Costs per mile decreased for fleets during the lighter traffic on most U.S. roads during the height of the COVID-19 pandemic plagued 2020 while driver compensation fell slightly, according to a new report from the American Transportation Research Institute.
ATRI released the findings of its 2021 update to An Analysis of the Operational Costs of Trucking. The new “Ops Costs” research is based on detailed 2020 financial data provided directly by motor carriers of all sectors and fleet sizes and documents the effect that the pandemic had on overall operating costs such as driver compensation, fuel costs, insurance premiums, and more.
According to the report, motor carriers' average cost per mile decreased in 2020 due to reductions in two key cost centers: driver benefits and fuel.
Driver wages increased from 2019 to 2020, but driver benefits declined by a greater amount, with the result that overall driver compensation declined slightly from 74.4 cents to 73.7 cents, the report explained. Due to the decrease in overall marginal costs, driver compensation nonetheless made up the highest-ever share of the total, at 44%. Driver bonuses, once again, showed increases this year.
Safety and retention bonuses increased by 10.5% and 14.2% respectively, but starting bonuses dropped by 10%—reflecting the soft driver marketplace in early 2020 for many sectors.
In addition to faster truck speeds, COVID-19 impacts were considerable:
- Dead-head miles increased to 20.6%
- Annual operating miles decreased to 89,358 miles per truck
- Fuel costs declined by nearly 20% to 30.8 cents per mile
Independent of COVID-19 impacts, insurance costs continued their climb, rising more than 18% to 8.7 cents per mile—the highest in the Ops Costs report history.
"Carriers are faced with increasingly difficult decisions for mitigating costs without risking overexposure as insurance rates continue to increase" the report stated. "Under these circumstances, carriers are showing more and more willingness to stake their own risk on safety technology investments and driver development programs. As such, carriers that can afford to do so will transfer more of their total cost of risk to equipment and compensation cost centers."
Overall, the average marginal cost per mile incurred by motor carriers in 2020 decreased 5 cents per mile to $1.64. When the per-mile costs are converted to hourly costs, the report found that total hourly costs dropped slightly to $66.87.
"The COVID-19 pandemic made 2020 a historically unprecedented year for the global economy," the report concluded. "Despite encountering numerous logistical difficulties, the trucking industry performed with admirable consistency, and so did its marginal costs. Carriers were able to take advantage of some unexpected windfalls, such as unusually low fuel costs and highway traffic, to offset heightened expenses in other areas."