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ATRI report says motor carriers’ marginal cost per mile rose 6 percent in 2017

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ARLINGTON, Va. — With economic activity strengthening in 2017, the average marginal cost per mile incurred by motor carriers increased 6 percent to $1.69, according to the American Transportation Institute’s 2018 update to “An Analysis of the Operational Costs of Trucking,” which was released Tuesday.

Using financial data provided directly by motor carriers throughout the country, this research documents and analyzes trucking costs from 2008 through 2017, providing trucking industry stakeholders with a high-level benchmarking tool and government agencies with a baseline for future transportation infrastructure improvement analyses.

ATRI said cost increases were broad-based in 2017, with growth in nearly every major line-item over the year.

However, even though the year-over-year average marginal costs per mile increased both in 2016 and 2017, it is lower than it was in 2014, when the costs per mile was $1.703.

Driver wages increased for the fifth consecutive year. The combined cost of driver wages and benefits represent 43 percent of the overall cost per mile.

The ATRI report noted that driver compensation, inclusive of wages, benefits and bonuses, has been the biggest source of cost increases incurred by motor carriers since 2012.

Even when overall marginal costs were declining due to falling diesel fuel prices, increases in driver wages and benefits served as mitigating factors.

At the same time, driver bonuses, while not a marginal cost, have been robust as carriers seek to entice new entrants into the industry, retain their existing workforce, and reward drivers for excellent safety and operational performance.

The driver bonus cost center is growing quickly is in the amount and types of bonuses employers offer to drivers.

A growing majority (62.7 percent) of respondents indicated that they pay drivers some type of financial incentive or bonus beyond wages.

Survey respondents listed their most common incentives and bonuses as safe driving, on-time delivery performance, and additional financial incentives to attract and retain qualified drivers.

Respondents reported paying drivers an average bonus of almost $1,300 for safe driving in 2017, a decrease from the $1,500 paid out to drivers in 2016.  On the other hand, drivers who met the criteria for on-time delivery bonuses were rewarded handsomely in 2017, receiving an

average annual bonus of approximately $2,500, well above the rate of $1,950 observed in 2016.

With respect to future driver compensation, the survey report said that while the freight market in 2017 saw freight demand improvements from 2016, the freight market has boomed in 2018.  With this strong demand for truck transportation, the report said, shippers are experiencing severe truck capacity constraints due in part to the driver shortage.

Numerous reports indicate that carriers have had to increase driver pay and expand benefits packages yet again in 2018 in an effort to recruit and retain truck drivers.  Additionally, a majority of motor carriers now offer sign-on/stay-on bonuses to improve recruitment and retention efforts, while other carriers have been forced to raise their bonus offers to remain competitive.

As a result, the overall compensation package offered to drivers can be expected to improve further in 2018, boosting the related line-item marginal cost centers.

Fuel prices rebounded from decade-lows and the growing cost and sophistication of newer truck models continues to drive up costs for both purchasing and repair and maintenance.

There is a significant variance on fuel costs when broken into fleet size.

Fleets with more than 1,000 power units averaged 31.3 cents per mile while fleets with between 251 and 1,000 power units averaged 31.8 cents per mile.

Those figures compared with an average of 46.1 cents per mile for fleets with 26-100 power units and 43.6 cents for fleets with between 101 and 250 power units.

At the time of the report was released, national diesel prices were $3.26 per gallon, up 23 percent from the average price observed across 2017.

Diesel prices are projected by the EIA to remain near this level for the remainder of the year.

Although fuel prices are known to be highly volatile due to geopolitical concerns and unpredictable supply disruptions, it is clear that motor carriers can expect fuel costs to continue to exert upward pressure on overall line-item marginal costs in next year’s report.

Overall, motor carrier operational costs have now surpassed the 10-year average since ATRI began its annual Ops Costs research.

The average marginal costs per hour increased to $66.65 in 2017, compared with $63.66 in 2016.

ATRI’s 2018 report also includes a new “Industry Sector in Focus” analysis, this year reporting operational costs for tank fleet operators.

“ATRI’s Operational Costs research is such a powerful tool for fleets of all sizes. Better understanding how our costs stack up against our industry peers enables us to implement operational efficiencies and improve our bottom line,” said Dean Kaplan, CEO of K-Limited Carrier.

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Women In Trucking names its 2019 top woman-owned businesses

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Angela Eliacostas is the founder and owner of AGT Global Logistics, one of the companies the Women In Trucking Association has named its 2019 Top Women-Owned Businesses in Transportation. (Courtesy: Women in Trucking)

PLOVER, Wisc. —  The Women In Trucking Association (WIT) has announced its annual list of the “Top Woman-Owned Businesses in Transportation.”

The names of the companies being recognized in 2019 were released in the latest edition of Redefining the Road, the official magazine of WIT.

WIT created the list was created to recognize women in leadership and encourage more women to become proactive leaders in their organizations and even start their own businesses, WIT president and CEO Ellen Voie said. The program supports WIT’s overall mission “To encourage the employment of women in the trucking industry, promote their accomplishments, and minimize the obstacles they face.”

Entrepreneurship is a viable means of economic self-sufficiency, and many women are choosing an enterprise connected to transportation to be part of their career aspirations, according to Brian Everett, publisher of Redefining the Road.

Companies considered for the recognition must meet criteria that includes majority ownership by a woman, financial stability and growth, innovation and entrepreneurial spirit. Each company was nominated and chosen based upon business success and accomplishments, including those related to gender diversity.

