The American Transportation Research Institute recently released the 2023 version of its annual “Operational Costs of Trucking” report. Started in 2008, this yearly report provides extensive data on both trucking industry operations and costs metrics, which serves as an invaluable resource when attempting to analyze and respond to current industry trends.
Perhaps the most significant takeaway from the report is that 2022 was the costliest year to operate in the trucking industry in its 15-year history. While the instinct might be to blame much of this on record-high fuel costs, the report notes that assessment is still true even when removing fuel from calculations. Other costs, both planned and unplanned, greatly contributed to the increase as well.
However, as you’ll see, this past year wasn’t all doom and gloom when it came to trucking industry trends. Read on to discover a few of our most significant takeaways from ATRI’s 2023 report.
Cost of trucking reaches record high
As we mentioned, perhaps the most notable information to come out of 2023’s report is the data showing a record-high cost of trucking. In 2022, the cost of operating a truck increased to $2.251 per mile.
This figure is not only a record high, but also the first time that operating cost per mile has eclipsed the $2.000 mark in the history of the report. Fuel costs played a major role in this increase but were far from the sole reason, despite the nearly 54 percent increase in spending across the industry.
With fuel included, the cost of trucking increased by just over 21 percent, compared to a 12-percent increase without fuel included. The industry also experienced a record high in costs per hour with an average total of $90.78.
So, if fuel costs weren’t the sole reason for record operating costs, what were the other factors? According to ATRI data of trucking industry trends, all the following expenses also set record highs for marginal costs:
Repair and maintenance
Truck and trailer payments
Auto liability insurance premiums
Higher wages, less turnover
The last area on that list, driver wages, is particularly interesting because driver compensation has often been listed as a primary factor in one of the industry's top concerns: driver turnover.
The findings from this report indicate that driver wages (including company drivers, owner-operators and contracted drivers) increased by a total of about 16 percent over the past year. This is the fastest rate increase for driver wages since the ATRI began observing driver wage data. Driver benefits, however, remained mostly stagnant with a less-than-one-percent increase in that same time span.
With that said, it’s too early to tell if (or how much) the collective wage increase will mitigate the rate of driver turnover in the future.
This is especially true when considering the cost increases that trucking companies have experienced within other areas. It also goes without saying that truck driving is an incredibly demanding job that can have a deep impact on a person’s physical and emotional health.
Companies can make changes in several areas to improve the individual driver’s experience and working conditions. However, the inherent challenges that come with truck driving will always lead to some degree of turnover.
Still, if the belief is that higher wages will reduce turnover, the early returns are positive. In 2022, truckload fleets of all sizes experienced improved turnover rates (although LTL carriers did experience a slight increase).
The report does note that lower turnover rates in 2022 may have correlated with factors such as economic uncertainty and concerns with falling freight volume. Even with that context, the data itself is one more encouraging trucking industry trend from the past year.
Parking remains top issue for drivers
Truck parking was, once again, at the very top of the list when it came to driver concerns in 2022. A lack of safe and accessible parking has been one of the most consistent trucking industry trends for decades. However, drivers note that the issue has continued to worsen in recent years.
A 2022 study from the United States Department of Transportation (USDOT) revealed that there is currently just one parking spot for every 11 trucks on the road. In the short-term, the report notes that carriers and drivers are mitigating the issue by using both real-time parking information and truck reservation systems to manage capacity.
However, this has also led to issues with parking and reservation fees, stemming from a disconnect in what both drivers and carriers are willing to pay. While nearly a third of truckload carriers compensated their drivers for parking reservations, that figure is down over 20 percent overall from 2021 (but still over double the 2016 percentage).
Long-term, the issue will almost certainly require federal legislation. The last major piece of legislation passed by congress to address the parking shortage was Jason’s Law in 2012. Subsequent studies since its passing revealed that over 90 percent of drivers have struggled in some capacity to find safe parking.
Congressional assistance to address wide-ranging concerns with parking could be on the way, however. In December 2022, the Truck Parking Safety Improvement Act was introduced and has since received increasing bipartisan support. If passed, the project would authorize $755 million in grants that would be used to expand parking capacity by adding thousands of new parking areas over the next few years. The funds would also be used to improve existing parking areas.
Small fleets vs. large fleets
The trucking industry trends mentioned above (and outlined in the report) can have wide-ranging affects for drivers and carriers everywhere. Particularly with costs, however, small and large carriers alike have and will continue to face unique challenges related to their size.
And when it comes to size, small fleets continue to make up the vast majority of registered motor carriers. Nearly 96 percent of fleets have 10 or fewer trucks, according to ATRI data obtained through the USDOT.
Drivers working for these small fleets often have the benefit of added flexibility and less internal bureaucracy. However, comparatively speaking, these benefits often come with the trade-off of lower wages and/or less benefits. Drivers with large companies, meanwhile, tend to have a more rigid internal structure but gain the benefits stemming from reduced fuel and equipment costs.
With that said, smaller fleets are remaining competitive even as driver wages increase. The current average wage for small fleet drivers sits about 4 cents lower per mile. This is despite small carriers spending an average of nearly 8 cents more per mile than large carriers.
While fuel is one of the primary reasons for this gap, you can also attribute it to the fact that small carriers spent over 33 percent more on insurance premiums than large ones in 2022. Perhaps as a result, large fleets were able to devote more of their spending toward driver benefits, while small fleets spent less than the previous year.
It’s far too soon to make any declarations one way or the other. However, it’s fair to wonder how small fleets will continue to adapt to current trucking industry trends. In 2022, data showed that an increasing number of small trucking companies are going out of business due to high operating costs. While there are ways that carriers can reduce these costs, a widening gap in spending could exacerbate this issue.
For more information from the ATRI’s 2023 report, download the full report from their website.