# An Analysis of the Operational

Costs of Trucking: A 2013 Update

September 2013

## An Analysis of the Operational Costs of Trucking:

201 3 Update

September 201 3

Katherine J. Fender

Research Analyst

American Transportation Research Institute

St. Paul, MN

David A. Pierce

Research Associate

American Transportation Research Institute

Atlanta, GA

950 N. Glebe Road, Suite 210

Arlington, Virginia 22203

www.atri

- online.org

### ATRI BOARD OF DIRECTORS

Mr. Steve Williams

Chairman of the ATRI Board

Chairman & CEO

Maverick USA, Inc.

Little Rock

, AR

Mr. Michael S. Card

President

Combined Transport, Inc.

Central Point

, OR

Mr. Edward Crowell

President & CEO

Georgia Motor Trucking Association

Atlanta

, GA

Mr. Rich Freeland

President

– Engine Business

Cummins Inc.

Columbus

, IN

Mr. Hugh H. Fugleberg

President & COO

Great West Casualty Company

South Sioux City

, NE

Mr. Jack Holmes

President

UPS Freight

Richmond, VA

Mr. Ludvik F. Koci

Director

Penske Transportation Components

Bloomfield Hills

, MI

Mr. Chris Lofgren

President & CEO

Schneider National, Inc.

Green Bay

, WI Mr. William J. Log ue

President & CEO

FedEx Freight

Memphis, TN

Ms. Judy McReynolds

President & CEO

Arkansas Best Corporation

Fort Smith, AR

Mr. Jeffrey J. McCaig

President & CEO

Trimac Transportation, Inc.

Houston, TX

Mr. Gregory L. Owen

Head Coach & CEO

Ability/ Tri

- Modal Transportation

Services

Carson

, CA

Mr. Douglas W. Stotlar

President & CEO

Con

- way Inc.

Ann Arbor, MI

Ms. Rebecca M. Brewster

President & COO

American Transportation Research

Institute

Atlanta

, GA

Honorable Bill Graves

President & CEO

American Trucking Associations

Arlington

, VAATRI RESEARCH ADVISORY COMMITTEE

Mr. Steve L. Niswander

RAC Chairman

VP, Safety Policy & Regulatory

Relations

Groendyke Transport, Inc.

Mr. Duane Acklie

Chairman

Crete Carrier Corporation

Mr. Kirk Altrichter

VP

– Maintenance

Gordon Trucking, Inc.

Ms. Susan Alt

VP, Customer & Industry

Relations

Volvo Trucks North America

Mr. Andrew Boyle

Executive Vice President

Boyle Transportation

Mr. Randy Boyles

Senior Vice President, Tailored

Solutions

PeopleNet

Ms. Cheryl Bynum

Manager, SmartWay Transport

Partnership

U.S. Environmental Protection

Agency

Mr. Michael Conyngham

Director of Research

International Brotherhood of

Teamsters

Mr. Tom DiSalvi

Director of Loss Prev ention

Schneider National, Inc.

Mr. Chad England

Chief Executive Officer

C.R. England Ms. Patti Gillette

Safety Director

Colorado Motor Carriers

Association

Mr. John Hancock

Director

Prime, Inc.

Mr. Matt Hart

Executive Director

Illinois Trucking Association

Ms. Kendra Hems

President

New York State Motor Truck

Association

Mr. Sanford Hodes

Senior Vice President and Deputy

General Counsel

Ryder System, Inc.

Mr. Steve A. Keppler

Executive Director

Commercial Vehicle Safety

Alliance

Mr. Alan Korn

Director

– Vehicle Control

Systems

Meritor WABCO

Mr. Keith A. Klingenberg, CIC

Senior Vice President

Logistics Practice Group Leader

Wells Fargo Insurance Services

USA

Mr. Michael Kray

Principal Planner

Atlanta Regional Commission

Ms. Michele MacCollum

Director, Product Management

Omnitracs, a Qualcomm company

Mr. Chris McLoughlin

Cargo Risk Manager

C.H. Robinson Ms. Jennifer Morrison

Vehicle Factors Engineer

National Transportation Safety

Board

Mr. Robert D. Moseley, Jr.

Transportation Attorney

Smith Moore Leatherwood

Mr. Scott Mugno

Vice President of Safety

FedEx Ground

Mr. Dean Newell

Vice President, Safety

Maverick USA, Inc.

Mr. Richard Plewacki

Partner

Benesch Friedlander Coplan &

Arnoff

Mr. Brett A. Sant

VP, Safety and Risk Management

Knight Transportation, Inc.

Mr. Webb A. Shaw

Vice President

– Editorial

Resources

J.J. Keller & Associates

Dr. Frank Southworth

Principal Research Scientist

Georgia Tech School of Civil and

Environmental Engineering

Mr. Keith Tuttle

President

Motor Carrier Services Inc.

Mr. Tom Weakley

Director of Operations

Owner

- Operator Independent

Drivers Association Foundation

Mr. Greer Woodruff

Senior Vice President of

Corporate Safety and Security

J.B. Hunt Transport Services, Inc.An Analysis of the Operational Costs of Trucking:

2013 Update i TABLE OF CONTENTS

TABLE OF CONTENTS

................................ ................................ ................................ . i

LIST OF FIGURES AND TABLES

................................ ................................ ................ ii

LIST OF ACRONYMS

................................ ................................ ................................ .. iii

EXECUTIVE SUMMARY

................................ ................................ ............................... 1

INTRODUCTION

................................ ................................ ................................ ........... 4

Changing Economic Conditions

................................ ................................ ...... 5

Fuel Cost Impacts

................................ ................................ .......................... 5

The Driver Shortage

................................ ................................ ....................... 6

METHODOLOGY

................................ ................................ ................................ .......... 7

ANALYSIS

................................ ................................ ................................ ..................... 8

Fleet Demographics

................................ ................................ .......................... 8

2012 Motor Carrier Costs

................................ ................................ ................ 11

Fuel Costs

................................ ................................ ................................ .... 14

Equipment Lease or Purchase Payments

................................ .................... 15

Repair and Maintenance

................................ ................................ .............. 15

Truck Insurance Premiums

................................ ................................ .......... 16

Permits and Special Licenses

................................ ................................ ...... 17

Tires

................................ ................................ ................................ ............. 17

Tolls

................................ ................................ ................................ ............. 17

Driver Wages and Benefits

................................ ................................ .......... 17

Operating Cost Trends

................................ ................................ .................... 18

Top Industry Issues

................................ ................................ ...................... 20

CONCLUSION

................................ ................................ ................................ ............. 21

GLOSSARY

................................ ................................ ................................ ................. 23

APPENDIX A

................................ ................................ ................................ ............... 24An Analysis of the Operational Costs of Trucking:

2013 Update ii LIST OF FIGURES AND TABLES

Table ES 1. Average Carrier Costs per Mile, 2008

- 2012

................................ ............ 2

Table ES 2. Average Carrier Costs per Hour, 2008

- 2012

................................ ......... 2

Table ES 3. Share of Total Average Cost, 2008

- 2012

................................ .............. 3

T able ES 4. Motor Carrier Cost Center Trends

................................ .......................... 3

Figure 1. Average U.S. On

- Highway Diesel Prices, 2008

- 2013

................................ 6

Figure 2. Historic Fuel CPM

................................ ................................ ...................... 14

Figure 3. Average Repair and Maintenance Costs, 2008

- 2012

.............................. 16

Table 1. For

- Hire Industry Sector Breakout

................................ ............................... 8

Table 2. Survey Respondent Truck/Trailer Type, Average Truck Age and Average

Miles Driven per Year per Truck

................................ ................................ ................. 9

