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Trucking Gas Bill Shrinks, but Operational Costs Rise

Trucking Gas Bill Shrinks, but Operational Costs Rise

The American Transportation Research Institute (ATRI), a nonprofit research branch of the American Trucking Associations released their annual Operational Costs of Trucking report on Sept 28th. According to their research, though trucking companies spent less on fuel in 2014 than they have in the past, they didn’t see any extra money in the bank. Carriers are shelling out more money for rising driver wages and equipment upgrades to their fleets, which more than offset anything savings they gained on lower fuel costs.

ATRI surveyed carriers whose tractor and truck fleet sizes added up to 54,833 and who traveled about 5.3 billion miles. The research group gathered the financial data from these companies to analyze for the basis of their study, which gives motor carriers an idea of what is standard across the board in the trucking industry. Government agencies can use the report to plan for future improvements in infrastructure and when making new regulations in transportation.

It shows that last year, the average marginal cost-per-mile for carrier operations saw a three cent rise over 2013’s numbers, to $1.703, which was an increase from $1.676. ATRI research shows that the increase was chiefly accredited to greater equipment purchases and increased driver pay, a trend which is likely to continue. “Due to an economic-based freight demand increase, and growing repair and maintenance costs, carriers are moving quickly to replace older equipment,” the report said. “In turn, the additional insurance costs associated with those purchases, along with increasing driver pay to recruit and retain their drivers, it is likely that the trucking industry will continue to see overall operating costs rise in spite of projected fuel price decreases.”

Fuel was 58.3 cent per mile, which kept it at the top of the list as the largest per-mile cost, but prices did drop almost 10% to 58.3 cents per mile, the lowest it’s been since 2010. Though fleets saved money on fuel, they spent it on other operating costs. Trucking companies are buying and leasing more efficient tractors and trailers as well as ones with new technology that the government has begun to mandate, like electronic logging, which rose 10% over last year. These acquisitions increased almost 32% over last year, making 2014 the second highest year on record for Class 8 truck orders, with 375,000 new orders. New orders in turn led to higher insurance premiums, which rose about 11%. Costs for maintenance and repairs rose about 7%; more complex engines means more cost.

Behind fuel, drivers’ pay was the second biggest expenditure for trucking companies, rising to 46.2 cents per mile, a 5% increase. Last year, expenses for wages also rose by 5% which we can

attribute to carriers hiring new drivers, seeking to do their part to help decrease the estimated 30,000 drivers needed in our nation. Company executives are having to make substantial investments to recruit and retain drivers, such as larger incentives and increased per-mile pay.

Brad Delco, a transportation analyst with Stephens Inc., said, “The single greatest inflation of cost pressure we’ve seen in trucking the past two years has been driver wages,” Delco said. “You’re talking about 10 percent driver wage increases, and it represents about 25 percent of your cost structure. It’s a big deal.”

There has been almost 10,000 requests for the Operational Costs of Trucking report since its inception in 2008 and is one of the most popular ATRI studies. Brenda Neville, a member of ATRI’s Research Advisory Committee and President and CEO of the Iowa Motor Truck Association commented, “ATRI’s release of its annual Operational Costs of Trucking research is among our association members most eagerly anticipated. They understand and appreciate the value of ATRI’s operational cost analysis to their own fleet benchmarking and as such, are always willing participants when ATRI issues its call for cost data.”

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