On October 18, The American Transportation Research Institute released its annual “Analysis of the Operational Costs of Trucking” report. And for the second year in a row, the study found that drivers’ wages, not fuel, was the single largest expense incurred by carriers.
ATRI has produced the report since 2008, using financial data provided directly from motor carriers throughout the country. Using written surveys, ATRI collected data from a cross-section of truckload, less-than-truckload and specialized carriers from all 50 states, then weighted survey responses to reflect actual industry shares of the major for-hire trucking sectors.
This year’s report compares trucking costs going back to that first report in 2008 through 2016. Costs are broken down into individual categories for each year, allowing for analysis of a given year and for year-to-year comparisons. The statistics are also broken down by carrier type and geographic regions.
According to the survey, the national average marginal cost per mile (CPM) in 2016 was $1.592, up about 1 percent from $1.575 in 2015. Regionally, the 2016 CPM varied from $1.70 in the West to $1.54 in the Midwest region, and from $1.42 for truckload to $1.83 for specialized carriers.
ATRI, in releasing this year’s report, noted that drivers’ wages were the largest single cost throughout trucking in 2016. This was also the case in 2015, the first time that wages displaced fuel as the single largest expense. In 2014, driver wages and benefits combined surpassed fuel costs for the first time since the survey began.
As the survey explains, this reflects two trends in recent years: a decline in the price of diesel fuel and an increase in driver compensation. Fuel costs dropped 17 percent between 2015 and 2016, while driver wages and benefits rose 5 and 18 percent, respectively.
Fuel prices have fluctuated dramatically since the study began, peaking at almost $4.80 per gallon in the summer of 2008 before nosediving to roughly $2 per gallon by March 2009. Since 2014, the emergence of U.S. shale oil has caused diesel prices to plummet, reaching a bottom price of $1.98 in February 2016 and gradually rising ever since. At the time of this latest report, diesel fuel was $2.79 per gallon, having recently risen due to the impact of Hurricane Harvey in Texas.
Specialized carriers had the highest fuel CPM in 2016 at 36.5 cents, followed by LTL carriers at 34.8 cents, and TL carriers at 31.8 cents.
Fuel costs had consistently been the biggest line-item expense since ATRI began doing this research, and generally has accounted for between 30 to 40 percent of motor carriers’ CPM. For 2016, fuel only accounted for 21 percent.
The report shows that as fuel prices have fluctuated, driver wages and benefits have been steadily on the rise since 2012. Combined, they now account for 43 percent of costs.
The report explains that much of the rise in driver compensation is due to “the much-discussed shortage of qualified drivers, a shortage that continued to plague the industry in 2016.”
Survey respondents indicated that average truck driver pay per mile was 52.3 cents in 2016. Driver benefits per mile increased from 13.1 cents per mile in 2015 to 15.5 cents per mile in 2016 – a sizable year-over-year increase. This indicates that in addition to offering higher pay, carriers recognize that benefits and other indirect rewards and incentives can play a critical role in driver recruitment and retention.
About 60 percent of respondents indicated paying their drivers some type of financial incentive or bonus beyond wages. The incentives and bonuses reported by respondents rewarded drivers for safe driving, on-time delivery performance, as well as additional financial incentives to attract and retain qualified drivers.