This year’s list includes companies from a diverse range of business sectors in the commercial freight transportation marketplace, including motor carriers, third-party logistics companies and original equipment manufacturers.

Companies named to the 2019 “Top Woman-Owned Businesses” list and their primary female business owners are:

  • Bennett International Group; Marcia G. Taylor, CEO
  • Kenco Logistics; Jane Kennedy Greene, chairwoman
  • London Auto Truck Center; Donna Childers, vice president
  • Rihm Family Companies; Kari Rihm, president and CEO
  • Veriha Trucking, Inc.; Karen Smerchek, president
  • Rush Trucking Corp.; Andra Rush, CEO
  • Aria Logistics; Arelis Gutierrez, CEO
  • Lodgewood Enterprises; Arlene Gagne, president
  • S-2international, LLC; Jennifer Mead, CEO
  • International Express Trucking; Karen Duff, president and CEO
  • Brenny Transportation, Inc.; Joyce Brenny, CEO and founder
  • Knichel Logistics; Kristy Knichel, CEO
  • Garner Trucking; Sherri Garner Brumbaugh, CEO
  • LYNC Logistics; Cindy Lee, president
  • Ontario Truck Training Academy; Yvette Lagrois, president
  • AGT Global Logistics; Angela Eliacostas, owner and founder
  • Powersource Transportation; (Barb Bakos, president
  • LaunchIt Public Relations; Susan Fall, president
  • United Federal Logistics, Inc.; Jennifer Behnke, president
  • BCP Transportation; Nancy Spelsberg, Ardis Jourdan, Kristie Rozinski
  • Ladybird Logistics Ltd.; Felicia Payin Marfo, managing director
  • DGT Trucking; Donna G. Sleasman, owner
  • RFX Inc.; Kimberly Welby, president and CEO)

These companies will be recognized during a special program at the Women In Trucking Accelerate! Conference & Expo, Sept. 30 – Oct. 2 in Dallas. For more information, visit WomenInTrucking.org.

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ATA Truck Tonnage Index falls 1.1% in June, but 1.5% higher than June 2018

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Compared with June 2018, the SA index increased 1.5%, the smallest year-over-year gain since April 2017.

ARLINGTON, Va. — The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 1.1% in June after falling 4% in May. In June, the index equaled 115.2 (2015=100) compared with 116.5 in May.

“Tonnage continues to show resilience as it posted the 26th year-over-year increase despite falling for the second straight month sequentially,” said ATA Chief Economist Bob Costello. “The year-over-year gain was the smallest over the past two years, but the level of freight remains quite high. Tonnage is outperforming other trucking metrics as heavy freight sectors, like tank truck, are witnessing better freight levels than sectors like dry van, which has a lower average weight per load.”

May’s reading was revised up compared with our June press release.

Compared with June 2018, the SA index increased 1.5%, the smallest year-over-year gain since April 2017.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 117.6 in June, 3.3% below May level (121.7). In calculating the index, 100 represents 2015.

Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

 

 

 

 

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JK Moving modernizes moving with mobile app and virtual AI estimating options

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The JK mobile app enables clients to go onto the app to receive and review estimates; accept and edit estimates; make payments; communicate with their sales consultant and move coordinator; and prepare for the move day. (Courtesy: JK MOVING)

STERLING, Va. — JK Moving Services, a global moving, storage, relocation and logistics enterprise, says it has added new technologies to further modernize the move experience for customers, including a mobile app to help the customer manage the move process and software to do virtual estimates with either a real person or by an artificial intelligence interface.

“Great technology makes for better moves and that’s why we invest in cutting-edge solutions. Mobile apps and AI are now part of our customer tool kit,” said CEO Chuck Kuhn. “Giving clients choices in how they work with us helps us meet a variety of customer needs and styles.”

Kuhn said JK’s tech team had created a downloadable mobile app that enables clients to go onto the app to receive and review estimates; accept and edit estimates; make payments; communicate with their sales consultant and move coordinator; and prepare for the move day. The app is monitored 24/7 by the JK team.

Since this custom app was developed in-house, JK is able to incorporate feedback and improvements quickly, Kuhn said, adding that the mobile app complements new estimating software that clients can use to get a virtual estimate.

The client gives a tour of their house with their phone to their choice of a real or AI representative. The AI estimating software recognizes shapes of objects and makes an inventory list. From that tour, JK can provide an estimate and send it to the mobile app. Estimators still are available to come to someone’s house if that is what the client prefers.

“Going mobile improves our customer offerings since many clients want products that are seamless, easy and quick. We’re receiving terrific feedback for our new mobile app and virtual estimating. These tech advancements put us at the forefront of the residential moving business,” said David Cox, executive vice president, residential, JK Moving.

Cox said the mobile app also reduces the use of paper, which is good for the environment. Environmental stewardship is part of the JK culture and a consideration in many of the company’s innovations.

“In fact, JK was one of the first on many environmentally friendly practices, including: ordering Tesla semi moving trucks, embracing new technologies that will further its aggressive carbon emissions-reduction goals, leading with box-less moves and major recycling efforts, and starting a chemical free community farm,” he said.

Another recent modernization includes the addition of dashcam technology in its whole fleet. These cameras are installed in the truck cabs. When a trigger event happens, such as a sudden stop or jostling movement, a 12-second video clip gets sent to DriveCam, a third-party vendor that monitors and evaluates the incidents. DriveCam sends JK feedback when opportunities arise to improve driving behaviors, enabling JK to provide customized training to drivers. The dashcams have resulted in employees improving their driving skills and experiencing fewer triggering events, resulting in fewer accidents and a reduction in claims.

 

 

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