Introducing The National Trucking Cost Index

Flying blind makes no sense, particularly if the flight path ahead has a ton of turbulence. But that's the reality for many US trucking companies today. Without current and relevant benchmarking data, they are often making important buying and investment decisions using gut-level intuition alone.

We wanted to change that. Which is why we developed the National Trucking Cost Index (NTCI), a valuable measuring rod for the industry's financial performance. The timing is right, coming off a long and tough freight recession. Cost control has never been more important.

We spent several months building the base NTCI. It's a composite of public fleet financial data, public trucking vendor data, economic data, and our own industry knowledge.

Unlike most other benchmarking datasets which are published and stay static, ours is a living and breathing organism which is constantly being updated and refined as new information becomes available. Our goal is to get as close to live benchmarking as we can and reach optimal relevancy and value for everyone, no matter the fleet size or application.

Main Components

The NTCI encompasses all of the main trackable cost components in trucking operations, including:

• Labor: Driver wages and benefits lead the way here. But we also look at total labor costs and revenue-to-labor cost ratios to understand a fleet's labor efficiency. This will become increasingly important as fleets look to introduce AI-driven workflows into operations and improve back-office productivity.
• Fuel: With fuel as the second largest cost center for most fleets, efforts to improve fuel efficiency have always been valuable. We can help prioritize these efforts by quantifying the value of specific fuel efficiency improvement strategies for different operational situations.
• Equipment Cost: Truck and trailer costs have risen sharply in recent years due to inflation and emissions-related costs. We help fleets decide on trade cycles based on the cost-benefit ratio of buying newer equipment.
• Insurance: The increase in "nuclear" accident verdicts has driven up insurance costs for all fleets. We track the impact of this on all fleet types and guide decisions on risk management and investments in safety programs.
• Repairs and Maintenance: By tracking maintenance costs, we can help fleets decide whether to maintain vehicles in-house rather than through third-party repair facilities or full-service leasing contracts. Technician labor costs are a key sub-component of this.
• Permits and Licenses: Permit costs will vary by state and load types. We allocate an appropriate percentage of revenue based on the fleet type and where its trucks run mostly.
• Interest: We track the main rates and the premiums applied based on a fleet's financial condition. Fleets need to understand their current true cost of capital before deciding to take on more debt.
• Income Taxes: Often overlooked when profits are scarce, income taxes can take a big bite out of a fleet's coffers when business is good. We track effective tax rates over time and the impact that certain investment decisions will have on lowering State and Federal tax payments.

The main NTCI is updated monthly and includes 12-month forward projections on cost increases or decreases. The NTCI is available to all TruckAnswers members for free. Sign up below for a free membership to receive email notifications of updates.

Application-Specific

In addition to the main National Trucking Cost Index, we are launching a series of application-specific versions of the NTCI to allow more relevant benchmarking within industry sectors, starting with the following:

• Truckload NTCI: Focused on the truckload sector, with different weightings for national and regional carriers as well as carrier size: Small (under 100 trucks); Medium (100-1,000 trucks); and Large (over 1,000 trucks).

• LTL NTCI: Focused on the less-than-truckload sector, with different weightings for national and regional carriers as well as carrier size: Small (under 500 trucks) and Large (over 500 trucks).
• Vocational NTCI: Focused on the vocational sector, with different weightings for sub-sectors including Agriculture, Beverage, Construction, Heavy Haul, and Package/Final Mile. This will continue to expand based on user demand.

Application-specific versions of NTCI are available to all premium TruckAnswers members. Fleet owners and active employees of fleets receive a discount. Sign up below to access this exclusive content and stay on top of important cost trends to inform purchasing and investment decisions.

Fleet-Specific

For the most accurate benchmarking and decision support, we recommend fleets use our fleet-specific private benchmarking service. Included in this white-glove service:

• Customized Index: We do a deep dive into a fleet's unique operational situation and apply appropriate weightings to the NTCI. This gives the fleet an index which is unique to them and a highly trusted tool for measuring operational and financial performance.
• Customized Decision Support: We make cost management recommendations which are tailored to the fleet's short-term and long-term financial goals.
• ROI Analyses: Using a fleet's custom index, we can do highly relevant ROI analyses on new products and services a fleet is considering. We also reduce the time it takes to trial new products and services by using more trusted data to run the trial. Getting agreement on the value of the new product or service sooner is beneficial to both the fleet buyer and the fleet vendor.

Private benchmarking is priced based on fleet size and service level. To learn more, contact us at private@truckanswers.com.

To learn more about the components of the NTCI and how it could be implemented into your organization's benchmarking, drop us a note at ntci@truckanswers.com.