Study: Operational Fuel Costs Fall for Trucking Fleets in 2016

Falling fuel prices and a soft economy have reduced the operational fuel costs in the trucking industry over the last year, according to a new study by the American Transportation Research Institute. Those gains, though, have not come with the help of emerging diesel fuel saving technologies, and fuel prices are already showing signs of heading up again.

Last month, OPEC agreed to their first modest oil output cuts since 2008, with the group’s leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices. The Cold War between Iran and Saudi Arabia over the last decade has been one of the chief factors in cheap oil, and lower diesel fuel prices. If these two oil titans manage to reach a lasting détente, expect oil to surge upward, experts say.

Fuel Prices Are Low, But for How Long?

For truckers, the average marginal cost per mile in 2015 was $1.59, a 6 percent decrease from the $1.70 found in 2014. This fall is attributed mostly to the 31 percent fall in fuel prices experienced throughout 2015, but the ATRI study also identifies the late-2015 economic softening that continued into 2016.

Whether that “softening” continues is anybody’s guess. Some experts point to a continued recovery in the economy continuing into 2017. Moreover, the rise of Amazon and other online retailers has merely flipped the fuel spend formula. Rather than customers burning gas to go to their local mall or Best Buy, the fuel is now being burned by Federal Express, UPS and other carriers who are bringing groceries, clothing and other goods directly to the home. Then trend shows no sign of lessening.

Drivers Now Cost More Than Fuel

In fact, fuel costs have now fallen to such a point that driver costs now exceed fuel for trucking companies. In 2015 fuel costs averaged 40.3 cents per mile, while driver wages and benefits cost fleets an average of 63 cents.

Driver pay accounted for 31 percent of total expense at 49.9 cents per mile, according to the study. Fuel finished at 25 percent of total expenses, the lowest percentage since the cost study began. Insurance costs rose 29 percent to 9.2 cents per mile, and equipment payments rose 7 percent to 23 cents per mile. Repair and maintenance costs were little changed at 15.6 cents per mile. So were costs for tires, permits and licenses, and tolls.

Trucking Fleets Are Aging

“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,” Bob Costello, chief economist for the American Trucking Associations and a member of the ATRI research advisory committee, told TruckingInfo.com

But fleets are aging – the average fleet age increased to 8.7 years in 2015 compared to 7.4 years in 2014 – and this trend points to the ever-growing pressure to keep costs down. Moving forward, companies are constantly looking at diesel fuel savings devices like fuel catalysts and other technologies and practices to keep their costs down. One technology described for the first time in the report is “speed limiters” – devices that monitor average speeds per driver in conjunction with fuel spends.

You can find the ATRI report here.