Connect with us

Business

ATRI 2019 ops report: Average carriers’ marginal costs per mile up 7.7% in 2018

Published

on

ATRI’s 2019 Ops Costs report show repair and maintenance costs, at 17.1 cents per mile in 2018, have increased 24% since 2012, a counterintuitive increase given the record sales of new trucks and trailers. (Courtesy: ATRI)

ARLINGTON, Va. — The American Transportation Research Institute said Monday that the average marginal cost per mile incurred by motor carriers in 2018 increased 7.7% to $1.82.

The finding was a key data fact in ATRI’s 2019 update to “An Analysis of the Operational Costs of Trucking.”

Costs rose in every cost center except tires, with fuel costs experiencing the highest year-over-year growth of 17.7%. Not surprisingly, insurance costs saw the second fastest year-over-year growth at 12%. As a strategic response to the severe driver shortage that existed in 2018, driver wages and benefits increased 7.0 and 4.7%, respectively — representing 43 percent of all marginal costs in 2018.

Repair & maintenance costs, at 17.1 cents per mile in 2018, have increased 24% since 2012, a counterintuitive increase given the record sales of new trucks and trailers. From 2012 to 2018, overall motor carrier operational costs have increased more than 11.6%, exceeding the 10.8 percent inflation rate for that same time period.

“ATRI’s 2019 Operational Costs research highlights the extent of the cost increases our industry experienced in 2018. Savvy carriers will continue to use this cost data as a benchmarking tool, and to better educate our customers on the financial and operating pressures our industry faces,” said Jerry Sigmon, Executive vice president of Cargo Transporters. “The new 2019 report also gives us important explanations and hints on how to better manage the cost volatility we’ve been experiencing.”

Since its original publication in 2008, ATRI has received over 16,000 requests for the Operational Costs reports.

ATRI’s newest 2019 Ops Costs report documents the extremely robust economic environment that carriers and drivers experienced in 2018, but these same economic conditions put considerable upward pressure on nearly every line-item cost center experienced by carriers.

Using detailed financial data provided directly by motor carriers of all sectors and fleet sizes, this “Ops Costs” research annually documents and analyzes trucking costs from 2008 through 2018. ATRI’s analysis provides industry stakeholders with an essential benchmarking tool, and government agencies with input on industry finances necessary for comprehensive transportation planning and infrastructure improvement analyses.

A copy of this report is available from ATRI at www.TruckingResearch.org.

 

 

.

 

 

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

ACT Research freight forecast: TL contract rates turn lower with more to go

Published

on

This chart provided by ACT Research shows that after two years of rates favoring motor carriers, truckload rates in 2019 have generally favored the shippers. (Courtesy: ACT RESEARCH)

COLUMBUS, Ind. — ACT Research released the November installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report covering the truckload, intermodal, LTL and last mile sectors and the gauge still shows the rates favoring shippers.

The ACT Freight Forecast provides three-year forecasts for volumes and contract rates for the truckload, less-than-truckload and intermodal segments of the transportation industry, and for the truckload spot market, the report forecasts the next twelve months. The Freight Forecast provides unmatched detail on the future of freight rates, helping businesses across the supply chain plan for the future with confidence.

Based on ACT’s For-Hire TL Carrier Database, TL contract rates fell to $2.28 per mile in Q3, down 2% year over year, following a 3% increase in the second quarter.

“We’re seeing evidence that a bottoming process is beginning in the truckload cycle from truck order and survey data,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “It will be gradual, but we think spot rates will turn positive in mid-2020. Meanwhile, for-hire freight volume continues to be soft, pressured by ongoing private fleet capacity additions, so we don’t think we’ve seen the worst of the contract rate pressure yet.”

Denoyer cautioned carriers not to jump to the conclusion that capacity is tightening because of carrier failures.

“Those are not unusual in this business and the fact is U.S. fleets bought more new Class 8 tractors in September than any month in history,” he said. “So, capacity is not yet tightening, and build plans are still above replacement for the next six months. Rather, roughly 10k net new tractors were added to US highways in September, mainly by private fleets.”

Denoyer said freight had softened since the September 1 tariff imposition, because in part of the temporary strike at GM, and declines have broadened to every major rail category except petroleum.

“As GM ramps production back up, the major declines in fourth quarter to-date rail volumes should moderate somewhat,” he said.

ACT Research is a leading publisher of commercial vehicle truck, trailer and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies.

More information can be found at www.actresearch.net.

 

 

 

Continue Reading

Business

FTR, ACT Research report Class 8 orders in October at 22,100 units

Published

on

Class 8 orders were the star of October, rising to an 11-month high, according to ACT Research President and Senior Analyst Kenny Vieth. (Courtesy: DAIMLER TRUCKS NORTH AMERICA)

The two companies that track and analyze the large truck market both reported North American Class 8 October orders at 22,100 units.

FTR said the order level was the highest since November of 2018, but still far below a year ago.  October 2019 order activity was the weakest performance for an October since 2016.

FTR said that while October orders were the highest this year and up 79% month over month, they were 51% lower than October 2018, signifying a subdued beginning to the traditional start of the ordering season.