Table 3. Survey Respondent Trip Types

................................ ................................ .. 10

Table 4. Survey Respondent Truck VMT and National Truck Registrations by

Region

................................ ................................ ................................ ........................ 11

Table 5. Average Carrier Costs per Mile, 2008

- 2012

................................ .............. 12

Table 6. Average Carrier Costs per Hour, 2008

- 2012

................................ ............ 12

Table 7. Share of Total Average Cost, 2008

- 2012

................................ .................. 13

Table 8. Average Total Cost per Mile by Sector

................................ ....................... 13

Table 9 . Repair and Maintenance Costs by Sector

................................ .................. 16

Table 10. Motor Carrier Cost Center Trends

................................ ............................ 19

Table 11. Cost Trends by Sector

................................ ................................ ............... 19

Table 12. Average Carrier Costs per Mile by Region, 2012

................................ ..... 20

Table 13. Top Industry Issues Survey Results, 2008

– 2012

................................ ... 21An Analysis of the Operational Costs of Trucking:

2013 Update iii LIST OF ACRONYMS

ATA American Trucking Associations

ATRI American Transportation Research Institute

BLS Bureau of Labor Statistics

CFO Chief Financial Officer

CNG Compressed Natural Gas

CPH Cost per Hour

CPM Cost per Mile

CSA Compliance, Safety, Accountability

EIA Energy Information Administration

FHWA Federal Highway Administration

FMCSA Federal Motor Carrier Safety Administration

FPM Freight Performance Measur es

LCV Longer Combination Vehicle

LNG Liquefied Natural Gas

LTL Less

- than

- Truckload

MPH Miles per Hour

NDA Non

- Disclosure Agreement

P&D Pick

- up and Delivery

RAC Research Advisory Committee

R&M Repair and Maintenance

TL Truckload

VMT Vehicle Miles TraveledAn Analysis of the Operational Costs of Trucking:

2013 Update 1 EXECUTIVE SUMMARY

In late 2008, the American Transportation Research Institute (ATRI) published an

Analysis of the Operational Costs of Trucking in an effort to provide more accurate

marginal cost data for motor carrier operations. Several previous studies generated

cost calculations that industry stakeholders considered unreasonably high or low; in

other instances, analyses utilized the somewhat nebulous “value of time” calculations

which also did not reflect direct carrier

- borne costs (Figure ES1)

.

Figure ES 1 . Estimated Hourly Operating Costs by Data Source 1

Consequently, ATRI undertook research to document and quantify motor carriers’ key

operational costs, stratified by fleet size, sector and region of the country. The goal of

the research was to identify current and accurate operational costs based on data

provided directly from motor carriers. The resulting dataset could then be used by both

motor carriers as a high

- level benchmarking tool and by government agencies for

transportation improvement analyses.

Due to the popularity of the initial report, ATRI now updates the research on an annual

basis . Since its original publication in 2008, ATRI has received over 3,000 requests for

the “Op erational Costs of Trucking” reports. This report includes the more recent 2012

cost data.

1 ATRI. An Analysis of the Operational Costs of Trucking. Arlington, VA. (2008)

$0 $50 $100 $150 $200 $250 $300 $350 $400

FHWA-HERS MN-Load

Restrictions TTI-CMV

Congestion Cost TRB-Travel

Time Savings,

Lower Range TRB-Travel

Time Savings,

Upper Range TRB-Late

Schedule

Delays, Savings Cost per Hour

Source of Data Hourly Truck Operating Costs

Value of Travel TimeAn Analysis of the Operational Costs of Trucking:

2013 Update 2 In summary, tables ES1 and ES2 present the marginal cost per mile (CPM) and cost

per hour (CPH) for 201 2 juxtaposed with 2008

- 2011 data for comparison purposes.

The average marginal CPM for 201 2 was $ 1.633

, which represents a slight decrease

from 2011 ($1.706)

.

Table ES 1 . Average Carrier Costs per Mile, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs $0.633 $0.405 $0.486 $0.590 $0.641

Truck/Trailer Lease or Purchase Payments $0.213 $0.257 $0.184 $0.189 $0.174

Repair & Maintenance $0.103 $0.123 $0.124 $0.152 $0.138

Truck Insurance Premiums $0.055 $0.054 $0.059 $0.067 $0.063

Permits and Licenses $0.016 $0.029 $0.040 $0.038 $0.022

Tires $0.030 $0.029 $0.035 $0.042 $0.044

Tolls $0.024 $0.024 $0.012 $0.017 $0.019

Driver

- based

Driver Wages $0.435 $0.403 $0.446 $0.460 $0.417

Driver Benefits $0.144 $0.128 $0.162 $0.151 $0.116

TOTAL $1.653 $1.451 $1.548 $1.706 $1.633

Table ES 2 . Average Carrier Costs per Hour, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs $25.30 $16.17 $19.41 $23.58 $25.63

Truck/Trailer Lease or Purchase Payments $8.52 $10.28 $7.37 $7.55 $6.94

Repair & Maintenance $4.11 $4.90 $4.97 $6.07 $5.52

Truck Insurance Premiums $2.22 $2.15 $2.35 $2.67 $2.51

Permits and Licenses $0.62 $1.15 $1.60 $1.53 $0.88

Tires $1.20 $1.14 $1.42 $1.67 $1.76

Tolls $0.95 $0.98 $0.49 $0.69 $0.74

Driver

- based

Driver Wages $17.38 $16.12 $17.83 $18.39 $16.67

Driver Benefits $5.77 $5.11 $6.47 $6.05 $4.64

TOTAL* $66.07 $58.00 $61.91 $68.21 $65.29

Table ES3 shows the average share of the total cost for each line item and Table ES4

displays the year

- over

- year change for the cost centers. While the average share of the

total cost for each of the line items remained relatively stable from 2011 to 2012 , the

total average cost decreased by four percent.

Line items may not sum to total shown due to rounding.An Analysis of the Operational Costs of Trucking:

2013 Update 3

Table ES 3 . Share of Total Average Cost, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs 38% 28% 31% 35% 39%

Truck/Trailer Lease or Purchase Payments 13% 18% 12% 11% 11%

Repair & Maintenance 6% 8% 8% 9% 8%

Truck Insurance Premiums 3% 4% 4% 4% 4%

Permits and Licenses 1% 2% 3% 2% 1%

Tires 2% 2% 2% 2% 3%

Tolls 1% 2% 1% 1% 1%

Driver

- based

Driver Wages 26% 28% 29% 27% 26%

Driver Benefits 9% 9% 10% 9% 7%

TOTAL 100% 100% 100% 100% 100%

Table ES 4 . Motor Carrier Cost Center Trends

Motor Carrier Cost Centers 2008

- 2009

Change 2009

- 2010

Change 2010

- 2011

Change 2011

- 2012

Change

Vehicle

- based

Fuel Costs

- 36% 20% 21% 9%

Truck/Trailer Lease or Purchase

Payments 21%

- 28% 2%

- 8%

Repair & Maintenance 19% 1% 22%

- 9%

Truck Insurance Premiums

- 3% 9% 14%

- 6%

Permits and Licenses 84% 39%

- 4%

- 43%

Tires

- 5% 24% 18% 5%

Tolls 3%

- 49% 39% 8%

Driver

- based

Driver Wages

- 7% 11% 3%

- 9%

Driver Benefits

- 11% 26%

- 6%

- 23%

TOTAL

- 12% 7% 10%

- 4%

Line items may not sum to total shown due to rounding.

