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Trucking costs fell 9.3% in 2019 with industry contraction

Drivers saw bigger bonuses but less per-mile pay in 2019

A good rate is in the eye of the beholder

Slowing freight demand reduced line item costs to operate a truck in 2019, according to the American Transportation Research Institute (ATRI).

The average marginal cost per mile incurred by motor carriers in 2019 decreased by 9.3% to $1.65. But that was still 6 cents per mile higher than during the last freight softening in 2016. 

In 2019, trucking costs contracted from $1.821 to $1.652. The cost per hour fell to $65.11 from $71.78 in last year’s report. 

The economic softening, combined with lower fuel prices and other factors, decreased the marginal cost of trucking, ATRI said in its 2020 update to “An Analysis of the Operational Costs of Trucking.”

Driver bonuses shift compensation

At 32%, driver wages continued to be the single-highest line-item cost per mile. Drivers earned combined wages and benefits of 69.3 cents per mile, down from 77.6 cents per mile in 2018.

“However, bonuses for drivers universally increased, with retention bonuses showing increases of over 80%,” ATRI said in a press release. “While the cost per mile for total driver compensation fell, carriers are clearly addressing the driver shortage through other mechanisms.”

With a persistent shortage of drivers, retention bonuses rose 81.3% to $1,218 last year from $672 in 2018. Starting bonuses rose 18.2% and safety bonuses increased 10.9%.

Other findings:

  • The trucking industry hauled 11.84 billion tons of freight in 2019. That represented 72.5% of the total domestic tonnage in the U.S., a 1.1 percentage point increase from 2018. Record freight demand in 2018 gave way to a rapid softening in 2019 because of the impacts of Chinese and American tariffs on the U.S. trucking industry.
  • The average number of miles driven per year for truck-tractors increased 2.7% from 91,506 miles per year per truck in 2018 to 93,955 miles per year per truck in 2019. Private truck annual miles fell to 91,600 miles from the 2018 average of 96,000 miles. The average age of the trucks rose to 5.1 years in 2019 from 4.4 years in 2018.
  • Deadhead miles, in which a trailer is not filled for a return trip from a drop-off, increased from 16.6% of total miles in 2018 to 20.1% in 2019. That is a likely sign of the freight slowdown in late 2019. While it is easier to avoid deadheading on longer hauls in a wider geography, a trend toward shorter trips suggests future deadhead increases.
  • The use of alternative fuels rose 2 percentage points year over year. In 2019, approximately 15% of fleets used an alternative fuel. Compressed natural gas (CNG) accounted for at least one truck among 8.8% of carriers in 2019. Liquid natural gas was second at 6.3%. Battery-powered trucks were third, with 5% of fleets having at least one battery-powered electric truck.

17 billion miles of data

ATRI’s analysis from 2008 to 2019 is based on detailed financial data provided by motor carriers of varied fleet sizes in all sectors from May through September. The data included 188,029 trucks, consisting of 181,906 truck tractors and 6,123 straight trucks. The data includes 348,088 trailers of varying types. It represents over 17 billion vehicle miles traveled. 

The American Transportation Research Institute released its 2020 findings for the operational costs of trucking, which showed a 9% overall decline in across-the-board costs due to a contraction in freight demand in the latter half of 2019. (Source: ATRI)

The new report also includes a comparison of fleets with 100 or fewer trucks to fleets with more than 100 trucks.

“Given the chaos and volatility of freight markets these days, it is more critical than ever that trucking fleets closely monitor their cost centers,” Brandon Knight, principal of transportation for CliftonLarsonAllen LLP, said in the release.

Some new drivers will see $7,500 bonuses at YRC, New Penn and Holland 

Could trucking lower operational costs by matching tractors to trailers?

Trucking operational costs soared 7.7.% in 2018

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.