, is the President and CEO of Fleet Advantage, an innovator in specialty financing, fleet data analytics, fleet management services, and life cycle cost management.