Line items may not sum to total shown due to rounding.An Analysis of the Operational Costs of Trucking:

2013 Update 4 INTRODUCTION

As an update to reports released in 2008

, 2011 and 2012 , the American Transportation

Research Institute (ATRI) is once again publishing An Analysis of the Operational Costs

of Trucking. This research was initially identified as a top priority by ATRI’s Research

Advisory Committee (RAC) 2 in 2008 due to the increasing interest from policy makers in

creative transportation funding strategies. The trucking industry, which is heavily reliant

on the 4 million miles of roadway in the U.S., has a vested interest in equitable funding

and mainten ance of the transportation system. In order for new funding proposals to be

properly vetted, it is important that the underlying inputs to a particular policy analysis

are accurate.

To remedy the lack of accurate trucking industry operational cost data, ATRI conducted

research in 2008

, 2011 and 2012 that generated more precise cost assumptions.

Although several earlier studies utilized highly subjective value of time metrics, very few

had attempted to quantify real, direct costs of motor carrier operatio ns, in particular, the

marginal cost of operating a truck for one mile or one hour. Depending on the agency

or political objective, different costs figures have been promulgated

. L ower cost

estimates have been used , for instance, to downplay the value or significance of certain

transportation programs while unreasonably high figures have been used to minimize

the impact of raising new creative financing fees. Therefore, ATRI developed a

methodology that would quantify the key operational cost centers for motor carriers,

stratified by fleet size, major industry sectors and region of the country. The goal of the

research was to collect and aggregate current operational costs provided directly from

motor carriers. The resulting dataset and analyses are use d by both motor carriers as a

high

- level benchmarking tool and by government agencies for transportation

improvement analyses.

In late 2008, ATRI first published An Analysis of the Operational Costs of Trucking 3 and

update report s were released in 2011 4 and 2012

. 5 Since the original publication, ATRI

has received more than 3,000 requests for the Operational Costs of Trucking report.

Based on high interest in the original studies and the subsequent requests for continual

updates, ATRI initiated a proces s for obtaining fleet data on an annual basis . This

year’s survey , which collected 2012 cost data from a large range of motor carriers

, brings the dataset to five full years (2008

- 2012) of operational cost information. ATRI

expects to continue to update these results annually

.

2 T he American Transportation Research Institute (ATRI) Research Advisory Committee (RAC) is

comprised of industry stakeholders representing motor carriers, trucking industry suppliers, labor and

driv er groups, law enforcement, federal government and academia. The RAC is charged with annually

recommending a research agenda for the Institute.

3 ATRI. An Analysis of the Operational Costs of Trucking. Arlington, VA. ( 2008 )

4 ATRI. An Analysis of the Operational Costs of Trucking: A 2011 Update. Arlington, VA. ( 2011 )

5 ATRI. An Analysis of the Operation Costs of Trucking: A 2012 Update. Arlington, VA. (2012)An Analysis of the Operational Costs of Trucking:

2013 Update 5 Changing Economic Conditions

Much has changed in the trucking industry over the past six years. After severe downsizing during the Great Recession in 2008 and 2009 , the industry began to see

slight increases in freight dema nd in 2010 and 2011 , with moderate growth continuing

through the second quarter of 2013 . F uel prices, one of the largest components of

industry operating costs, were volatile following the Recession, reaching historic highs

in 2008 and then decreasing dramatica lly in 2009 before rising once again in 2010

. Diesel fuel prices have remained relatively stable since 2011 however , with average

prices remaining close to $4.00 per gallon. 6

Additionally , a series of internal and external factors are creating what some industry

experts say will be the industry’s worst shortage of qualified drivers ever , leading to

serious concerns over capacity constraints and increased modal diversion for longer

haul truck trips.

Fuel Cost Impacts

Petroleum prices rose to an unpr ecedented level in July 2008, reaching over $145 per

barrel before decreasing dramatically in late 2008. This translated to average U.S.

diesel prices of well over $4.50 per gallon during the summer of 2008 (Figure 1).

However, by March 2009 diesel price s had fallen to $2.02 per gallon. Prices rose

steadily through 2010 before stabilizing in 2011 and 2012 . On

- highway prices averaged

$2.47 per gallon in 2009, $2.99 in 2010

, $3.84 in 2011 and $3.97 in 2012

. 7

6 Gasoline and Diesel Fuel Update. U.S. Energy Information Administration. Available Online:

http://www.eia.gov/petroleum/gasdiesel/

7 Ibid.An Analysis of the Operational Costs of Trucking:

2013 Update 6 Figure 1 . Average U.S . On

- Highway Diesel Prices, 2008

- 2013 8

Based on the Energy Information Administration’s (EIA) diesel price information and

market conditions, the American Trucking Associations’ (ATA) Economic and Statistics

Group estimated that the trucking industry spent $150.4 billion on diesel fuel in 201 2

. 9

This is considerably higher than the $1 43.4 billion spent on diesel in 201 1

. 10 The EIA is

predicting that diesel prices will moderate over the next two years, however, and it

estimates an aver age retail diesel price of $3.81 per gallon for July through December

201 3 and an average of $3. 77 per gallon for 2014

, 11 even though diesel prices are

currently higher than these estimates ($3.91 per gallon as of 8/26/2013)

. 12

The Driver Shortage

A severe and growing shortage of qualified drivers continues to impact the industry.

ATA estimated that there was a shortage of 20,000 to 25,000 drivers at the end of 2012

and predicted that this number could increase to 239,000 drivers by 2022. 13 Driver

downsizing during the recession, an aging workforc e, new government regulations and

8 Gasoline and Diesel Fuel Update. U.S. Energy Information Administration. Available Online:

http://www.eia.gov/petroleum/gasdiesel/

9 ATA. American Trucking Trends 2013 . Arl ington, VA

. (2013)

10 Ibid.

11 Diesel fuel price projections. U.S. Energy Information Administration. Available online:

http://www.eia.gov/tools/faqs/faq.cfm?id=31&t=9

12 Ibid.

13 ATA. Truck Driver Shortage Update. Arlington, VA. (2012)

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00

Price per GallonAn Analysis of the Operational Costs of Trucking:

2013 Update 7 high training costs for new drivers have reduced the number of truck drivers in the U.S.

Previous research by ATRI , for example, found that 83 percent of carriers surveyed

reported that the Federal Motor Carrier Safety Ad ministration’s (FMCSA) Compliance,

Safety, Accountability (CSA) had made it somewhat or much more difficult to find new,

qualified drivers in 2012. 14 Additionally

, construction and natural gas production have

grown dramatically recently and carriers must compete with these high paying jobs for

drivers

. I t is still unclear , however, how large of an impact the driver shortage will have,

as the industry continues to expand its workforce. The U.S. Bureau of Labor Statistics

(BLS) projects that employment for “heavy and tractor

- trailer truck drivers” will increase

by 21 percent through 2020, resulting in over 330,000 new jobs. 15 This presumes that a

qualified driver pool exists to fill this estimated demand.

METHODOLOGY

This ATRI study utilized a data collection methodology that was similar to the survey

tools used in previous years . Three new questions were added to th is year’s survey to

obtain additional information on longer combination vehicle (LCV) use, prospective use

of heavier 6

- axle trucks and the percent of miles that were non

- revenue/empty in 2012

. Where appropriate, the data request forms were also streamlined to improve response

efficiency. The forms used common industry operational and financial metrics, and

were beta

- te sted with several motor carriers. Specifically, the research team solicited

technical guidance and review from industry financial officers or those with working

knowledge of motor carrier cost structures. Prior to full distribution, the data collection

f orms were modified several times based on the reviewers’ recommendations.

Due to the highly competitive nature of the trucking industry and the extreme sensitivity

associated with corporate financials and expenditures, the operational cost information

was collected confidentially from motor carriers and the data was used in aggregate

form only. ATRI also provided survey respondents with non

- disclosure agreements

(NDA) when requested.

