It can take quite a bit of investment on behalf of motor carriers to keep big rigs up and running, but thanks to increased oil production both at home and abroad, the commercial transportation industry has kept operational costs in affordable territory, a newly released report confirms.
Truckers spent approximately $1.59 per mile logged last year, according to recent data crunched by the American Transportation Research Institute. That's down 6 percent from 2014, when the average marginal cost per mile for the commercial transportation industry was $1.70.
Bob Costello, American Trucking Association's chief economist and ATRI Research Advisory Committee member, indicated that lower spending at the pump, combined with diminished travel due to the rocky economic recovery, contributed to the decrease. However, evidence suggests that operational costs may be edging higher.
"ATRI's 'ops cost' research is an excellent barometer of the state of the nation's economy, as it documented the softening in 2015 but also indicates that costs will be on the rise in 2016," Costello explained.
ATRI's most recent "Analysis of the Operational Costs of Trucking" report noted that "driver costs now represent a higher percentage of overall costs than does fuel."
"A gallon of diesel is selling for less than $2.50."
Fuel selling for $1 less than 2015
Though an increasing number of big rigs use unleaded, diesel is still far and away the most common fuel source for today's fleets. Unleaded regular has stayed in affordable territory for well over a year – averaging approximately $2.22, according to the U.S. Energy Information Administration – but diesel prices have also remained in low-cost territory. During the week ending Sept. 26, a gallon of diesel cost $2.38, nearly $1 below the national average this time last year.
Perhaps fueling the notion that operational costs have indeed risen for truckers in 2016 – which won't be known for certain until sometime next year – is the amount of tonnage that truckers are hauling. In August, ATA's For-Hire Tonnage Index rose nearly 6 percent from July on a seasonally adjusted basis. At 141.8, the total was only a few points shy of the all-time high experienced earlier this year. Additionally, on a year-over-year basis, the SA index was 5.9 percent higher, making it the largest annual uptick in three months.
"Volatility continues to reign in 2016," ATA Chief Economist Costello noted in a press release. "This month's tonnage reading highlights this fact and underscores the difficulty in determining any real or clear trend in truck tonnage. What is clear to me is that normal seasonal patterns are not holding in 2016."
Proof positive of this reality, Costello went on to state, is how this past August has compared with those from recent history. For example, the average change in the non-seasonally adjusted tonnage index was 0.3 percent. This time around, though, it shot up nearly 5 percent.
"With moderate economic growth forecasted, truck freight will improve as progress is made with the inventory overhang," he added.
"The ongoing driver shortage is a weighty issue."
Inventory glut creating challenges
Coupled with the driver shortage – which numbers in the tens of thousands – added inventory has made for heavy loads. Costello announced at the ATA Management Conference & Exhibition in Las Vegas that capacity has risen in recent years, which has stretched the industry and fleets to the limit. What may help ease the stress is free trade. ATA's chief economist noted how since the passage of the North Atlantic Free Trade Agreement, hauling for exports has outperformed domestic freight consistently with each passing year.
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