At All Costs: Canadian trucking getting expensive

TORONTO — In a recent briefing note to carriers, the Canadian Trucking Alliance highlighted a handful of stats and factoids that show where operating costs are these days. The verdict? From manpower to maintenance, running a fleet is getting expensive.

LABOUR: The number one operating cost for trucking companies (somewhere between 40- to 75 percent of most fleets’ total costs, depending on the type of operation), driver wages are reportedly going up.

Disgruntled truck stop chatter notwithstanding, the CTA says that while it’s difficult to determine average wages, carriers are reporting increases of around 2 percent, and much higher in "certain situations where carriers may be trying to get driver wages back to where they were prior to the recession."

However, the consensus is that with supply shrinking, the upward pressure on labor costs — wages, benefits and recruiting — will intensify, particularly as CSA leads to an "increased stratification of wages in the form of premiums for quality drivers."

AT the same time, the industry is also experiencing increased costs for licensed mechanics due to the chronic shortage of skilled labor.

DIESEL: If you’re overwhelmed with the price of filling up your trucks, know this: It won’t get better.
The second biggest cost for motor carriers and independent operators, diesel at both the retail and the wholesale level has gone up by nearly 40 percent from last year.

Looking ahead, even more cash-strapped North American jurisdictions are expected to raise diesel fuel taxes; and in Canada, a federal biodiesel mandate which is supposed to kick-in July 1st, will likely exacerbate things further. As CTA points out, primary feedstock for biodiesel is at record levels. And with insufficient production capacity, about 85 percent of the government-fueled demand will be met through imports.

EQUIPMENT & PARTS: As anyone who’s been kicking tires on a dealer lot this past year knows, the purchase price of a 2010-EPA certified truck is about 10- to 15 percent more.

Used trucks as well are up at least that much, reflecting tight availability of low-mileage and late model units.

Carriers are reporting trailer price hikes of up by more than 15 percent over last year, while the cost of tires has skyrocketed by s much as 20 percent in many cases, (over 7% in the last month alone, CTA points out) as a result of a worldwide shortage of natural rubber and increased oil prices.

Installation of environmental packages such as aerodynamic fairings, APUs, and trailer skirts on new equipment or as retrofits in preparation for the new North American fuel economy/GHG regulations is also adding to equipment costs.

MAINTENANCE: With an aging fleet and deferred vehicle replacement comes increased maintenance intervals. Also reflecting increased regulatory oversight of the mechanical compliance under programs like CSA, the cost of keeping trucks fit has risen as much as 15 percent since last year.


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