DAT SPECIAL REPORT 3rd DAT Carrier Benchmark Survey Q1 2013
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 2012. 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 2011. 19% For-hire carriers 21% Owner-operator Due to their low overhead, owner-operators achieved higher gross margins than for-hire carriers, on a per-truck basis, before taxes and depreciation. Monthly Profits Exceeded $3,000 Per Truck The small, for-hire fleets and owner-operators yielded gross profits of more than $3,000 per truck per month in 2012. More Empty Miles, Shorter Hauls Empty miles increased in 2012, when compared with survey results in the previous year. Both for-hire carriers and owner-operators saw empty miles increase to 2010 levels. Avg. % Of Miles Driven Empty Avg. Length Of Haul, One Way Avg. Total Miles Per Truck, Per Month Avg. Rate Per Loaded Mile, Including Fuel Surcharges (US$) Major KPIs By Year For-Hire Carriers Average Revenue per Truck 11.6% 820 9,264 $1.73 For-Hire Carriers 9.9% 852 10,440 $2.05 14.9% 12.5% 754 9,734 866 8,236 $2.00 $1.75 10.2% 920 9,321 $2.10 15.8% 878 8,986 $1.95 Avg. Revenue Per Truck $18,429 $17,684 $14,986 $16,168 $12,060 $14,431 2010 2011 2012 2010 2011 2012
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 2012. Total miles per truck declined slightly, on average. For-hire carriers with multiple trucks and drivers had more flexibility to re-position assets, so they logged 8.3% more miles than owner-operators. The owner-operators typically had one truck and drove it themselves, so the truck was parked whenever the driver took a break for home visits or hours-of-service regulations. Rates per loaded mile appeared to dip for both groups, but that result was not significantly different from 2011. For-hire carriers and owner-operators reported higher rates in both 2012 and 2011 than they did in 2010. According to DAT RateView TM, average contract rates rose 2.9% in 2012, while spot market rates declined 1.1% nationwide, not including the fuel surcharge. 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 Higher Rates Yield Best Return driven empty. Avg. Profit/Loss Avg. R evenue per Truck 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 secondmost important factor in determining profitability. F or-hire carrier < $1.75 ($1K) $14K $1.75 - $2.00 $17K > $2.00 $8K $20K O wner-operator < $1.75 $1.75 - $2.00 > $2.00 $1K $5K $12K $18K Improving F y Boosts Fleet Revenue Avg. Profit/Loss Avg. R evenue per Truck F or-hire carrier <5.50 5.50-5.99 6.00-6.49 ($2K) $5K $17K 6.50+ $7K $17K Reducing Empty Miles Drives O-O P Avg. Profit/Loss Avg. R evenue per Truck O wner-operator 0% -5% $4K $20K 5.1% -10% $4K 11% -20% 21+% $1K $11K $14K
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% 45.1% 28.1% 22.8% All the survey respondents used load boards, which were the primary source of freight for both for-hire carriers (37%) and owner-operators (45%). Freight brokers and 3PLs provided 28% of the loads to both groups directly. Shippers provided 31% of loads to for-hire carriers while 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 relationship between load board use and empty miles was not significant for reefer or flatbed carriers. s Achieved Higher Margins Due to their low overhead, owner-operators achieved 21% gross margins while for-hire carriers margins were lower at 19%, 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 a 19% margin, before taxes and depreciation. 2012 Key Performance Indicators, by Fleet Type Monthly Revenue Per Truck $16,527 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 $3,154 for-hire carrier $3,046 owner-operator Gross Profit Margin, Before Taxes 19% for-hire carrier 21% owner-operator
DAT SPECIAL REPORT 5 Financial Comparisons: For-Hire Carriers and s Monthly Costs, Revenues and Profits Per Truck* Direct Costs For-hire carrier Owner-operator Fuel $6,783 $6,048 Driver pay $1,959 $1,165 License/Reg fees $1,376 $1,531 Lease (power unit) $539 $456 Truck Maintenance $338 $433 Truck Tire Costs $263 $286 Lease (trailer) $186 $131 Overhead Costs For-hire carrier Owner-operator Non-driver payroll and benefits $1,277 $285 Rent or mortgage payment $131 $175 Insurance per truck $255 $452 Cell phone $122 $275 Office phone, fax and internet $47 $60 Utilities, including electricity and water $27 $37 Other overhead $70 $52 Key Performance Indicators For-hire carrier Owner-operator Revenue per Truck $16,527 $14,431 Pre-Tax Profit $3,154 $3,046 Pre-Tax Profit Margin 19% 21% * For each survey respondent, direct costs per mile were multiplied by total miles driven, overhead was divided by total miles and number of trucks, and revenues were multiplied by loaded miles. The results were averaged for each of the fleet types. 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.
DAT SPECIAL REPORT 6 2013 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, where 0 meant not important and 3 meant very important. 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. 2013 Priorities - rated on a scale of 0 to 3 For-Hire Carrier Improve revenue per mile 2.8 2.7 Reduce costs 2.5 2.4 Bring in new business 2.2 2.1 Add or improve office technology 1.8 1.7 Add power units or trailers 2.0 1.5 Improve driver retention 2.1 1.3 Recruit and train new drivers 1.8 1.3 Add or improve in-cab technology 1.6 1.7 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. 2013 Challenges - rated on a scale of 0 to 3 For-Hire Carrier Fuel cost 2.7 2.8 CSA, HOS and other safety regulations 2.3 2.3 Equipment maintenance 2.3 2.2 Insurance 2.2 2.1 CARB and other environmental regulations 2.0 1.9 Financing and credit 2.1 1.8 Driver recruitment and training 1.9 1.3 Driver retention 1.9 1.3 2013 Challenges Cost of fuel is biggest concern 1. Fuel Costs 2. Safety Regulations 3. Equipment Maintenance
DAT SPECIAL REPORT 7 Survey Respondents: 51% For-Hire, 34% 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 6.1% for the for-hire carriers and 7.7% for owner-operators. Call 1.800.547.5417 DAT.com