Rate of Parts and Labor Costs Decrease in 2nd Quarter 2022
Rate of Parts and Labor Costs Decrease in 2nd Quarter 2022
Benchmarking Report from TMC and Decisiv Details Higher Parts and Labor Expenses
September 27, 2002 — Clevleand, Ohio — Today, American Trucking Associations’ Technology & Maintenance Council and Decisiv Inc., reported that parts and labor costs continued to rise in the second quarter of 2022, but at a slower pace.
“While it is far from indicative of a significant change, the good news is that there has been a slight decline in the rate of increase in both parts and labor costs,” said TMC Executive Director Robert Braswell.
The quarterly Decisiv/TMC North American Service Event Benchmark Report was released during TMC’s 2022 Fall Meeting & National Technician Skills Competitions.
Year-over-year from the second quarter of 2021, to this year, combined parts and labor costs rose 15.3% - with parts costs jumping 15.8% and labor expenses increasing 14.6%. This compares to the increases between the previous two quarters, which were slightly higher. Parts were up 16.02 % and labor rose 16.22%, indicating a trend in the right direction.
Considering the impact of inflation across all economic sectors, higher prices for commodities driven by pandemic related supply chain issues, and the effect on the workforce that has amplified an already long standing technician shortage, significant increases are not unexpected. However, the improvement in parts and labor costs show that commercial vehicle service operations are continually implementing programs and practices that are successfully holding the line against increases driven by external factors.
Of the nine VMRS codes tracked by Decisiv for the report, the rate of increase was most heavily impacted by Steering at 12% and Cranking at 9.1%. The rate of increase for all other categories grew by less than 4%.
While it is not possible to predict continued stabilization in costs, the reduction in the rate of increase over the last two quarters is certainly welcome news. Looking forward, an expected improvement in the parts backlog should further mitigate parts cost increases.
Additionally, higher production levels for new trucks will help fleets replace aging units that naturally require more repairs. According to ACT Research, Class 8 orders rose in August supported by carrier profitability. FTR also reports that North American Class 8 net orders for August jumped 98% over the previous month. Those indices show renewed confidence among carriers that truck production will resume.
Demand for carrying capacity also remains high, driving mileage up and putting added pressure on service operations charged with meeting fleet parts and labor needs. As indicated by the ATA For-Hire Truck Tonnage Index, through the first seven months of 2022 tonnage is up 3.4% compared with year-ago levels. The July number marks the 11th consecutive month of annual gains.
“For fleets that are actively managing operations on the Decisiv SRM platform, we are also seeing an improvement in Days Out-of-Service,” said Decisiv President and CEO Dick Hyatt. “Our analysis shows a reduction from 4.53 days in Q1 to 4.35 days in Q2 this, roughly a 4% drop in DOS on average across the more than 13,000 service events managed daily on the platform. That is clear documentation that effective service management practices have a direct bearing on fleet revenues and costs.”
The Decisiv/TMC North American Service Event Benchmark reports are generated using data from the Decisiv SRM platform on service and repair events for more than 7 million commercial assets operating across the U.S. and Canada. The industry’s largest asset service management system is being used to manage a weekly average of 70,000 service events at nearly 5,000 locations.
ATA’s Technology & Maintenance Council issues the reports to its fleet members. The reports are organized based on the Council’s Vehicle Maintenance Reporting Standards sorted by VMRS-coded vehicle systems and geographic location.
TMC fleet members will receive the report electronically via email. For more information on joining TMC, call (703) 838-1763 or visit http://tmc.trucking.org.
By providing leadership support and opportunities to collaborate, TMC helps members develop the industry’s best practices that address the critical truck technology and maintenance issues that have the greatest impact on truck fleets. For more than 60 years, TMC’s member-driven Recommended Maintenance and Engineering Practices have been setting the standards that help trucking companies specify and maintain their fleets more effectively. Follow TMC on Twitter, LinkedIn and Facebook.
TMC is America's premier technical society for truck equipment technology and maintenance professionals. TMC features a diverse membership of equipment managers, service-dealers, owner-operators, industry suppliers and manufacturers, educators, academia and others that support the trucking industry. TMC member fleets represent the broad range of industry vocations, including truckload, less-than-truckload, municipal, private, on/off-highway, construction and other operations. Find out more about TMC online at http://tmc.trucking.org.
American Trucking Associations is the largest national trade association for the trucking industry. Through a federation of 50 affiliated state trucking associations and industry-related conferences and councils, ATA is the voice of the industry America depends on most to move our nation’s freight. Follow ATA on Twitter or on Facebook. Trucking Moves America Forward.
About Decisiv, Inc.
Virginia-based Decisiv is the provider of the largest asset service management ecosystem for the commercial vehicle industry. The Decisiv Service Relationship Management (SRM) platform is the foundation for the nearly 5,000 service locations across North America that manage more than 4 million service and repair events for commercial vehicles annually. Through Decisiv’s SRM platform, dealers, service providers, manufacturers, and fleet and asset managers can communicate and collaborate during every service event. The SRM solution streamlines the entire asset service management process bringing all the necessary diagnostic, telematics and asset information together for all participants, and delivers it at the point of service. This level of connectivity and collaboration drives an unrivaled level of service performance and asset optimization that gets trucks back on the road faster so fleets see higher revenue per asset and lower costs. Service providers using SRM establish efficient communication, better controls, and increased productivity in service operations that enables them to become trusted partners to fleets. For manufacturers, SRM enhances the value of service networks and provides data and analytics to help develop more reliable and efficient commercial assets. For more information, visit www.decisiv.com.