Today’s Pickup: Drivers are top cost for carriers

Good day,

Driver costs are the highest cost for fleets, surpassing fuel for the second year in a row, according to data from the American Transportation Research Institute.

The 2017 update to An Analysis of the Operational Costs of Trucking found that driver wages increased 5% and benefits jumped 18% in 2016 over 2015. The average marginal cost per mile was $1.59.

Survey respondents account for 85,305 truck-tractors, 4,359 straight trucks and 411,956 trailers and traveled nearly 9 billion miles in 2016. Of those miles, 19.5% were “non-revenue” or deadhead miles.

ATRI found the fuel cost per mile for carriers was 33.6 cents, the lowest the survey has ever recorded. Fuel accounts for just 21% of total carrier costs. Truck and trailer lease and purchase payments increased in 2016, to 25.5 cents per mile. Repair and maintenance costs also increased 1 cent from 2015 to 16.6 cents per mile.

Vehicles were also driven more in 2016. According to the survey, straight trucks drove an average of 17% more miles in 2016 than 2015 and tractors 28.5%.

Did you know?

According to a new Teletrac Navman Telematics Benchmark Report: U.S. Transportation Edition, 75% of fleets expect to be ELD compliant at the deadline, but 28% said they are doing nothing to address driver concerns of the devices.

Quotable:

“My job here is to make you feel uncomfortable, because I promise you, your customers are way ahead of you on FSMA [Food Safety Modernization Act] compliance. Understand that some 128,000 people are hospitalized and 3,000 die every year from food-borne related illnesses. Compare that to the 5,000 or so who die annually from texting while driving. So you need to understand that your customers are going to hold you to a way-higher standard than what the rules call for.”

– Don Durm, vice president of customer solutions for PLM Trailer Leasing, speaking at the 2017 International Foodservice Distributors Association

In other news:

YRC lowers earnings forecast

YRC Worldwide has lowered its revenue projections for fiscal year 2017, citing the impact of the hurricanes. (Reuters)

California Republicans seek to roll back gas tax hike

Republicans in California are taking aim at a gas tax hike that went into effect this year, hoping to repeal the tax. (CBS Los Angeles)

U.S. Bank index shows tighter truck market

U.S. Bank’s Freight Payment Index increased 8.3% in the third quarter over the second quarter, showing a tightening truck market. (Logistics Management)

New food safety rules could push shorter trailer trade cycles

New food sanitation rules now in effect could have an impact on how long refrigerated fleets keep their trailers, according to leading executives. (Fleet Owner)

Digital disruption hitting all industries

Analysts with global consulting firm Gartner said that digital disruption is impacting all industries now, creating new opportunities for those ready to adapt. (Supply Chain Brain)

Final Thoughts

The latest data from ATRI shows that driver wages and benefits continue to cost fleets more. For the second year in a row they represent the highest cost for fleets. That is unlikely to change in the near future as the driver shortage continues to worsen and could become even more problematic for carriers after the ELD mandate kicks in in December.

Hammer down everyone!

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