3rd DAT Carrier Benchmark Survey

Transcription

1 DAT SPECIAL REPORT 3rd DAT Carrier Benchmark Survey February 2013

2 DAT SPECIAL REPORT 2 DAT Carrier Benchmark Survey Among the 514 trucking companies who took our online survey, most respondents fell into one of two groups: (1) for-hire carriers with small fleets (an average of 7.8 power units and 16 trailers, in a range from 2 to more than 500) and (2) owner-operators with a single truck that the owner drove under his own authority. A smaller number of respondents identified themselves as private fleets or asset-based brokers. Because those two groups operate under a different business model, their answers are not included in this report. Carriers Costs Rise Faster than Rates Throughout much of 2012, we noted that carriers costs were rising faster than their rates, and that outlook was confirmed. Year-over-year comparisons illustrate a point that has been made by a number of trucking industry analysts in To quote Donald Broughton of Avondale Partners, for example: the per-mile costs of operating a truckload carrier are going up at a pace twice that of the pricing power currently being achieved. In short, carriers costs are rising twice as fast as their revenues. Key Results Slip to 2010 Levels Key performance indicators declined in 2012 for all fleets surveyed, so that results were more similar to those reported in 2010 than in $16K For-hire carriers $14K Owner-operator Due to their low overhead, owner-operators achieved higher gross margins than for-hire carriers, on a per-truck basis. Monthly Profits Exceeded $3,000 Per Truck The small, for-hire fleets and owner-operators yielded gross profits of more than $3,000 per truck per month in 2012, based on revenues and costs reported. More Empty Miles, Shorter Hauls Empty miles increased in 2012, when compared with survey results in the previous year. Both for-hire carriers and owner-operators saw empty miles increase to 2010 levels. (The difference between 2012 empty miles and 2010 levels is not statistically significant.) Avg. % Of Miles Driven Empty Avg. Length Of Haul, One Way Avg. Total Miles Per Truck, Per Month Avg. Rate Per Loaded Mile, Including Fuel Surcharges (US$) Avg. Revenue Per Truck Major KPIs By Year For-Hire Carriers 11.6% 820 9,264 $1.73 For-Hire Carriers 9.9% ,440 $ % 12.5% 754 9,734 8,236 $2.00 $ % 9,321 $ % 8,986 $1.95 $18,429 $17,684 $14,986 $16,168 $12,060 $14, Owner-Operator

3 DAT SPECIAL REPORT 3 Length of haul declined, and the change was greater for the for-hire carriers (-11%) than for the owner-operators (-4.6%). A shorter haul usually correlates with higher rates, but that was not the case in Total miles per truck declined slightly, on average. For-hire carriers with multiple trucks and drivers had more flexibility to re-position assets and log 8.3% more miles than owner-operators. The O-Os typically had one truck and drove it themselves, so the truck was parked whenever the driver took a break for home visits and hours-of-service regulations. Rates per loaded mile appeared to dip for both groups, according to the respondents, but that result was not significantly different from Carriers and owner-operators reported higher rates in both 2012 and 2011 than they did in According to DAT Truckload Rate Index, average contract rates rose 3.8% in 2012, while spot market rates increased 0.9% nationwide. Monthly revenue per truck dropped, compared to the previous year, due to a combination of the decline in total miles and the increase in miles driven empty. Top 3 Profit Drivers: Rates, Fuel Efficiency and Asset Utilization Profitability was largely a factor of the rate per mile for both for-hire carriers and owner-operators. In second place, the most significant factor for the for-hire fleets was fuel efficiency. Owner-operators improved profitability most by getting a higher rate and reducing the percentage of miles driven empty. Rates per loaded mile (bottom) were the biggest factor in profitability for small, for-hire fleets as well as owner-operators. After securing a higher rate, for-hire carriers improved profits most when they boosted fuel efficiency (center.) For owner-operators, reducing empty miles (top) was the second-most important factor in determining profitability. G rouped by % of Miles Driven E mpty Avg. Profit/Los s Avg. R evenue per T ruck Profit Margin O wner-operator 0% -5% $4K $20K 5% 5.1% -10% $4K $16K 9% 11% -20% $14K 7% 21+% $1K $11K 4% G rouped by MP G Avg. Profit/Los s Avg. R evenue per T ruck Profit Margin F or-hire carrier <5.50 ($2K) $16K -11% $5K $16K $17K 27% 15% $7K $17K 41% G rouped by R ate per L oaded Mile Avg. Profit/Los s Avg. R evenue per T ruck Profit Margin F or-hire carrier < $1.75 ($1K) $14K -2% $ $2.00 $17K 7% > $2.00 $8K $20K 13% O wner-operator < $1.75 $1K $12K 3% $ $2.00 > $2.00 $5K $16K $18K 9% 7%