T he survey was distributed on April 1

, 201 3 to a representative group o f for

- hire carriers

which included truckload (TL), less

- than

- truckload (LTL) and specialized fleets . Several

industry mechanisms were used for outreach, including targeted mailings and emails,

news alerts and coverage in major industry news outlets. Resp onses were collected

through June 28

, 201 3 . Data collection forms were distributed electronically and via

certified mail, with instructions to return the completed survey via email or fax. An

online survey was also made available for participants to ente r their data. All responses

were carefully reviewed by the research team for clarity and the research team

contacted respondents to clarify any ambiguous responses as needed. The majority of

14 ATRI. Compliance, Safety, Accountability: Evaluating a New Safety Measurement System and Its

Implications. Arlington, VA. (2012)

15 Bureau of Labor Statistics. Occupational Outlook Handbook, Heavy and Tractor

- trailer Truck Drivers.

Available online: http:// www.bls.gov/ooh/transportation

- and

- material

- moving/heavy

- and

- tractor

- trailer

truck

- drivers.htm#TB_inline?height=325&width=325&inlineId=qf

- emp

- changeAn Analysis of the Operational Costs of Trucking:

2013 Update 8 survey respondents held finance /accounting

- related positions, w ith Chief Financial

Officer (CFO) and financial controller being the most common titles held by the

respondents.

The survey primarily solicited components and sub

- components of carrier costs per mile

(CPM) in order to accurately capture different industry business models. In order to

convert line

- item CPM figures into a total cost per hour (CPH) figure, an empirical,

industry

- vetted average operational speed of 39.98 miles per hour (MPH) was used in

these calculations. It should be noted that this speed includes all roadway speeds

rather than just highway speeds. 16

ATRI then weighted, as needed, survey responses to reflect the average percentages of

the major for

- hire sectors. Compared to the national averages, TL carriers were slightly

over

- represented in the survey sample while LTL carriers were under

- represented

(Table 1). Weighting the responses to the national industry averages yielded more

balanced results.

Table 1 . For

- Hire Indust ry Sector Breakout

Industry Sector ATRI Survey

Respondents U.S. Trucking

Industry 17

Truckload 62 % 52%

Less

- than

- Truckload 11 % 24%

Specialized/Other 27 % 24%

Where applicable, cost data were cross

- tabulated by factors such as fleet size,

operating sector and operating region. The data collected are presented in aggregate

form in order to protect proprietary carrier information.

ANALYSIS

Fleet Demographics

Survey respondents operate 40,152 trucks

, which accrue d an estimated 4. 1 billion miles

in 2012 . These carriers also utilized 80,110 trailers in their operations . As previously

noted, the for

- hire fleets were grouped into three industry sectors; TL, LTL and

specialized (see Glossary for sector descriptions). While the respondents were

16 ATRI derived this speed using several sets of data from the ATRI/Federal Highway Administration

(FHWA) Fr eight Performance Measures (FPM) program. ATRI analyzed one full week of national FPM

data in each of the four seasons in 2010 (February, May, August, October). This dataset consisted of

over 110 million truck speed data points. The average speed figure was also validated by multiple motor

carriers from various sectors of the industry. The 39.98 mph figure more accurately represents an

average operational speed since it includes speeds in all types of operational conditions.

17 ATA. American Trucking Tr ends: 2005

- 2006 . Arlington, VA. (2007)An Analysis of the Operational Costs of Trucking:

2013 Update 9 general ly representative of the for

- hire segment, the aggregated data was weighted to

the national industry averages of 52 percent for TL, 24 percent for LTL and 24 percent

for specialized. 18 Additional sector analyses can be derived using the truck/trailer

configuration data.

Survey respondents were also asked to indicate their fleet size by annual revenue. This

year’s sample population included more small carriers ( defined as less than $10 million

in annual revenue) than in previous years

. The respondent distribution by annual

revenue was as follows:

Small (less than $10 million annual revenue)

– 43 percent

Medium ($10 to $100 million annual revenue)

– 38 percent

Large (greater than $100 million annual revenue)

– 1 9 percent

Among ATRI survey respondents, the majority of fleets operated truck

- tractors

, as

opposed to straight trucks or other types of power units , and used 53

- foot trailers (Table

2).

Table 2 . Survey Respondent Truck/Trailer Type , Average Truck Age and Average

Miles Driven per Year per Truck

Equipment Type Number of

Trucks/Trailers Average Age

(Years) Average Miles

Driven per Year per

Truck

Trucks

Straight Truck 709 6.0 36,473

Truck

- Tractors 39,431 4.0 102,848

Other Trucks 12 9.0 80,000

Trailers

28’ Trailers 3,348 10.4

45’ Trailers 896 5.8

48’ Trailers 4,394 5.8

53’ Trailers 70,116 7.0

Other Trailers 1,356 10.1

Participants were next asked if their company used LCVs. Fifteen percent of the fleets

reported using LCVs for at least a portion of their vehicle miles traveled (VMT). LCVs

accounted for approximately 182 million miles , or five percent of the total survey

sample.

Additionally, s urvey respondents were asked to provide the number of vehicles that ran

on an alternative fuel (i.e. a fuel other than diesel or a bio

- diesel blend). Only two of the

motor carriers reported using alternative fueled vehicles, equating to two percent of the

18 ATA. American Trucking Trends: 2005

- 2006. Arlington, VA. (2007)An Analysis of the Operational Costs of Trucking:

2013 Update 10 participating fl eet respondents . The trucks ran on liquefied natural gas (LNG) or utilized

a hybrid engine

.

Since fuel costs are one of the largest cost centers for motor carriers, survey

participants were asked if their fleet utilized speed limiters. The majority of respondents

(86 %) reported doing so

. Of those respondents, 78 percent utilized speed limiters on all

of their trucks while another 14 percent used the devices on 50 to 99 percent of their

fleet. Similar to last year’s results, t he most common maximum sp eed setting was 65

MPH.

Participant s were asked to estimate the percent of their drivers’ trip s across four

different categories. As shown in Table 3, respondents were nearly evenly split

between the trip types

, with local trips and regional trips being the most common ( 28 %

each ).

Table 3 . Survey Respondent Trip Types

Trip Types Survey Respondent

Percent of Trips

Local pick

- ups and deliver ie s (less than 100 miles) 28 %

Regional pick

- ups and deliveries (more than 100 miles, less

than 500 miles) 28%

Inter

- regional pick

- ups and deliveries (more than 500 miles,

less than 1,000 miles) 24%

National (great er than 1,000 miles) 20%

The percent of VMT by region was also requested from s urvey respondents

. Table 4

compares respondents’ percent of U.S. VMT by region in 2012 to commercial truck

registrations in the U.S. As can be seen, the Midwest, Southwest and West ern regions

were slightly under

- represented while the Northeast and Southeast were slightly over

repr esented. The finding may relate to the lower costs associated with base

- stating

fleets in certain areas , independent of where the truck operates. Additionally, a small

percentage of the total VMT reported by survey respondents ( 1% ) was in Canada (data

no t included in Table 4)

.An Analysis of the Operational Costs of Trucking:

2013 Update 11 Table 4 . Survey Respondent Truck VMT and National Truck Registrations by

Region

Region Survey Respondent

Percent of Miles Traveled

in U.S. U.S. Percent of Truck

Registrations 19

Midwest 36 % 39 %

Northeast 13 % 9 %

Southeast 23 % 20 %

Southwest 11 % 12 %

West 17 % 20 %

In a new question for this year’s survey, respondents were asked to provide the percent

of VMT that w ere non

- revenue earning or “empty” miles in 2012. Across all participants,

16 percent of VMT were empty on average. TL carriers reported the largest percentage

of empty miles (22%), followed by specialized (15%) and LTL carriers (11%).

