The cost of operating a Class 8 truck has increased, averaging $1.69 per mile in 2017, up six percent over the previous year. On a time-oriented basis, the average cost per hour for motor carriers increased to $66.65 in 2017 from $63.66 in 2016. Cost increases were broad-based in 2017, with growth in nearly every major line item over the year.
That is according to the 2018 update to “An Analysis of the Operational Costs of Trucking” released by the American Transportation Research Institute (ATRI). The research documents and analyzes trucking costs from 2008 through 2017 using financial data provided directly by motor carriers throughout the country.
ATRI found that fuel costs and driver wages rank consistently as one of the biggest cost centers for motor carriers on an annual basis. However, the age, type and turnover rates of a motor carrier’s equipment have both direct and indirect effects on several key cost centers for motor carriers. Equipment-related decisions also indirectly affect other operational costs like fuel and insurance premiums.
Congestion costs are also on the rise, with traffic congestion on the U.S. National Highway System (NHS) adding nearly $74.5 billion in operational costs to the trucking industry in 2016, a 0.5 percent increase over 2015, ATRI’s “Cost of Congestion” analysis reported. Congestion costs are increasingly concentrated on a relatively small proportion of the NHS, ATRI said, with 86.7 percent of total nationwide congestion costs occurring on just 17.2 percent of NHS segment miles.
Increasing costs can make it difficult for chief financial officers to plan and maintain their budget, which is one of the benefits of a full-service lease. Penske offers a single monthly lease payment, which includes maintenance and upkeep costs, making it easier to forecast expenses and establish budgets.
Leasing can also free up capital that businesses can use to grow other parts of their business. With a lease, there is no down payment and funds are available for investment in other appreciating and revenue-producing assets.
What’s more, leasing can reduce maintenance and repair expenses since a full-service lease covers maintenance and repairs at predictable monthly costs. This can be especially useful as new technology, which can often bring unpredictable maintenance costs, enters the market.
Plus, outsourcing with Penske lowers the total costs to operate a vehicle over the vehicle’s lifetime. Penske has bulk purchasing power to source the best parts at the best prices in addition to a nationwide network of service locations that attract the highest-quality technicians and provide wide service coverage.
Penske can also offer fueling services to its customers, giving them the advantage of Penske’s buying power. ATRI noted that fleet size is an important characteristic that can affect a carrier’s fuel costs, as larger fleets can leverage their scale to negotiate discounts and can engage in more sophisticated price hedging strategies or use technology to distribute their fleet’s trips in a more fuel-efficient manner. With Penske, carriers can take advantage of that group purchasing ability regardless of how many trucks are in their operation. Also, late-model equipment can drive increased fuel efficiency.
The numbers are also easy to review with a lease. Penske’s billing and record keeping provide easy-to-understand information that can be viewed with a few clicks of a mouse. This information is particularly useful in the event of an audit or if additional details are needed.