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Trucking fuel costs and retail pump prices aren’t marching in lockstep

Comparison between ATRA data and retail numbers shows fuel costs are moving slower on the retail way up and faster on the retail way down

Photo: Jim Allen/FreightWaves

Even as the cost of diesel is a topic of endless concern and discussion in the trucking sector, an annual release of cost data from the American Transportation Research Institute (ATRI) reports can be seen as showing that the all-in cost of fuel for truckers is set by factors other than the price at the pump.

ATRI, the research arm of the American Trucking Associations, released its report last week. The report is separate from the driver pay report released by ATA on the same day.

While ATRI said it had a record number of respondents to its cost survey, its breakdown does not correlate closely with the industry structure. For example, ATRI said that while truckload carriers account for 56.5% of the industry, truckload carriers made up just 26% of respondents. An inverse situation exists for LTL carriers: 29.3% of the industry and 55.5% of the respondents. The “other/specialized” category is 14.2% of the industry and 18.5% of the respondents. 

The data is through 2021, so it does not capture the enormous run-up in fuel prices this year but does reflect the stronger retail fuel market of 2021. The report lists data going back to 2012, so it gives perspective on long-term trends as well as those in recent years.

That 10-year comparison is the more interesting look at cost structures and the impact that fuel has had on them. 

The average marginal cost per mile for fuel, according to ATRI, was 41.7 cents per mile in 2021. In 2012, it was 64.1 cents per mile, a drop of 19.3 cents and a percentage decline of 34.9%.  

But not all of that increase in fuel costs as estimated by ATRI can be attributed to the price at the pump. The average retail cost of fuel in 2012, based on an averaging of the weekly Department of Energy/Energy Information Administration retail diesel price, was $3.97 per gallon. In 2021, that average was $3.29, for a decline of 17.1%. And yet fuel costs were down almost 35%, presumably a reflection of significant gains in fuel efficiency over that time. 

ATRI’s cost data also reflects average cost per hour of time on the road. That fell by a slightly lower rate than the decline in average fuel costs measured by mile. Fuel costs per hour dropped to $16.78 from $25.63 in 2012, a decline of 34.5% versus the 34.9% in cost per mile.

While 2021 pump prices are nowhere near the sky-high average of 2022, which sit at $4.95 for the year through last week’s DOE/EIA price, prices that year were significantly above 2020, when the pandemic kept prices in check with an average of $2.55 for the year. 

ATRI reported the average marginal fuel cost per mile in 2020 was 30.8 cents per gallon, for a 35.3% increase between 2020 and the 2021 figure of 41.7 cents. But the increase at the pump was just 29%, possibly as a result of the slowdown in truck speed. That situation — in which the fuel cost rose more than the pump price — is the opposite of what happened over the 2012-2021 comparison. 

ATRI noted in discussing its survey data that the average truck speed was different in 2021 than 2020, a possible factor in some of the changes. The truck-based GPS-based speed metric for 2021 was 40.24 miles per hour. “This figure is 0.4 mph lower than in 2020, when less traffic and fewer slowdowns due to the COVID-19 pandemic led to unusual higher speeds,” ATRI said. But it added that the 2021 speed was 0.8 mph more than the “average speed metric” in 2017-2019.

The ATRI survey has a large amount of data for other areas of the trucking cost foundation. 

Although the ATA survey on driver pay provided total compensation figures, the ATRI data is more granular. In the 10-year table of data on driver wages, there was only one year — between 2018 and 2019 — when driver wages fell. That decline was about 7%. 

And the year that had the largest increase in driver wages over the last 10 was, not surprisingly, 2021, when the average cost per mile for driver wages rose 10.78% to 62.7 cents per mile from 56.6 cents per mile. The second-largest increase during that time came between 2014 and 2015, when an 8% increase took the hourly wage up to 49.9 cents per mile from 46.2 cents per mile. 

But while driver wages get most of the attention, driver benefits actually have risen more on a percentage basis, according to ATRI. 

While the hourly driver wage per mile rose 50.4% between 2012 and 2021, the average hourly benefit climbed 56.9%, according to ATRI data. But those year-to-year benefit numbers are more volatile. For example, in the last 10 years, there were three years when the average benefit on a per-mile basis went up double digits percentage-wise; there was also one year when it went down 10%. 

In 2021, while average driver pay was rising 10.7% on a per-mile basis, driver benefits were up 6.4%. 

Beyond wages and fuel, the two largest cost categories for trucking, the 10-year decline in fuel costs per mile — driven not only by lower costs at the pump but also improved fuel efficiency — stood in contrast to virtually every other cost category tracked by ATRI.

Two relatively small areas showed a 10-year decline: permits and licenses, which went to 1.6 cents per mile from 2.2 cents per mile, and tires, which dropped to 4.1 cents per mile from 4.4 cents per mile.

Other areas and their 10-year cost increases: 

  • Truck/trailer lease or purchase payments were up to 27.9 cents from 17.4 cents, a gain of 60.3%.
  • Repair and maintenance went up to 17.5 cents from 13.8 cents, a gain of 26.8%.
  • Truck insurance premiums were up to 8.6 cents from 6.3 cents, a gain of 36.5%.
  • Tolls went up to 3.2 cents from 1.9 cents, a gain of 68.4%.

(The Bureau of Labor Statistics says a good costing $1 in January 2012 would have cost $1.23 at the close of 2021, for a 23% inflation rate. That figure was obtained by FreightWaves and was not supplied by ATRI.)

The all-in trucking cost estimated by ATRI in 2021 was $1.855 per mile, up from $1.633 per mile. That is a gain of 13.5%, and with virtually all other categories up higher than that 23% inflation rate in 10 years, it’s accurate to say that the drop in fuel prices and improved mileage has been the primary reason why the cost of operating a truck on a per-mile basis trailed inflation during those years.  

However, much of that increase in overall costs came just between 2020 and 2021. The 2021 $1.855 per-mile figure, at the close of the 10-year survey period, is a whopping 12.6% gain in just one year, primarily due to higher fuel costs. But between 2012 and 2020, costs were largely where they started from in 2020, as 2020 stood at $1.646 per mile compared to $1.633 per mile in 2021.

The big fluctuations year to year are mostly caused by fuel costs. For example, the all-in cost in 2018 was $1.821 per mile, up from $1.691 per mile just a year earlier. Wages were up about 4 cents but fuel costs were up 6.5 cents during that year. 

But in 2019, the all-in cost dropped back to $1.699 per mile, as fuel costs declined about 5 cents and, surprisingly, repair and maintenance dropped more than 2 cents.

While the all-in figures include private fleets, as a result of an agreement between ATRI and the National Private Truck Council, there is data in the report that separates out the two. For example, between 2020 and 2021, while driver wages were up 10.8% and driver benefits were up 6.4% at for-hire carriers, at private fleets the corresponding numbers were 14.7% and 19.2%.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.