2012 Motor Carrier C osts

In order to remain consistent with the previous operational cost analyses, marginal

costs were once again divided into two general group ing s: vehicle

- and driver

- based.

Costs associated with each group include:

Vehicle

- based

o Fuel

o Truck/trailer leas e or purchase payments

o Repair and maintenance

o Truck insurance premiums

o Tires

o Permits and special licenses

o Tolls

Driver

- based

o Wages

o Benefits

Table 5 displays the average cost per mile for all sectors based on the survey data.

The analysis found that the average CPM was $1.633 which makes it the median value

for the five

- year study period . Table 6 presents the average cost per hour for all

sectors. Again, the 2012 CPH value of $65.29 is the five

- year median.

19 FHWA. Highway Statistics 2010. Available online : http://www.fhwa.dot.gov/policyinformation/statistics/2010/An Analysis of the Operational Costs of Trucking:

2013 Update 12 Table 5

. Average Carrier Costs per Mile, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs $0.633 $0.405 $0.486 $0.590 $0.641

Truck/Trailer Lease or Purchase Payments $0.213 $0.257 $0.184 $0.189 $0.174

Repair & Maintenance $0.103 $0.123 $0.124 $0.152 $0.138

Truck Insurance Premiums $0.055 $0.054 $0.059 $0.067 $0.063

Permits and Licenses $0.016 $0.029 $0.040 $0.038 $0.022

Tires $0.030 $0.029 $0.035 $0.042 $0.044

Tolls $0.024 $0.024 $0.012 $0.017 $0.019

Driver

- based

Driver Wages $0.435 $0.403 $0.446 $0.460 $0.417

Driver Benefits $0.144 $0.128 $0.162 $0.151 $0.116

TOTAL $1.653 $1.451 $1.548 $1.706 $1.633

Table 6 . Average Carrier Costs per Hour, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs $25.30 $16.17 $19.41 $23.58 $25.63

Truck/Trailer Lease or Purchase Payments $8.52 $10.28 $7.37 $7.55 $6.94

Repair & Maintenance $4.11 $4.90 $4.97 $6.07 $5.52

Truck Insurance Premiums $2.22 $2.15 $2.35 $2.67 $2.51

Permits and Licenses $0.62 $1.15 $1.60 $1.53 $0.88

Tires $1.20 $1.14 $1.42 $1.67 $1.76

Tolls $0.95 $0.98 $0.49 $0.69 $0.74

Driver

- based

Driver Wages $17.38 $16.12 $17.83 $18.39 $16.67

Driver Benefits $5.77 $5.11 $6.47 $6.05 $4.64

TOTAL* $66.07 $58.00 $61.91 $68.21 $65.29

After decreasing dramatically in 2009 , fuel costs steadily increased and now compris e

39 percent of the total average cost in 2012 (Table 7). Driver wages, e quipment lease

or purchase payments, repair and maintenance (R&M) , and driver benefits were the

next largest cost centers . Tires, permitting and licensing, and tolls have each

consistently represented 3 percent or less of total average costs throughout the study

.

Line items may not sum to total shown due to rounding.An Analysis of the Operational Costs of Trucking:

2013 Update 13

Table 7

. Share of Total Average Cost, 2008

- 2012

Motor Carrier Costs 2008 2009 2010 2011 2012

Vehicle

- based

Fuel Costs 38% 28% 31% 35% 39%

Truck/Trailer Lease or Purchase Payments 13% 18% 12% 11% 11%

Repair & Maintenance 6% 8% 8% 9% 8%

Truck Insurance Premiums 3% 4% 4% 4% 4%

Permits and Licenses 1% 2% 3% 2% 1%

Tires 2% 2% 2% 2% 3%

Tolls 1% 2% 1% 1% 1%

Driver

- based

Driver Wages 26% 28% 29% 27% 26%

Driver Benefits 9% 9% 10% 9% 7%

TOTAL 100% 100% 100% 100% 100%

As previously noted, the analysis stratified motor carrier responses by their primary

sector of operation where applicable. Given the different operational conditions for each

sector, the costs varied. LTL carriers once again reported the highest operating costs in

2012 ($ 1.79 ) followed by specialized ($ 1.73) and TL ($1.51 ) (Table 8 ). LTL carriers can

have higher operating costs for a variety of reasons, including:

increased marginal costs associated with frequent pick

- up and delivery (P&D)

operations in congested urban areas , includin g higher fuel and maintenance

costs ;

increased overhead costs of handling many smaller shipments several times and

associated dock personnel labor costs;

need for multiple terminals located near urban areas and the associated need for

more equipment; and

i ncreased labor costs that are associated with LTL

- oriented collective bargaining

contracts.

Table 8 . Average Total Cost per Mile by Sector

Sector 2008 2009 2010 2011 2012

LTL $1.81 $1.43 $1.76 $1.93 $1.79

Specialized $1.87 $1.67 $1.61 $1.79 $1.73

TL $1.48 $1.36 $1.43 $1.57 $1.51

The following sections analyze specific line

- item cost centers that comprise major

marginal operating costs for motor carriers.

Line items may not sum to total shown due to rounding.An Analysis of the Operational Costs of Trucking:

2013 Update 14 Fuel Costs

As previously discussed, petroleum prices rose to an unprecedented level in July 2008,

reaching over $145 per barrel before decreasing dramatically in late 2008. During the

summer of 2008 on

- highway diesel prices averaged more than $4.50 per gallon

nationally but by March 2009, prices had dropped to $2.02 p er gallon. 20 Fuel prices

have steadily increased since then, averaging $2.47 per gallon in 2009, $2.99 in 2010

, $3.84 in 2011 and $3.97 in 2012

. 21 Figure 2 shows the historic average fuel CPM from

2003 through 201 2

.

Figure 2

. Historic Fuel CPM 22

Consistent with the EIA data, survey respondents indicated that after fuel costs fell

significantly from 63.3 cents per mile in 2008 to 40.5 cents per mile in 2009, they were

once again on the rise from 2010 to 201 2

. Calculated on an annualized basis, t he

average fuel CPM was 48.6 in 2010, 59.0 cents in 2011 and 64.1 cents in 2012 , the

highest value reported to date

. Furthermore, fuel costs now account for 39 percent of

total annual carrier costs, which is the largest share documen ted by ATRI in the five

years since initiating this research

. Analyzed by sector, specialized carriers reported

the highest fuel CPM ( 69.6 cents), followed by LTL ( 63.9 cents) and TL carriers ( 61.7

cents)

.

20 Gasoline and Diesel Fuel Update. U.S. Energy Information Administration. Available Online:

http://www.eia.gov/petroleum/gasdiesel

21 Ibid.

22 Fuel and engine oil cost data for 2003 are from ATA’s American Trucking Trends: 2003 , data for 2006 are

from ATA’s Motor Carrier Annual Report Summary Tables, 2006 Data, Aggregated Survey Results (2008) and

data for 2007 through 201 2 are from ATRI’s An Analysis of the Operational Costs of Trucking survey results. 19.8 42.0 54.5 63.3

40.5 48.6 59.0 64.1

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

2003 2006 2007 2008 2009 2010 2011 2012 Fuel CPM (cents)An Analysis of the Operational Costs of Trucking:

2013 Update 15 Equipment Lease or Purchase Payments

Truck and trailer payments were classified as a quasi

- operational cost since many

motor carriers purchase additional trucks and trailers in response to capacity constraints

in high

- demand times. Survey respondents indicated that truck/trailer lease or purchase

payments continued their downward trend and averaged 17.4 cents in 2012

. While

Class 8 sales rose during the first eight months of 2012, sales began declining in

September and eventually led to a year

- over

- year decrease of 6.8 percent from J anuary

2011 to January 2012. 23 Continued uncertainty about the domestic and global

economies i n 2012 appeared to be the driving force behind the market contraction.

