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ATRI report says motor carriers’ marginal cost per mile rose 6 percent in 2017

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ARLINGTON, Va. — With economic activity strengthening in 2017, the average marginal cost per mile incurred by motor carriers increased 6 percent to $1.69, according to the American Transportation Institute’s 2018 update to “An Analysis of the Operational Costs of Trucking,” which was released Tuesday.

Using financial data provided directly by motor carriers throughout the country, this research documents and analyzes trucking costs from 2008 through 2017, providing trucking industry stakeholders with a high-level benchmarking tool and government agencies with a baseline for future transportation infrastructure improvement analyses.

ATRI said cost increases were broad-based in 2017, with growth in nearly every major line-item over the year.

However, even though the year-over-year average marginal costs per mile increased both in 2016 and 2017, it is lower than it was in 2014, when the costs per mile was $1.703.

Driver wages increased for the fifth consecutive year. The combined cost of driver wages and benefits represent 43 percent of the overall cost per mile.

The ATRI report noted that driver compensation, inclusive of wages, benefits and bonuses, has been the biggest source of cost increases incurred by motor carriers since 2012.

Even when overall marginal costs were declining due to falling diesel fuel prices, increases in driver wages and benefits served as mitigating factors.

At the same time, driver bonuses, while not a marginal cost, have been robust as carriers seek to entice new entrants into the industry, retain their existing workforce, and reward drivers for excellent safety and operational performance.

The driver bonus cost center is growing quickly is in the amount and types of bonuses employers offer to drivers.

A growing majority (62.7 percent) of respondents indicated that they pay drivers some type of financial incentive or bonus beyond wages.

Survey respondents listed their most common incentives and bonuses as safe driving, on-time delivery performance, and additional financial incentives to attract and retain qualified drivers.

Respondents reported paying drivers an average bonus of almost $1,300 for safe driving in 2017, a decrease from the $1,500 paid out to drivers in 2016.  On the other hand, drivers who met the criteria for on-time delivery bonuses were rewarded handsomely in 2017, receiving an

average annual bonus of approximately $2,500, well above the rate of $1,950 observed in 2016.

With respect to future driver compensation, the survey report said that while the freight market in 2017 saw freight demand improvements from 2016, the freight market has boomed in 2018.  With this strong demand for truck transportation, the report said, shippers are experiencing severe truck capacity constraints due in part to the driver shortage.

Numerous reports indicate that carriers have had to increase driver pay and expand benefits packages yet again in 2018 in an effort to recruit and retain truck drivers.  Additionally, a majority of motor carriers now offer sign-on/stay-on bonuses to improve recruitment and retention efforts, while other carriers have been forced to raise their bonus offers to remain competitive.

As a result, the overall compensation package offered to drivers can be expected to improve further in 2018, boosting the related line-item marginal cost centers.

Fuel prices rebounded from decade-lows and the growing cost and sophistication of newer truck models continues to drive up costs for both purchasing and repair and maintenance.

There is a significant variance on fuel costs when broken into fleet size.

Fleets with more than 1,000 power units averaged 31.3 cents per mile while fleets with between 251 and 1,000 power units averaged 31.8 cents per mile.

Those figures compared with an average of 46.1 cents per mile for fleets with 26-100 power units and 43.6 cents for fleets with between 101 and 250 power units.

At the time of the report was released, national diesel prices were $3.26 per gallon, up 23 percent from the average price observed across 2017.

Diesel prices are projected by the EIA to remain near this level for the remainder of the year.

Although fuel prices are known to be highly volatile due to geopolitical concerns and unpredictable supply disruptions, it is clear that motor carriers can expect fuel costs to continue to exert upward pressure on overall line-item marginal costs in next year’s report.

Overall, motor carrier operational costs have now surpassed the 10-year average since ATRI began its annual Ops Costs research.

The average marginal costs per hour increased to $66.65 in 2017, compared with $63.66 in 2016.

