The increasing fuel costs and rise in the wages and benefits of drivers have resulted in a drastic increase in the operating costs of trucking companies in 2018. This news is confirmed by the report by American Transportation Research Institute (ATRI).
The overall economic environment in 2018 was positive and robust for carrier companies and drivers trucking in Guelph, Ontario, Canada and America. However, the economic boom also has resulted in an increase in the costs of each and every line-item required by the carriers.
ATRI reports that due to a raising economy, it has become hard for trucking companies to find and retain professional truck drivers, which resulted in increased wages and benefits. The increased fuel prices and insurance costs have also contributed to the upward rise in operating costs on a year-on-year basis.
As per ATRI report, the average operating costs increased $71.78 per hour across the board. The average marginal cost per mile increased to $1.82 per mile, which marks an increase of 7.7% over last year. The average marginal cost per mile is calculated by adding the cost of fuel, equipment, tires, permits, insurance, tolls, driver wages and other benefits, and maintenance.
If we observe individual elements included in the calculation of average marginal cost per mile, fuel costs rose by 17.7%, insurance costs by 12%, driver wages by 7%, and driver benefits by 4.7%. Every component except the cost of tires saw a marked increase in the cost during 2018.
According to the report, driver wages and benefits constituted a lion’s share of the operational costs in 2018. The combined cost of driver wages and benefits contributed 43% to the marginal operational costs. The hourly wages of drivers rose from $21.97 to $23.50 and benefits increased to $7.10 from $6.78.
The ATRI also reported sector wise increase in the operating costs of trucking companies. As per the report, specialized carriers saw maximum increase in the operating cost due to specific requirements such as OS/OW permits, high maintenance charges and specialist driver requirements. On the other hand, truckload carriers experience the least impact of rising costs.
There is a marked increase in the operational costs of companies trucking in Guelph, Cambridge, Canada and America. The increase is attributed to rising fuel prices, increase in driver compensation and an economic boom which increases the cost of each item in the trucking industry.