Additionally, while the average equipment lease or purchase payment declined slightly

in 2012, its share of the total cost remained unchanged at 11 percent in both 2011 and

2012. Recent research by an industry consultant also indicates that Class 8 equipment

replacement schedules follow a cyclical pattern, peaking every fourth or fifth year. 24

They go on to project that “a strong equipment replacement cycle should begin between

2014 and 2015.”

Repair and Maintenance

Several factors impact a carrier’s R&M costs, such as the age of the trucks and trailers,

the vehicle configuration used and the technologies that are installed. Average R&M

costs for survey respondents were 13.8 cents per mile in 2012, a slight decrease from

the 15.2 cents per mile reported in 2011

. The overall trend for the past five years has

been increasing R&M costs , however (Figure 3 ). The decrease in 2012 R&M costs

corresponds to a slight decrease in the average Class 8 vehicle age (6.5 years in 2012,

down from 6.6 years in 2011) 25 and indicates that R&M costs follow the same cyclical

pattern that equipment replacement schedules follow.

23 Reiskin, J.S. Class 8 Sales Decline Again. Transport Topics. February 18, 2013. Available online:

http://www.ttnews.com/articles/petemplate.aspx?storyid=31275&page=1

24 Kilcarr, S. Fleets ready to begin Class 8 replacement cycle. Fleet Owner. July 29, 3013. Available

online: http://fleetowner.com/equipment/fleets

- ready

- begin

- class

- 8

- replacement

- cycle

25 Calpin, P. and Plaza

- Jennings, E. A Look Back at EPA’s Cost and Other Impact Projecti ons for MY

2004

- 2010 Heavy

- Duty Truck Emissions Standards. American Truck Dealers. 2012.An Analysis of the Operational Costs of Trucking:

2013 Update 16 Figure 3 . Average Repair and Maintenance Costs, 2008

- 2012

While specialized carriers had reported th e highest R&M costs in 2008 , the LTL sector

has reported the highest costs in 2009 through 2012 (Table 9) . The higher costs

experienced by LTL carriers may be due to the extra wear on their vehicles associated

with P&D operations in congested urban areas.

Table 9 . Repair and Maintenance Costs by Sector

Sector 2008 2009 2010 2011 2012

LTL $0.087 $0.159 $0.148 $0.180 $0.183

Specialized $0.117 $0.138 $0.140 $0.157 $0.144

TL $0.104 $0.099 $0.106 $0.137 $0.114

Truck Insurance Premiums

Another quasi

- operational cost, truck insurance premiums can vary widely between

carriers

– particularly based on miles

- traveled exposure. Many larger fleets self

- insure

or utilize umbrella policies which do not easily equate to per

- truck unit costs.

Add itionally, property and liability insurance costs still apply while a truck is unoccupied

and stationary. This cost center was ultimately included, however, since most

insurance coverage is mileage

- and vehicle

- specific. Carriers often pay liability and

cargo premiums by the mile (except for excess coverage). Since physical damage

coverage is calculated by tractor/trailer value, the premium can be divided by the total

miles traveled to obtain the cost per mile.

According to the motor carriers surveyed, commercial truck insurance premiums

decreased slightly in 2012, averaging 6.3 cents per mile

. Similar to 2011, specialized

carriers reported the highest insurance CPM (8.0 cents) while LTL carriers reported the

lowest (5.2 cents). TL carriers reported an average cost of 6.0 cents per mile. 10.3 12.3 12.4 15.2

13.8

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

2008 2009 2010 2011 2012 CentsAn Analysis of the Operational Costs of Trucking:

2013 Update 17 Permits and Special Licenses

The average permitting and licensing CPM for all carrier respondents was 2.2 cents in

201 2 , which was significantly lower than the 3.8 cents found in 2011

. Permit and

licensing expenses h ave been the most volatile cost center for carriers over the past

five years. Since these costs are highly dependent on a carrier’s type of operation and

location, a portion of these year

- over

- year fluctuations may be due to the variable

survey respondent population each year. In addition, it is assumed that government

agencies can, and do, turn to these “fees” as a revenue

- generation tool when political

forces preclude raising “taxes

. ”

Not surprisingly, specialized carriers reported th e highest permitting costs of all three

sectors , averaging 2.9 cents per mile

. LTL and TL carriers reported an average CPM of

2.0 cents.

Tires

Since tires are a petroleum

- based product, tire costs increased in response to the

higher oil prices of 2008. After remaining relatively stable in 2008 and 2009 (3.0 and

2.9 cents, respectively), survey respondents reported that tire CPM was again

increasing. Carriers indicated that tire CPM rose considerably to 3.5 cents in 2010

, 4.2

cents in 2011 and 4.4 cents in 2012. In a change from previous years, LTL carriers

reported slightly higher tire costs in 2012 (4.5 cents per mile) than TL or specialized

carriers (4.4 cents per mile each).

Tolls

Tolls can be a significant cost for motor carriers and are highly dependent on the

carrier’s region of operation. Many carriers try to avoid tolls whenever possible since

shippers rarely reimburse a carrier for toll

- related expenses. The average toll CPM for

all respondents was 1.9 cents in 2012. Motor carriers that operate d in the Northeast

had the highest average toll costs ( 3.2 cents per mile ) , while carriers that operate d in

the West had the lowest toll costs ( 1.1 cents per mile )

.

Driver Wages and Benefits

Most over

- the

- road or long

- haul truck drivers are primarily paid on a per

- mile basis while

LTL P&D drivers are generally paid by the hour. The U.S. BLS reported that the

national average hourly pay for heavy duty truck drivers (excluding self

- e mployed

drivers) was $1 9.40 in 201 2 26 and $16.32 for light truck or delivery services drivers. 27

26 Department of Labor, Bureau of Labor Statistics. Occupational Employment and Wages, May 2012

. Available online: http://www.bls.gov/oes/current/oes533032.htmAn Analysis of the Operational Costs of Trucking:

2013 Update 18 Survey respondents indicated that average truck driver pay per mile was 4 1.7 cents in

201 2 , which was lower than the 46.0 cents reported in 2011 . In terms of h ourly wages,

the 2012 CPM figure translated to $ 16.67

. While driver wages were expected to

increase in 2012, slow ing economic and freight growth likely limited wage increases . Of

the survey respondents who provided driver pay information for both 2011 an d 2012, 36

percent reported decreased driver wages in 2012 and another 36 percent indicated no

change in driver pay. Driver wages increased in 2010 and 2011 (11% and 3%,

respectively) and although 2012 pay contracted according to the survey participants, it

was still 1.4 cents per mile above 2009 driver wages.

Carriers may also have relied on incentive or bonus pay to supplement driver wages

while economic uncertainties remained in 2012. Respondents reported an average

incentive/bonus pay of $1,493 per driver in 2012. While incentive/bonus information

was not collected in previous surveys (and year

- to

- year comparisons are therefore

unavailable) , several carriers were consulted and indicated that incentive/bonus pay is

becoming more common throughout the industry.

Across the three major industry sectors, driver wages mimicked sector trends in total

costs for 2012 ; LTL carriers reported the highest driver wages (46.8 cents per mile)

, followed by specialized carriers (43.7 cents per mile) and TL carriers h ad the lowest

(38.5 cents per mile)

.

Similar to the 2011 analysis, approximately one

- quarter (2 5 %) of survey respondents

utilized team drivers, who alternate driving the same truck during a trip. Of those

respondents, the average wage per mile for a comp any team driver was 36.5 cents per

mile in 20 12. T he “driver benefits” CPM also decreased from 201 1 to 201 2 (from 15.1

to 11.6 cents).

