Trucking industry parts and labor expenses dropped during the second quarter of 2023, bringing improving news to fleets and service providers, according to data released today by the American Trucking Associations (ATA).
While economic and inflation pressures are still driving parts prices and labor rates to comparatively high levels, OEMs are effectively managing fewer supply chain disruptions that had negatively impacted production capacity, ATA’s Technology & Maintenance Council (TMC) and Decisiv said in their “North American Service Event Benchmark Report.”
With the steady elimination of pent-up demand, fleets are finally taking delivery of new, less repair intensive trucks. Additionally, the influx of replacement vehicles and lower freight volumes are decreasing the demand for service and repair activity and consequently lowering parts and labor costs.
More specifically, after an extended period of cost increases, the combined parts and labor costs for the top 25 VMRS codes fell 1.3% in the second quarter from the first. Labor costs decreased for the first time in the past year and parts costs were down for the second quarter in a row. On a year-over-year basis, from combined parts and labor costs rose only 5.57% in the second quarter of this year compared with the same period last year – which is far slower than the 15% increase in costs seen 2022.
The data comes from Decisiv’s Service Relationship Management (SRM) platform, which is used to handle service and repair events for more than 7 million commercial assets operating across the U.S. and Canada. The system is being used to manage a weekly average of 70,000 service events at nearly 5,000 locations.
“With rising build rates for new equipment and less mileage reducing the need to operate aging trucks, fleets are finally seeing a definite improvement in parts and labor costs,” Decisiv President and CEO Dick Hyatt said in a release. “The data that Decisiv collects and analyzes for TMC on Vehicle Maintenance Reporting Standard system level codes points to a return to normalized trade cycles and more predictable service and repair costs. Along with greater stability, the highly detailed data and reporting enabled by Decisiv SRM allows fleets and service providers to focus on ways to continue to drive down expenses.”
Looking ahead, there is a growing expectation that service and repair costs will find a new equilibrium and consequently settle into a more predictable cycle in line with what was experienced in the past, ATA said in the report.