Early returns from NPTC survey provide glimpse of private fleet operations

 A Walmart worker loads a trailer inside a distribution center. Private fleets can provide significant value to their broader organizations, but they still must compete for business, which is why customer service ranks so high as a top concern. ( Photo: Walmart )

A Walmart worker loads a trailer inside a distribution center. Private fleets can provide significant value to their broader organizations, but they still must compete for business, which is why customer service ranks so high as a top concern. (Photo: Walmart)

Cautioning attendees that the data was still preliminary and that fleets were still responding, Tom Moore, vice president of the National Private Truck Council (NPTC), offered a glimpse inside some of the early returns on the organization’s annual Private Fleet Benchmarking Survey.

Noting several instances where he thought the early data may not match up with the final data, Moore walked attendees through some of the key points and early trendlines the survey is showing, including how a fleet can use the results of the final survey, expected to be published on Aug. 1, 2018, to analyze their costs and show the value of their fleet operation to the broader organization.

“Just because your cost of operation is 20 cents more or less [than the survey average], doesn’t mean you are better or worse,” Moore reminded attendees at the luncheon on the final day of the NPTC 2018 conference in Cincinnati on Wednesday.

The survey, which is sponsored by PeopleNet, asks NPTC member companies to answer a series of questions on their operations. The survey is quite lengthy, Moore said, which helps provide a great bit of information that member fleets can use going forward to benchmark their own operations.

All the survey answers are based on 2017 performance.

Private fleets continue to list customer service as the top reason for the existence of their fleet operations. This year, though, the survey has found that nearly 50% of fleets noted cost control and capacity as reasons also. “We’ve never seen that capacity number so high,” Moore noted. Five years ago, those numbers were below 20%. “You’re doing a better job in [controlling costs] and getting a competitive edge.”

The survey also found another trend developing among the private fleets – more than 60% now measure customer comments in some way. Delivery windows are also opening up, reflecting changes in operations, with only 46% of respondents to date saying their windows are within 60 minutes – 23% of those are within 30 minutes. “More fleets are working with their customers on what makes a good customer delivery,” Moore observed.

Like their for-hire brethren, private fleets face many of the same issues, but they place different priority to them. Driver issues and customer service are the top two issues facing private fleets, they report, followed by cost, regulations, safety and for-hire capacity. Almost 90% of fleets to date listed driver issues as a concern.

On the demographic data for private fleets, about 30% of respondents utilize rental units in some portion of the fleet, and about 30% incorporate medium-duty units with the average fleet running about 100 medium-duty units. This is a number that Moore believes will rise in future years as e-commerce continues to drive change in the industry.

On Class 8 units, the average private fleet vehicle is now traveling between 95,000 and 96,000 miles per year. That is down from slightly over 100,000 in the previous survey.

Many people believe private fleets are a given to haul their parent company’s freight, but that is not always the case. In fact, according to the preliminary results of the NPTC survey, only about 70% of outbound loads are hauled by the company’s private fleet, with 69% of those being delivered straight to a retail location and 24% to a distribution center. Those loads are traveling an estimated 245 miles to stores and 318 miles to distribution centers.

“Private fleets are typically doing a better job in finding freight that fits their system and taking advantage of that,” Moore said, noting for-hire fleets typically travel 410 miles to retail locations.

Like for-hire fleets, private fleets are also interested in reducing empty miles. About 75% of private carriers have for-hire authority and report 25% empty miles, which is up from 2016 when it was about 20%, Moore said. However, that empty mile percentage may not be an accurate reflection as it appears that about half of those empty miles are not available to haul loads due to operational characteristics.

“I don’t look at that as significant with the capacity constraints,” Moore suggested. “It’s more important for many of you to get that equipment back [and loaded again] rather than chasing loads.”

Most private fleets hire company drivers with 93% reporting they use company drivers and 5% leased operators. Moore thinks when the final numbers come in, that leased percentage will increase. He also said a trend in recent years is an increase in the number of owner-operators utilized, although that percentage is still only about 1% of drivers. Fourteen percent of private fleets are utilizing team drivers, but like for-hire fleets, the average age of drivers remains high at 50 years – about the same level it has been for the past five years.

The fleets that have responded so far are reporting a 14% driver turnover rate and the average age of new drivers at 40.7 years. On the pay scale, private fleets (those reporting so far) are paying an average of $67,612 across all fleet drivers. Over-the-road drivers earn a starting pay of $70,285 and top $77,000 by year three. Regional drivers are slightly less at $60,973 and $67,830. Forty-four percent of fleets pay their drivers by the mile and 33% pay hourly.

Unlike for-hire drivers, though, private fleet drivers do more than just drive. An average 54-hour workweek features approximately 39.2 hours of driving, 5 hours of loading, 10 hours of unloading and 6.1 hours of additional tasks.

Benefits also tend to be more generous among private fleets, with a large selection of benefits commonly found in the private sector. Fleets are spending an average of 28% of 32% of a driver’s pay on benefit packages. There are also incentives offered at 79% of member companies averaging about 5% of pay and wellness programs at 92% of fleets.

Gary Petty, president & CEO of NPTC, concluded the benchmarking session by reminding fleets that they “can use the benchmark report for their own purpose [but] NPTC can also do customized reports for members.”

The final report will have more detailed information on these and other areas important to private fleets when it is published and presented to NPTC members on Aug. 1, 2018.