Operating Cost Trends

After increasing by 1 0 percent from 20 10 to 2 011

, the total average costs decreased by

four perc ent from 2011 to 2012 ( Table 10). Rising fuel

, tire and toll costs did not

outweigh the decreases in driver wages and benefits, equipment lease and purchase

payments, repair and maintenance, permitting and licensing or insurance premiums

.

27 Department of Labor, Bureau of Labor Statistics. Occupational Employment and Wages, May 2012.

Available online: http://www.bls.gov/oes/current/oes533033.htmAn Analysis of the Operational Costs of Trucking:

2013 Update 19

Table 10 . Motor Carrier Cost Center Trends

Motor Carrier Cost Centers 2008

- 2009

Change 2009

- 2010

Change 2010

- 2011

Change 2011

- 2012

Change

Vehicle

- based

Fuel Costs

- 36% 20% 21% 9%

Truck/Trailer Lease or Purchase

Payments 21%

- 28% 2%

- 8%

Repair & Maintenance 19% 1% 22%

- 9%

Truck Insurance Premiums

- 3% 9% 14%

- 6%

Permits and Licenses 84% 39%

- 4%

- 43%

Tires

- 5% 24% 18% 5%

Tolls 3%

- 49% 39% 8%

Driver

- based

Driver Wages

- 7% 11% 3%

- 9%

Driver Benefits

- 11% 26%

- 6%

- 23%

TOTAL

- 12% 7% 10%

- 4%

Not surprisingly, fuel costs have continued to increase from 2009 and the 2012 CPM of

64.1 cents was the highest figure found over the five

- year study. The decrease in driver

wages and benefits (4.3 and 3.5 cents, respectively), however, had the largest impact

on the overall cost change. Several other key cost centers (equipment lease or

purchase payments, R&M, permits and licensing and toll costs) also contributed to the

overall decrease in operating costs.

Table 11 shows the c ost trends broken out by sector

. LTL carriers reported the largest

decrease in costs from 2011 to 2012 (7%) while Specialized and TL carriers each

reported a three percent decrease.

Table 11 . Cost Trends by Sector

Sector 2008

- 2009 2009

- 2010 2010

- 2011 2011

- 2012

LTL

- 21% 23% 10%

- 7%

TL

- 8% 5% 10%

- 3%

Specialized

- 11%

- 4% 11%

- 3%

Average costs were also calculated by region of operation in the U.S . (Table 12). 28

Carriers operating in the Southeast reported the lowest average costs ($1. 599 ) while

carriers operating in the Northeast reported the highest ($1. 724 ).

Line items may not sum to total shown due to rounding.

28 See survey in Appendix A for regions; Canada was excluded from this analysis.An Analysis of the Operational Costs of Trucking:

2013 Update 20 Table 12 . Average Carrier Costs per Mile by Region, 2012

Motor Carrier Cost Centers Midwest Northeast Southeast Southwest West USA

Vehicle

- based

Fuel Costs $0.641 $0.648 $0.621 $0.610 $0.664 $0.641

Truck/Trailer Lease or

Purchase Payments $0.192 $0.178 $0.168 $0.212 $0.191 $0.174

Repair & Maintenance $0.137 $0.157 $0.131 $0.118 $0.147 $0.138

Truck Insurance Premiums $0.063 $0.075 $0.058 $0.056 $0.067 $0.063

Permits and Licenses $0.023 $0.025 $0.024 $0.027 $0.023 $0.022

Tires $0.043 $0.047 $0.036 $0.047 $0.054 $0.044

Tolls $0.020 $0.032 $0.020 $0.016 $0.011 $0.019

Driver

- based

Driver Wages $0.418 $0.434 $0.427 $0.418 $0.408 $0.417

Driver Benefits $0.113 $0.128 $0.116 $0.121 $0.119 $0.116

TOTAL $1.650 $1.724 $1.599 $1.625 $1.684 $1.633

Top Industry Issues

ATRI conducts an annual survey 29 of industry stakeholders to identify and monitor the

issues that are most likely to affect the trucking industry in the coming years. Since its

inception in 2005, the survey has tracked the most pressing issues and compares the

results of previous years’ survey findings as an indicator of changing priorities in the

trucking industry.

Table 1 3 shows the relative rankings of the top five issues from 2008 to 201 2 . In 201 2

, the driver shortage and fuel costs ranked fourth and fifth on the list, respectively

. While

the driver shortage issue fell one ranking from 2011 to 2012, the top three issues (CSA,

Hours

- of

- Service and the economy) all have a direct impact on the driver shortage.

The “fuel supply/fuel prices ” topic remained at the same ranking from 2011 to 2012

. Since fuel costs continue to be one of the largest cost centers for fleets, diesel prices

are projected to remain one of the top issues in the coming years.

29 Critical Issues in the Trucking Industry

– 201 2 . ATRI. Arlington, VA. 201 2

.An Analysis of the Operational Costs of Trucking:

2013 Update 21

Table 13 . Top Industry Issues Survey Results, 2008

– 2012 30

2012 2011 2010 2009 2008

1. CSA 1. Economy 1. Economy 1. Economy 1. Fuel Costs

2. Hours

- of

Service 2. Hours

- of

Service 2. CSA 2010 2. Government

Regulation 2. Economy

3. Economy 3. Driver

Shortage 3. Government

Regulation 3. Fuel Issues 3. Driver

Shortage/

Retention

4. Driver

Shortage 4. CSA 4. Hours

- of

Service 4. Congestion/

Highway

Infrastructure 4. Government

Regulation

5. Fuel

Supply/Fuel

Prices 5. Fuel Issues 5.Driver

Shortage 5. Hours

- of

Service 5. Hours

- of

Service

CONCLUSION

Due to the success of the previous Operational Costs of Trucking analyses and the

industry’s continued interest in benchmarking data, ATRI has updated the previous

r esearch with 2012 data . This initiative documented, analyzed and tabulated

operational cos t data collected directly from for

- hire motor carriers as a means of

disseminating accurate, real

- world operational cost information to key decision makers.

In addition to serving as a high

- level motor carrier benchmarking tool, the objective of

this rese arch was to ensure that the appropriate data inputs were available for

transportation planning and investment models in order to estimate realistic costs and

benefits that accrue to commercial operators of the national highway system.

Motor carriers opera te in an extremely competitive market, with very thin profit margins

and must therefore be particularly attentive to all expenses, including marginal costs.

Based on data provided directly from motor carrier survey respondents , the average

CPM in 2012 was $1. 63 3 for the for

- hire segment of the trucking industry. Th is figure

was slightly lower than the average CPM of $1. 706 found in 20 11

.

The decrease in average operating cost s experienced from 20 11 and 201 2 was most

likely due to the weak recovery and softening freight conditions experienced in the

second half of 2012. 31 Fuel costs and driver wages continue to constitute the majority

of costs for motor carriers (6 5 % in 201 2, an increase from 62% in 2011). Given current

fuel price s, motor carrier fuel costs are almost certain to continue to be the first or

second largest cost center for fleets. Furthermore, increasing freight demand, new

government regulations and an aging workforce will continue to intensify the shortage of

30 Critical Issues in the Trucking Industry

– 2012. ATRI. Arlington, VA. 2012.

31 Starks, Jonathan. Trucking along at a snail's pace. OEM Off

- Highway. January 21, 2013. Available

online: http://www.oemoffhighway.com/article/10856526/trucking

- along

- at

- a

- snails

- paceAn Analysis of the Operational Costs of Trucking:

2013 Update 22 quali fied drivers. This will likely require carriers to increase wages and benefits in order

to recruit and retain drivers. All of these factors will likely place upward pressure on

motor carrier operating costs in the near future.An Analysis of the Operational Costs of Trucking:

2013 Update 23 GLOSSARY

For

- hire carrier

– a motor carrier that offers freight transportation services to the

general public.

