ATRI report: Rising costs continue to squeeze trucking industry

Rising costs collided with depressed freight rates, according to ATRI’s latest operational costs of trucking benchmarking report. According to the data, the industry’s average cost of operating a truck declined slightly by 0.4% to $2.260 per mile. That’s good news but the freight devil lies in the details. When removing lower fuel costs, marginal costs increased 3.6% to $1.779, the highest costs ever recorded by ATRI for non-fuel operating costs.

The report showed truckload carriers were hit hardest in operating margin (OR), operating at an average OR of -2.3% in 2024 compared to 3% in 2023 and 8% OR in 2022. Other modes saw operating margins continue to deteriorate, most sectors struggled with margins below 2%. Only the LTL sector maintained positive profitability at 11.6% OR. Reefer carriers fell from 6% OR in 2022, to 2% in 2023 before settling at barely above breakeven at 0.1%. Flatbed / Oversized saw a similar trend, OR fell from 7% in 2022 to 5% in 2023, then 0.4% for 2024.

“The trucking industry is facing the most challenging freight market in years, with loads down and costs increasing,” said Groendyke Transport, Inc. President and CEO Greg Hodgen in a press release.

Several cost categories saw increases, with truck and trailer payments rising 8.3% to a record-high $0.390 per mile, and driver benefits costs increasing 4.8% to $0.197 per mile. Driver wages, traditionally the largest contributor to cost increases following the pandemic, rose more modestly at 2.4%, slightly below the inflation rate.

The report saw numerous other operational adjustments made by carriers to weather the freight recession. Truck capacity dropped 2.2% as companies sold vehicles, empty miles increased to an average of 16.7%, and the drivers-per-truck ratio fell to 0.93 as carriers parked equipment. Many fleets also reduced non-driver staff by 6.8% as a cost-management strategy.

Despite these challenges, there were some positive trends. Average truck age, dwell time per stop, and mileage between breakdowns all improved. Regarding dwell, the report notes, “Overall average dwell time decreased slightly in 2024, by 2 minutes, to 1 hour and 38 minutes per stop – just 22 minutes below the industry-standard threshold for excessive driver detention. The source of this improvement, however, was limited exclusively to the truckload sector.”

June For-Hire Trucking Index shows volume weakness amid capacity contraction

ACT Research recently released its June For-Hire Trucking Index, which showed continued deterioration in freight volumes alongside decreasing capacity. The diffusion index is based on a survey of carriers. A reading above 50 shows growth, while anything below 50 is degradation. The Volume Index saw its third consecutive month of softening, falling to 42.5 points (seasonally adjusted) in May, from 43.4 points in April.

“The myriad impacts of tariffs and opaqueness regarding future trade decisions have destroyed business planning and slowed economic activity,” according to ACT Research. “While we may see some improvement in trade volumes ahead of the August 9th China trade decision, the pull-forward of freight into Q1 has necessitated a payback later this year.”

In spite of sustained driver availability, fleets continue to struggle with profitability. The Driver Availability Index tightened 3.1 points in May to 50.9 points, the 37th consecutive month at or above 50. The report adds, “Struggling owner-operators turning in their operating authorities have also provided a steady supply of experienced drivers for fleets. But after three years of weak rates/profitability, investments in driver training are under pressure. Roadcheck may have contributed to the still positive, but lower level of driver availability in May too.”

The Capacity Index decreased to 46.4 in May from 47.1 in April, as carriers reduced their fleet tractor counts. Fleet purchase intentions remained significantly below historical norms, with only 27% of respondents planning to buy new equipment in the next three months, compared to the 54% long-term average. ACT describes fleet reluctance as “generationally weak profits, economic uncertainty, and regulatory uncertainty.”

The Pricing Index showed some improvement, rising 8.4 points to 47.8 in May from 39.4 in April, though this was largely attributed to the temporary tightening effect of the annual Roadcheck inspection event rather than fundamental market improvements.

Private versus for-hire fleet dynamics remain a factor to watch. The report adds, “The supply-side should contract as private fleets decelerate fleet growth and for-hire fleets remain on the sidelines. Rising equipment costs due to tariffs further that case, but the flip side to tariffs is slower freight market growth, which will prolong the recovery in the for-hire sector.”