In this blog:
- Breaking Down the Research of Operational Costs
- Enhancing Cost Control with FMS
- Making Data-driven Decisions
Breaking Down the Research of Operational Costs
The trucking industry plays a vital role in transporting goods across the U.S. Over the years, the industry has evolved, embracing technological advancements and adapting to changing market conditions. In 2022, the operational costs of trucking reached a record high, surpassing $2.00 per mile for the first time.
Fuel costs accounted for a significant portion of the increase, rising by 53.7 percent to 64.1 cents per mile. Other cost centers, such as truck and trailer payments, repair and maintenance and driver wages, even experienced double-digit percentage increases. Overall, the cost of trucking, including fuel, increased by 21.3 percent in 2022 compared to the previous year.
Make-up of the Sample Group
The ATRI report represents a significant portion of the trucking industry, covering data from 169,770 truck tractors, 498,068 trailers and more than 13.6 billion vehicle miles traveled in 2022. The sample group includes fleets of various sizes, with the majority consisting of smaller fleets — reflecting the national trend — as fleets with 10 or fewer trucks make up the majority of motor carriers registered with the U.S. Department of Transportation (USDOT).
Regional Costs
The trucking industry is responsible for transporting the majority of domestic products in the U.S., with regional trucking remaining the most common trip length among fleets. According to the ATRI report, though, some regions are much more costly to operate in than others. The Southeast region became the most expensive region to operate in as a motor carrier in 2022, surpassing the Northeast, although carriers have experienced a leveling out of costs across regions in recent years by diversifying their operations to mitigate high costs.
Sector Costs
Different sectors within the trucking industry incur varying costs. The ATRI report found that truckload carriers had the lowest average total marginal cost, while specialized carriers had the highest. However, truckload carriers experienced the highest rate of increase in costs in 2022, while LTL carriers had the lowest rate of increase in costs.
On the whole, industry trends show fleets are improving at preventive maintenance (PM) and vehicle replacement and procurement practices. The industry experienced a 2.3 percent increase in Class 8 trucks from the previous year, while the average truck age decreased from 5.7 years in 2021 to 4.7 in 2022, contributing to lower repair and maintenance costs.
Enhancing Cost Control with FMS
Managing costs is a critical aspect of running a successful trucking fleet. ATRI’s report found that expenses not only rose in almost every cost center during the last year, some actually reached double-digit increases, including fuel, truck and trailer payments and repair and maintenance. To navigate these increases and improve cost control and financial stability, many trucking fleets are turning to fleet solutions like fleet management software (FMS).
Real-time Fuel Monitoring
The ATRI report shows a $.224 increase in fuel costs per mile from 2021 to 2022. While the market cost of fuel fluctuates, fleets can offset inflated prices by optimizing fuel efficiency. FMS provides real-time monitoring of vehicle usage and fuel consumption and allows fleets to quickly source the causes of fuel efficiency issues for both reduced fuel consumption and spend.
Maintenance and Repair Management
According to the ATRI report, from 2021 to 2022, the annual change of average operating costs per mile for repairs and maintenance increased 12 percent. Because it’s already one of the biggest cost centers for fleets, repair and maintenance cost control is critical. FMS fosters a proactive maintenance process by automating routine inspections intervals, tracking service histories and sending reminders for scheduled PM.
FMS also helps manage repair requests by streamlining communication between drivers, technicians and even third-party service providers. By centralizing this process, fleet managers can track repair costs, analyze trends and make informed decisions about repair and maintenance expenditures, helping to reduce downtime, improve asset safety and reliability and ultimately lower operating costs.
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Driver Performance and Safety
Driver behavior and safety play a significant role in cost control and operational efficiency. When integrated with driver management solutions, FMS provides driver performance monitoring, so fleet managers can identify areas for improvement and implement driver training programs accordingly. Through promoting safe driving practices, fleets can reduce the likelihood of accidents, vehicle damage and costly insurance claims.
Optimized Asset Usage
Balanced fleet utilization is another key cost control component for trucking fleets. Fleet managers and owners can reduce fuel consumption while increasing revenue per mile by minimizing empty miles and maximizing load efficiency. Additionally, balancing asset usage can reduce repair and maintenance spend while increasing fleet output. FMS provides comprehensive visibility into asset usage, allowing fleets to quickly spot underutilized and overused assets by mileage, status and historical downtime for optimized asset allocation.
Making Data-driven Decisions
With all trucking fleet cost centers on the rise, FMS can prove a valuable source of data for informed cost-control decision-making. Understanding cost metrics and trends in your fleet — and within the industry — can help you make informed decisions to optimize your operations. With the ability to monitor and control costs more effectively, fleets can navigate the challenges of rising operational expenses while maintaining profitability and operational efficiency.
Want to improve cost control in your trucking fleet operation? Start your free Fleetio trial or schedule a personalized walkthrough today!