ATRI’s 2018 report also includes a new “Industry Sector in Focus” analysis, this year reporting operational costs for tank fleet operators.

“ATRI’s Operational Costs research is such a powerful tool for fleets of all sizes. Better understanding how our costs stack up against our industry peers enables us to implement operational efficiencies and improve our bottom line,” said Dean Kaplan, CEO of K-Limited Carrier.

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ES releases agenda for Success in Trucking Expo

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FedEx Custom Critical, Forward Air and Panther Premium Logistics, a service of ArcBest, are the exclusive motor carriers at the June 7-8 event to be held at the Indianapolis Motor Speedway complex. Pro Football Hall of Famer Anthony Muñoz will serve as the keynote speaker for the event. (Courtesy: ES)

MEMPHIS, Tenn. — ES, which offers capacity solutions and ownership opportunities within the trucking industry, has released programming details for the company’s inaugural Success In Trucking Expo (SITE), which will take place June 7-8 at the Indianapolis Motor Speedway complex.

The two-day agenda for the SITE has been designed specifically for professional drivers, owner-operators and fleet owners who have a desire to explore ownership opportunities or grow current operations, according to ES CEO Paul Williams.

Ellen Voie, the President & CEO of the Women In Trucking Association, is among an list of industry experts who have committed to participate in the SITE for 2019. Voie will be a part of an industry panel discussion that will bring together trucking experts, contract professional drivers, truck owners and fleet owners who are part of the ES Community. Among those joining Voie on the panel will be Brian McCoy, president of Stoops Freightliner, and Leah Shaver, the chief operating officer of the National Transportation Institute. The panel also will feature Chris Moran, Freightliner district sales manager, from Daimler Trucks of North America and Colton Lawrence, CEO of EQUINOX Owner-Operator Solutions.

Anthony Muñoz, a member of the Pro Football Hall of Fame and an entrepreneur with a long record of success for making a positive impact within Cincinnati and the surrounding communities, will highlight the opening session for the SITE, serving as the keynote speaker on the evening of June 7. The panel discussions and the presentations by the carriers participating in the SITE will take place the following day.

The ES Community motor carriers participating in the SITE will be FedEx Custom Critical, Forward Air and Panther Premium Logistics, a service of ArcBest. These three companies will be the exclusive motor carriers at the SITE, and each company will have a representative who will be making a presentation during the expo. Mike Abood, FedEx Custom Critical’s managing director of fleet operations, Nick Burch, Panther’s director of owner-operator recruiting, and Ryan Gilliam, Forward Air’s vice president of recruiting, have been chosen by their respective carriers as speakers for the 2019 SITE.

The attendees also will hear a presentation from Paul Williams and ES President Jason Williams, which will take place prior to the event’s final ride-and-drive session, which will be hosted by 2019 SITE Title Sponsor Stoops Freightliner.

“Over the past several months, we have been working very diligently to develop an event and programming for the Success In Trucking Expo that will be meaningful and have a positive impact for professional drivers interested in ownership as well as current owner-operators and fleet owners who are looking to grow their businesses,” said Jason Williams. “With the group of experts who will be coming to our SITE stage at the Indianapolis Motor Speedway complex, we are confident that everyone joining us for the inaugural edition of the SITE will take away the kind of knowledge and perspective that they will find helpful as they move forward in their trucking careers.”

In addition to participating in the industry panel discussion, Voie will be hosting the June 8 edition of her Women In Trucking Radio Show live and on location from the SITE. The WIT Radio Show is broadcast live every Saturday on SiriusXM’s Road Dog Trucking Radio channel from 11 a.m. to 1 p.m. Eastern time.

One of the unique features about the SITE is that ES is offering free hotel accommodations and free meals for pre-qualified expo registrants. A limited number of those slots are currently available for the event, and attendees receiving them will be chosen from the registration submissions ES receives. To learn more about registration for the SITE and the programming planned for the event, visit SuccessInTruckingExpo.com.

