Marginal cost of trucking fell in 2019, ATRI finds

The marginal cost of U.S. trucking decreased in the second half of 2019 due to an economic softening which included slumping driver wages, lower fuel prices, and a general slowdown of freight, transportation industry group The American Transportation Research Institute (ATRI) said today.

Specifically, the average marginal cost per mile incurred by motor carriers in 2019 decreased 9.3% to $1.65. In comparison to the last freight softening, which took place in 2016, marginal costs remained six cents higher, indicating the persistence of generally higher costs, ATRI said in a 2020 update to its report “An Analysis of the Operational Costs of Trucking.”

One factor of the trend was that combined driver wages and benefits decreased slightly, falling to 69.3 cents per mile in 2019 from 77.6 cents per mile in 2018. That move was a counterintuitive decrease given the driver shortage, which should have driven wages up in accordance with rising demand, ATRI said.

However, the study showed that carriers are clearly addressing the driver shortage through other mechanisms, since bonuses for drivers universally increased, with retention bonuses showing increases of over 80%.

For example, fleets have been offering more generous driver benefit packages in a bid to recruit and retain drivers, including things like paid tuition for a college degree, ATRI President and COO Rebecca Brewster said in a recent DC Velocity podcast.

Overall, ATRI recently found that the driver shortage was the top industry concern for the fourth year in a row, according to its “16th Top Industry Issues" report. Other worries were: truck parking, driver compensation and retention, and for the first time since 2005, insurance costs.

#ATRI just released its much anticipated 2020 Ops Cost Update, download it now from the website at https://t.co/IaafQbCIMc #trucking #truckingresearch

— ATRI (@Truck_Research) November 24, 2020