Less

- than

- truckload carrier

– hauls a quantity of freight less than that required for the

application of a truckload rate, usually less than 10,000 pounds. Typically ma intain s a

“hub and spoke” model whereby carriers pick up smaller shipments, often on a set

route, and return to a base terminal where the packages are unloaded, sorted and

consolidated with other shipments going to similar locations. Line haul drivers move the

s hipments between terminals while pick

- up and delivery (P&D) drivers deliver

shipments to their final destination.

Longer Combination Vehicle

– a combination vehicle consisting of a power unit

(tractor) pulling more than one trailer. Common trailer config urations include doubles

(two 28 foot trailers), Rocky Mountain doubles (one 40 to 53 foot trailer and one 28 foot

trailer) and turnpike doubles (two 33 to 53 foot trailers).

Higher Productivity Vehicle

– includes combination vehicles that are longer or h eavier

than vehicle weight or dimension regulations typically allow.

Private carrier

– companies whose primary business is not hauling freight for

- hire but

that own or lease a fleet of trucks in support of their primary business.

Shipper

– a company th at hires a transportation company to move its freight.

Specialized carrier

– include s flatbed trailers, tank trucks and agricultural

- based

carriers as well as carriers dedicated to hauling government munitions, radioactive

waste and carriers utilizing spe cially permitted oversize/overweight loads.

Straight truck

– a vehicle with the cargo body and tractor mounted on the same

chassis.

Tractor semitrailer

– a combination vehicle consisting of a power unit (tractor) and a

semitrailer.

Truckload carrier

– h auls a quantity of freight that fills a semitrailer, usually more than

10,000 pounds. Generally haul s a dedicated load of freight for one customer (shipper)

to one destination (consignee). Many TL carriers will specialize in moving a specific

type of fre ight (e.g. refrigerated or hazardous materials).An Analysis of the Operational Costs of Trucking:

2013 Update 24 APPENDIX A

OPERATIONAL COSTS OF TRUCKING SURVEYOPERATIONAL COSTS OF TRUCKING SURVEY

The American Transportation Research Institute (ATRI) is conducting a strategic survey of for

- hire motor

carriers to update its previous reports on truck operational costs. This survey seeks those marginal costs

associated with operating a truck in 2012 . The findings of this survey will be used in several research

initiatives that address fuel costs, traffic congestion, and driver compensation and as input to various cost

benefit analyses of highway infrastructure improvements.

Your survey responses will be kept completely CONFIDENTIAL . Due to the sensitivity of this research,

under NO circumstances will we release any of your personal or organizational information.

Demographics

1) What is your company’s annual trucking

- related revenue? (Exclude brokerage/logistics revenue)

Less than $10 million/year 

$10

- $100 million/year 

Greater than $100 million/year 

2) What is your primary for

- hire business type? (Select one)

Truckload 

Less

- Than

- Truckload 

Specialized, Flatbed 

Specialized, Tanker 

Specialized, Express / Parcel 

Other (please specify): 

3) What is your company’s fleet size, average age and average number of miles (including owner operators)

traveled in a year for each unit?

Equipment Type Number of Units Average Age

(in years) Average Miles

Per Year Per Unit

Straight Trucks

Truck

- Tractors

28’ Trailers

45’ Trailers

48’ Trailers

53’ Trailers

Other (please specify):4) Does your company use longer combination vehicles (LCVs)?

If yes, what percentage of your company’s vehicle miles traveled in 2012 used LCVs?

% of 2012 miles

5) Would your company use heavier 6

- axle commercial vehicles (more than 80,000 pounds GVW, 3

- axle trailer) if

they were allowed without special permitting? (Select all that apply)

88,000 pounds 

92,000 pounds 

97,000 pounds 

No, would not use 

6) Are any of the trucks in your fleet powered by an alternative fuel (i.e. do not run exclusively on diesel or any

blended diesel)?

If yes, please indicate the number of trucks in your fleet that use each of the alternative fuels listed below.

Alternative Fuel Number of Trucks

Compressed Natural Gas (CNG)

Liquefied Natural Gas (LNG)

Electricity

Hybrid engine

Other (please specify):

7) Are any of the trucks in your fleet speed limited or governed?

If yes, please provide the maximum speed setting and the percent of your fleet governed at that speed.

Maximum Speed (mph) Percent of Trucks

8) What percentage of your drivers’ trips are in the following categories? (Total must sum to 100%)

Local pickups and deliveries (less than 100 miles)

Regional pickups and deliveries (more than 100 miles, less than 500 miles)

Inter

- regional pickups and deliveries (more than 500 miles, less than 1,000 miles)

National (greater than 1,000 miles)

Total: 100% Yes  No  Don’t Know 

Yes  No  Don’t Know 

Yes  No  Don’t Know 9) Please estimate the percentage of miles traveled by your fleet (include owner operator miles) in the following

regions. ( Total must sum to 100% )

2012 Operational Costs

10) Please list the pay per mile ($/mile) or pay per hour ($/hour) rates for the following types of SINGLE drivers in

2012. (If multiple pay rates for the same type of driver please use average pay rate.)

Type of Pay Company Driver/

Company Truck Leased Driver/

Company Truck Leased Driver/

Leased Truck Owner Operators

Pay per Mile $ $ $ $

Benefits per

Mile $ $ $ $

Pay per Hour $ $ $ $

Benefits per

Hour $ $ $ $

Additional

Incentive/Bonus Pay* $ / Average per Driver in 2012

*Include any additional financial incentives and/or bonus pay for drivers that are not part of their regular wages. Please

report as an annual average paid per driver.

11) Do you employ team drivers?

If yes, please list the pay per mile or pay per hour rates for the following types of TEAM drivers in 2012. (Please

use the pay rate for each individual driver. If multiple pay rates for the same type of driver, please use average pay rate.)

Type of

Pay Company Driver/

Company Truck Leased Driver/

Company Truck Leased Driver/

Leased Truck Owner Operators

Pay per Mile $ $ $ $

Benefits per

Mile $ $ $ $

Pay per

Hour $ $ $ $

Benefits per

Hour $ $ $ $

Additional

Incentive/Bonus Pay* $ / Average per Driver in 2012

* Include any additional financial incentives and/or bonus pay for drivers that are not part of their regular wages. Please

report as an annual average paid per driver. Region % of Total Miles

Midwest

Northeast

Southeast

Southwest

West

Canada

Total 100%

Yes

__ No

__12) Please list your 2012 costs (not rate) per mil e for the following key cost centers: (If the amount equals zero,

please enter 0. If the line item does not apply to your operations, please enter N/A.)

Expense Type 2012 Cost

per Mile

Repair & Maintenance

(Include R&M costs for all trucks and trailers.) $

Tires

(Include all purchase, maintenance, re

- treading and replacement costs.) $

Fuel Costs

(Include all transportation fuel; do not include fuel surcharge revenue.) $

Truck Insurance Premiums

(Include all liability, cargo and umbrella policy premiums.) $

Truck and Trailer Lease or Purchase Payments

(Include all interest/fees associated with the payments; do not include depreciation tax benefits.) $

Tolls $

Permits & Special Licenses

(Include oversize/overweight permits, Hazmat, etc.) $

Other (specify):

__________________________ $

Total $

13) What percent of your total annual miles were non

- revenue/empty miles in 2012?

Thank You! We greatly appreciate your participation.

Please enter your contact information below. Occasionally ATRI will follow up with survey respondents to clarify

answers. Your information will be kept strictly confidential.

Company/Organization Name Contact Name

Address Title

City, State Zip

Phone Email

%

# An Analysis of the Operational

Costs of Trucking: A 2013 Update

September 2013