FTR said the order level was boosted by a couple of big fleets placing large orders into 2020, but otherwise smaller orders were placed for the first quarter build.  Cancellations are expected to remain elevated as OEM’s shake out excess 2019 orders from the backlog. Class 8 orders for the past 12 months have totaled 192,000 units.

“Orders increased in October as expected, however, caution prevails,” said Don Ake, vice president commercial vehicles. “The trade and political turmoil are producing a highly uncertain business environment. Fleets are only ordering for their immediate needs. They are not willing to speculate much beyond the first quarter of next year. The OEMs have plenty of open capacity right now, so carriers are willing to approach 2020 a step at a time.”

Ake said orders were fair in October.

“Freight growth is flat, as the industrial sector slows and manufacturing struggles a bit. Orders are expected to stay in this range for a few months until there is more confidence in the economy and less turbulence in the trade war and political arena,” he said.

Kenny Vieth, ACT’s president and senior analysts, noted that the industry kicked off  “order season” in an encouraging fashion with preliminary order rising to a six-month high in October.

“Class 8 orders were the star of October, rising to an 11-month high,” he said. “While freight market conditions remain weak, the market is arguably benefiting from a substantive change in the “must-have” tractor spec.”

Regarding the medium duty market, Vieth said the fade that started in medium-duty orders during the summer lingered into the start of quarter four and if the preliminary order read stands as printed, October will represent a 40-month order low.

Continue Reading

Business

Bendix Commercial Vehicle Systems named one of America’s safest companies for 2019

Published

on

Bendix Commercial Vehicle Systems is one of only 16 companies to earn distinction from EHS Today, honoring commitment to employee safety and health, environment management and risk control. (Courtesy: BENDIX COMMERCIAL VEHICLE SYSTEMS)

ELYRIA, Ohio — Coming off the safest year in its nearly 90-year history, Bendix Commercial Vehicle Systems has been honored with a major corporate award recognizing its pursuit of safe operations.

The company was named to EHS Today’s 2019 list of America’s Safest Companies, an annual award recognizing the safest companies in the United States. Bendix joins 15 other companies to be selected by the publication’s editors.

EHS Today, a magazine for environment, health and safety leaders, founded America’s Safest Companies in 2002. Since then, more than 250 companies have earned the distinction. At a ceremony that was part of its 2019 Safety Leadership Conference in Dallas, Texas, EHS Today presented the award to Bendix and the other 2019 honorees.

“From the operations floor to the executive suite, employees throughout the Bendix organization strive to maintain the highest possible standard of safety, a value deeply held in our company culture,” said Carlos Hungria, Bendix chief operating officer. “This is an important part of our journey to operational excellence, and we are truly honored to be named among America’s Safest Companies with our 15 fellow recipients. The award reflects our unwavering commitment to ensure the well-being of each and every individual who sets foot inside a Bendix facility.”

To be considered one of America’s Safest Companies, companies must demonstrate transformational environmental, health and safety leadership in the form of support from management and employee involvement; innovative solutions to safety challenges; injury and illness rates significantly lower than the average for their industries; comprehensive training programs; evidence that prevention of incidents is the cornerstone of the safety process; excellent communication internally and externally about the value of safety; and a way to substantiate the benefits of the safety process.

An attitude of no compromise best describes Bendix’s pursuit of safe operations, which is built around the goal of zero injuries, Hungria said. In 2018, that unified mindset helped the company achieve its safest year ever. Of Bendix’s 18 North American locations, nearly all achieved significant safety milestones, and cumulatively experienced a 30 percent reduction from 2017’s injury rate. At the heart of the results are preventive and corrective safety programs, as well as processes and rituals that empower employees to help improve safety.

Bendix has implemented mature safety processes, which continue to drive noticeable improvement in year-over-year safety results, Hungria said, adding that part of the long-term strategy of the Health, Safety and Environmental (HSE) team, these processes include a 24-hour incident notification and containment policy; Safety Shares, a practice begun in 2019 involving the sharing of a personal safety lesson at the start of each meeting; lessons learned from incident sharing across all of Bendix’s plants to identify and eliminate similar risks; among others.

In addition, engagement opportunities through the Safety STARS (Safety Top Achievement Recognition System) program enable employees to take on a key role in identifying unsafe conditions, unsafe behaviors, and safety improvements.

Key to the success of the safety program has been the integration with the Knorr Production System (KPS) quality, productivity, and continuous improvement culture. KPS is practiced worldwide throughout the Munich, Germany-based Knorr-Bremse Group, of which Bendix is a member. KPS tools and rituals have helped quantify improvement activities, increase visibility to safety losses, escalate safety concerns, and drive team-level ownership of safety.

“We’re so proud of our team members in Bendix blue who come to work every day 110 percent committed to performing their jobs safely,” said Maria Gutierrez, Bendix director of corporate responsibility and sustainability. “Their dedication made the America’s Safest Companies recognition possible. We look forward to reaching more milestones as we continue on Bendix’s safety journey.”

 

 

 

 

Continue Reading

Trending