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Fleets, truck operators can bid online for Kenworth sale to benefit TAT

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KIRKLAND, Wash. — After a successful 2017 “Everyday Heroes” Kenworth T680 auction, Truckers Against Trafficking (TAT) anticipates even greater results when its second Everyday Heroes truck is auctioned at Ritchie Bros in Phoenix on Friday.

Proceeds from the sale go directly to TAT, a 501(c)3 non-profit devoted to stopping human trafficking by educating, mobilizing, and empowering the nation’s truck drivers and rest stop employees.

“Human trafficking is a terrible crime that affects millions in the United States each year, and the trucking industry can – and is – making a difference,” said Don Blake, new truck sales manager at Inland Kenworth – Phoenix and TAT board member. Blake is the driving force behind the Kenworth T680 auction. “The winning bidder for the Everyday Heroes Kenworth T680 will help fund Truckers Against Trafficking and increase awareness of human trafficking and TAT’s mission to end it. We look forward to a successful auction,” he said.

“Fundraising events, such as the Everyday Heroes auction, truly brings the trucking industry together to achieve a common goal,” said Kurt Swihart, Kenworth marketing director. “The contributions Don Blake has made to make this auction happen is truly admirable. Because of Don, we are able to join forces with others in the trucking industry to fight against human trafficking through the auction of this special Kenworth T680. The money raised from this event will help Truckers Against Trafficking continue to bring justice to those being trafficked.”

The special Kenworth T680 is fully loaded with a 76-inch sleeper, 485-hp PACCAR MX-13 engine, and PACCAR 12-speed automated transmission.

“Many of the companies that helped make our 2017 Everyday Heroes truck possible stepped up to the plate again through monetary and equipment donations for this year’s truck,” Blake said. “This fundraising event for Truckers Against Trafficking wouldn’t be possible without our sponsors’ support.”

In 2017, Mike Jimenez, owner of Phoenix-based J&L Transportation submitted the winning bid for the Everyday Heroes Kenworth T680 that was auctioned. The bid resulted in an $83,000 donation to TAT, the largest single donation to the organization.

“We were able to generate a significant donation through the auctioning of our last Everyday Heroes truck, and our hope is that we can surpass that mark this year,” Blake said. “Truckers Against Trafficking is an incredible organization, and we as a trucking industry can make a difference in bringing the crime of human trafficking to an end.”

Interested parties can bid on the truck online, by proxy or in person. Bidders can register in advance at (www.rbauction.com/heavy-equipment-auctions/phoenix-az-2019184). Interested parties also can obtain online buying information  (www.rbauction.com/buying/how-to-buy/online), or call Ritchie Bros. at (602) 269-5631 for assistance. For those able to attend the auction, Ritchie Bros. is located at 5410 W. Lower Buckeye Road in Phoenix.

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ACT: Preliminary used Class 8 volumes fell M/M, Y/Y and YTD in April

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April 2019 used Class 8 truck sales yielded a 13% decline compared to April 2018, as well as a year-to-date drop of 16%. (ASSOCIATED PRESS)

COLUMBUS, Ind. — Preliminary used Class 8 volumes (same dealer sales) fell 5% month-over-month in April, following an uptick in March, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research.

Additionally, the report indicated that longer-term comparisons yielded a 13% decline compared to April 2018, as well as a year-to-date drop of 16%.

Other data released in ACT’s preliminary report included year-over-year comparisons for April 2019, which showed that average prices rose 14%, while average miles and age were relatively flat.

“Recent conversations with market contact suggest dealers are very aware that conditions are changing. Auction and wholesale volumes, as well as pricing, are softening,” said Steve Tam, v vice president at ACT Research. “Some used truck buyers and sellers are paying close attention, but others may be only casually aware of any looming concern. Most truckers have yet to make the leap, as signified by retail markets that are outperforming their dealer counterparts.”

ACT’s Classes 3-8 Used Truck Report provides data on the average selling price, miles and age based on a sample of industry data. In addition, the report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs — Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo).

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. More information can be found at www.actresearch.net.

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