The costs of operating a for-hire Class 8 truck rose 7.7% in 2018, the biggest jump since 2010 and the highest per-mile cost since the American Transportation Research Institute (ATRI) began tracking the data in 2008.
The average marginal cost per mile rose to $1.82 last year, according to ATRI's analysis of for-hire truckload (TL), less-than-truckload (LTL) and specialized fleets. The independent research organization divided the costs into buckets related to the vehicle and to the driver based on financial data from motor carriers.
Operations in the Northeast cost the most at $1.96 per mile, which the study said included greater congestion from concentrated populations, as well as tolls. The average operational cost in the West was $1.81 per mile, which the study said was impacted by congestion in coastal areas and longer trips overall.
The Midwest was in the middle of the pack at $1.73 per mile. The lowest was $1.58 per mile in the Southwest followed by $1.68 in the Southeast.
Vehicle-based costs include fuel, truck lease or purchase payments, repair and maintenance, insurance premiums, licenses, tires, and tolls. Fuel costs rose 17.7% year over year to 43.3 cents a mile from 36.8 cents a mile. That accounted for 24% of total average marginal costs. Every truck-related cost rose except tires, ATRI said.
Repair and maintenance costs rose to 17.1 cents per mile in 2018, which ATRI said was counterintuitive because sales of new trucks and trailers set records. Class 8 tractor sales rose 32.1% in 2018, ATRI said.
Driver-based costs include wages and benefits, both of which rose as freight demand outstripped available drivers and equipment. Drivers accounted for 43% of the average marginal costs for carriers.
Starting wages of for-hire truck drivers averaged 48.5 cents per mile, with an average maximum per-mile wage of 51.7 cents. In private trucking, only 34% of drivers were paid per mile.
Source: American Transportation Research Institute
Driver Shortage Vs. Driver Pay
Some suggest higher pay and better working conditions would attract more people to long-haul trucking, which can keep a driver away from home for weeks at a time. The American Trucking Associations (ATA) estimated the industry was short 60,000 for-hire drivers in 2018.
Driver shortage ranked No. 1 on ATRI's industry critical issues list released Oct. 6.
Over-the-road truckers are most in demand. During the peak of the freight demand last year, companies poached experienced drivers from competitors with large sign-on bonuses.
Many companies increased per-mile pay to drivers at least twice, while some tried pay minimums with bonuses, according to the National Transportation Institute, which conducts quarterly surveys on driver pay.
For-Hire Vs. Private
Operating costs for private fleets were 48-72% higher than for-hire operating costs. The National Private Truck Council (NPTC) found the overall average operating cost for private fleet trucks ranged between $2.69 and $3.14 — depending on mileage.
Seventy percent of carriers offered some type of bonus in 2018. The most common incentives were safety, starting and retention bonuses.
Four in five private fleets offered some type of safety bonus, 63% provided new-hire referral bonuses, and 52% offered compliance bonuses. Fuel economy and reduced idle time also were rewarded.
Empty or dead-head miles were higher among private fleets, in which only six in 10 have for-hire operating authority to move others' products. Approximately 28% of private fleets operated dead-head miles vs.16.6% in ATRI's for-hire sample.
Private fleets trade in equipment a little faster — an average of 6.5 years — than for-hire owners at 6.96 years.
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