4 DAT SPECIAL REPORT 4 Load Board is the Primary Source of Freight Load Boards Freightbrokers or 3PLs Contracts With Shippers For-Hire Carrier 37.1% 28.2% 31.1% Owner-Operator 45.1% 28.1% 22.8% Load boards were the primary source of freight for both for-hire carriers (37%) and owner-operators (45%) while freight brokers and 3PLs provided 28% of the loads hauled by both groups. Shippers provided 31% of loads to for-hire carriers and only 23% of owner-operators freight came from shipper contracts. Load Boards Improve Utilization for Van Fleets Increased use of DAT Load Boards led to an improvement in asset utilization, especially for fleets that included more than 50% van trailers. The downward slope of the line shows that the proportion between empty miles that were reduced as load board use increased. The relationship between load board use and empty miles was not significant for reefer or flatbed carriers. Empty miles were decreased Asset utilization increased Owner-Operators Achieved Higher Margins Due to their low overhead, owner-operators achieved higher gross margins than for-hire carriers, on a per-truck basis. The owner-operators had an average of 1.2 power units, and gross profit of $3,046 monthly per truck, for a 21% gross margin. For-hire carriers made an average of $3,892 per month for each of their trucks, across an average of 7.8 trucks, per fleet. Their total gross profit was $26,559 per month, representing an 18% margin. For details, see the tables below Key Performance Indicators, by Fleet Type Monthly Revenue Per Truck $16,168 for-hire carrier $14,431 owner-operator Total Rate Per Loaded Mile $2.00 for-hire carrier $1.95 owner-operator Percent of Miles Driven Empty 12.5% for-hire carrier 15.8% owner-operator Total Monthly Miles per Truck 9,734 for-hire carrier 8,986 owner-operator Length of Haul, One-Way (Miles) 754 for-hire carrier 878 owner-operator Fuel Mileage per Gallon (MPG) 6.4 for-hire carrier 6.0 owner-operator Monthly Gross Profit Per Truck $2,903 for-hire carrier $3,046 owner-operator Gross Profit Margin, Before Taxes 18% for-hire carrier 21% owner-operator

5 DAT SPECIAL REPORT 5 Financial Comparisons: For-Hire Carriers and Owner-Operators Revenues, Cost and Profits Revenue & Costs Per Mile For-hire carrier Total rate per loaded mile $2.02 Fuel per mile (based on $3.96 per gallon average) $0.70 Driver pay $0.45 License and registration fees $0.23 Lease or loan payment, for power unit $0.07 Lease or loan payment, for trailer(s) $0.03 Insurance $0.06 Tire replacement and maintenance $0.04 Other maintenance $0.06 Owner-operator $1.96 $0.67 $0.41 $0.24 $0.06 $0.02 $0.07 $0.05 $0.08 Revenue per Truck, per Month Monthly total miles driven per truck Percent (%) of miles driven empty Number (#) of power units in fleet Monthly revenue per truck For-hire carrier 9, % 7.83 $16,521 Owner-operator 8, % 1.32 $14,431 Costs and Gross Profits per Month Non-driver payroll, including benefits (US$) Rent or mortgage for business facilities Cell phone for business use Other monthly expenses Office phone, fax and internet Electricity and water Gross monthly profit per truck (US$) For-hire carrier $13,812 $1,620 $1,054 $750 $510 $376 $3,392 Owner-operator $2,457 $749 $451 $309 $199 $197 $3,046 For-Hire Fleets Made More Money For-hire carriers received a higher average rate per mile, and they achieved better fuel efficiency and asset utilization than the owner-operators. Due to higher operating costs, however, for-hire carriers had lower gross profit margins than owner-operators. The for-hire carriers, with an average of 7.8 power units, had additional costs associated with higher total miles driven per truck, as well as indirect expenses, including offices, other facilities and non-driver payroll. Revenues, profits and direct costs are expressed on a per-truck basis, while indirect costs are totaled and divided by the number of trucks in each fleet.

6 DAT SPECIAL REPORT Goals: Raise Prices, Reduce Costs Improving revenue while cutting costs were the top two goals expressed by carriers, earning above 2.5 on a scale of 0 to 3. The third place option was bring in new business. All three goals were shared by owner-operators and for-hire carriers. Rounding out their top five goals, for-hire carriers emphasized driver retention and adding power units or trailers, while owner-operators planned to add or improve technology in the cab and in the office Priorities - ranked on a scale of 0 to 3 For-Hire Carrier Improve revenue per mile Reduce costs Bring in new business Add or improve office technology Add power units or trailers Improve driver retention Recruit and train new drivers Add or improve in-cab technology Owner-Operator 2013 Priorities Shared by carriers and owner-operators 1. Improve Revenue Per Mile 2. Reduce Costs 3. Bring In New Business 2013 Challenges: Fuel, Rules and Maintenance The cost of fuel was seen as the biggest challenge facing fleets and owner-operators in 2013, followed by regulatory compliance and equipment maintenance. Insurance, financing and credit were among the other top concerns shared by both groups Challenges - ranked on a scale of 0 to 3 For-Hire Carrier Owner-Operator Fuel cost CSA, HOS and other safety regulations Equipment maintenance Insurance CARB and other environmental regulations Financing and credit Driver recruitment and training Driver retention Challenges Cost of fuel biggest concern 1. Fuel Costs 2. Safety Regulations 3. Equipment Maintenance

7 DAT SPECIAL REPORT 7 Survey Respondents: 51% For-Hire, 34% Owner-Operator Most respondents to the annual DAT Carrier Benchmark Survey in the past three years have been owner-operators (blue) or for-hire carriers (orange). Among the owner-operators surveyed this year, 66% own a single truck (shown on the second chart below) and drive it under their own authority. This survey report separates for-hire carriers from owner-operators, for purposes of comparison, and omits answers from private fleets and asset-based brokers. 51.3% For-hire carrier 1% Other 8.4% Carrier-broker 4% Private fleet 34.4% Owner-operator 66% One truck with DOT authority 16% One truck, leased 13% Multiple trucks, with authority 2% Leased on, multiple trucks, drivers are employees of O-O 2% Other business structure 1% Leased on, multiple trucks, drivers are not employees How We Surveyed The Third Annual DAT Carrier Benchmark Survey drew 514 responses from DAT customers, including carriers, owner-operators, private fleets and asset-based brokers. They filled out an online questionnaire, anonymously providing detailed information about their fleet operations. This report is based on responses of the for-hire carriers and owner-operators only. The margin of error is plus or minus 7.4% for the for-hire carriers and 8.2% for owner-operators. Call DAT.com