As usual, the American Transportation Research Institute is back with its annual analysis of the cost components of running a fleet of freight trucks, and as always the results are interesting.
The just released 2018 report, based on 2017 operating data from carriers, finds driver wages and benefits comprise 43% of marginal truck operating costs, the same as in 2016 but up from 40% in 2015.
Since 2008, ATRI has published “An Analysis of the Operational Costs of Trucking,” an annual report that provides detailed marginal cost data on motor carrier operations.
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| When it comes to marginal costs per mile driven, ATRI found it was $1.84 in the LTL sector and $1.49 for truckload carriers. |
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To gather the data, ATRI sent carriers a web survey, similar to previous questionnaires but with new questions. For example, carriers were asked this year to enter their total fleet mileage for 2017 as submitted to government carrier authority IFTA. Respondents were asked for the first time to provide the number of drivers employed by type of equipment (e.g., company drivers in a company truck, leased drivers in a company truck, and owner-operators). This question was added to capture the different types of employment arrangements that exist between drivers and motor carriers
Data collection efforts commenced in April 2018, with data collection forms being sent electronically to a representative group of for-hire carriers which included truckload (TL), less-than-truckload (LTL), and specialized fleets. ATRI also solicited carrier participation through targeted industry mailings and emails, a news alert, and coverage in major industry news outlets. Many of the 50 state trucking associations also solicited carrier participation from their respective memberships as well.
Participants were provided several options for submitting data to ATRI: utilizing the on-line response form, or transmitting the data to ATRI via email or fax. All responses were carefully reviewed by the research team for clarity, and the research team contacted respondents to clarify any ambiguous responses as needed. Responses were collected through the end of August 2018.
Due to the highly competitive nature of the trucking industry and the extreme sensitivity associated with corporate financials and expenditures, the operational cost information was collected confidentially from motor carriers, and the data is presented in aggregate form only. ATRI also provided respondents with non-disclosure agreements as requested.
ATRI does not list the total number of carrier respondents, but does provide various profiles of those participating.
For example, 43% of respondents were primarily truckload carriers, 36% LTL, and 21% other, which could be for example specialized carriers (e.g., expedited). Those numbers were a little different than industry data on percentages by segment, so ATRI weighted those responses they received to reflect those national numbers, where for example 52% of carriers are in the truckload segment.
There was a good mix of large, mid-sized and smaller carriers, with 55.3% of respondents being smaller carriers operating fleets with 250 or fewer power units. The remaining 44.7 percent of respondents were split evenly between carriers operating between 251 and 1,000 power units and fleets with 1,000 or more power units.
Interestingly, ATRI notes that as trip lengths across the industry continue to decrease, the respondents in this year's sample were again predominantly focused on local and regional pick-ups and deliveries where the average haul lengths were less than 500 miles per trip. An average of 62% of respondent trips were of the local and regional variety, up from 55% of respondent trips in the 2011 data sample.
The increase in local and regional truck trips has come at the expense of inter-regional trips, as 19% of the respondents' trips were inter-regional in 2017 compared to 26% in 2011. The remaining 19% of the respondents' trips were national or long-haul trips in excess of 1,000 miles traveled.
The survey's focus was primarily on components and sub-components of carriers' marginal costs per mile (CPM), which allows for comparative analysis across the different industry business models. In order to convert line-item CPM figures into marginal cost per hour (CPH) calculations, a GPS-generated, industry-vetted average operational speed of 39.42 miles per hour (MPH) was used in these calculations. It should be noted that this speed relates to moving trucks only, and includes all roadway speeds rather than solely highway speeds.
ATRI notes that truck mileage remains pretty low. For average loads at 80,000 pounds or more, for example, carriers reported achieving just 4.9 miles per gallon. Mileage rates were slightly better, around 6-7 MPG, at lower average freight weights.
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As usual, the analysis broke the carrier cost analysis into vehicle-related and driver-related factors. The money graphic, showing the cost breakdown by percentage, is shown below:
Source: ATRI
As can be seen, driver wages and benefits account for 43% of marginal truck costs, the same as in 2016. Fuel costs were next, at 22% of the total. Those fuel costs as a percent were way down from the 39% seen in 2012, as diesel costs remained low for most of 2017. That percent will surely be higher for next year's survey, with oil and fuel costs well up in 2018.
All told, marginal costs were up 6.2% in 2017. Driver wages were up 6.6% last year, while benefit costs rose a substantial 11.2%. Tolls, interestingly, were up 9.9% last year.
When it comes to marginal costs per mile driven, ATRI found it was $1.84 in the LTL sector and $1.49 for truckload carriers.
Interestingly, 20.7% of these miles were non-revenue or “dead-head” miles, up slightly from the 19.5% reported by respondents in 2016 and in-line with figures reported in previous years.
The full report is available from ATRI here: ATRI Carrier Cost Report 2018
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