Trucking costs in the U.S. reached a new high of US$2.270 per mile in 2023 – while this marked a new record high cost, it is a modest 0.8% increase from the previous year. However, when excluding fuel, the annual cost increase was a significant 6.6%, with driver wages, truck payments, and insurance premiums rising sharply.

This is according to the latest Analysis of the Operational Costs of Trucking, an annual report released by the American Transportation Research Institute (ATRI).

The report analyzes line-item costs, operating efficiencies, and revenue benchmarks by fleet sector and size. Data collection involved motor carriers of all sizes, including owner-operators. The data collection spanned from February to May 2024, and fleets represented in this report operated 150,869 combination truck tractors and 395,934 trailers, running over 11.97 billion miles.

Fuel costs saw the most significant decrease in 2023, dropping by 13.7% compared to the previous year, reducing by 8.8 cents per mile.

This reduction was primarily due to lower diesel prices, which fell steadily throughout the first half of 2023 before briefly increasing in the fall. Meanwhile, truck insurance premiums experienced the largest increase, rising by 12.5%, to $0.099 per mile.

Other expenses rose moderately across most categories in 2023.

Driver pay

The trucking industry spent an average of $0.779 on driver wages and $0.188 on driver benefits per mile, amounting to $0.967 in total per-mile compensation. Driver wages across all sectors grew by 7.6% year-over-year.

“TL [truckload] fleets with more than 1,000 trucks paid the highest driver wages, at $0.877 cents per mile. This fleet size group also saw the largest increase in wages compared to 2022,” the report reads.

 At the same time, TL fleets with fewer than 26 trucks saw a slight dip in wages, which indicated that mall fleets in this sector felt the greatest economic pressure from low freight rates. Specialized fleet drivers’ pay increased steadily across fleet sizes, too.

Among the LTL (less than truckload) carriers, average driver pay rose from 78.0 cents in 2022 to 92.0 cents per mile ($36.99 per hour) in 2023, making LTL driver wages the largest contributor to the increase in the industry-wide average driver wage.

While ATRI predicts that driver pay will increase as well in 2024, the rate of increase is expected to be slower than in previous years. This is because the overall labor market has become less competitive, and inflation rates stabilized at around 3.4% in early 2024, which is significantly lower than in previous years.

Truck payments

The average truck and trailer payment costs increased as well, rising by 8.8%, up to $0.360 per mile. This rise followed the trend of high costs from 2022, which saw an 18.6% increase. ATRI says that the high payment costs last year were largely driven by the need to continue making payments on expensive trucks purchased in the previous year when prices were high due to supply chain disruptions and increased demand during the pandemic.

However, other factors influenced the truck payment cost trends in 2023. While the Class 8 market continued its correction from the peak prices seen during the COVID-19 pandemic, many fleets expanded, despite the economic conditions prevalent in the market, therefore increasing the overall demand for trucks and trailers.

In 2024, truck and trailer payment costs are expected to experience some downward pressure. However, the payments are still projected to remain relatively high, as carriers already report a 3.8% increase in truck and trailer payment costs per mile in the first two months of 2024 compared to the previous year.

Such costs of equipment is one the trends that drive insurance premiums’ costs up this year, too.

Insurance costs

After three years of stability, hovering between $0.086 and $0.088 per mile, marginal insurance costs increased by 12.5% in 2023 to $0.099 per mile. This figure includes auto liability and cargo insurance coverage but not physical damage coverage, according to the report.

Most TL carriers saw per-mile increases in insurance premiums with little cost differentiation among fleet sizes, except for new entrant fleets of 5 to 25 trucks. Specialized fleets of all sizes, saw little change between 2022 and 2023.

ATRI says that despite the reduction in large truck crashes by 1.6% in 2022 and a 7.3% drop in 2023, these improvements were insufficient to counterbalance the upward cost pressures like rising cost of equipment, increased litigation and inflation pressures, as well as ‘surge in net premiums written during the freight boom of 2021 and 2022.’

The insurance premiums are expected to continue their upward trajectory in 2024, since early 2024 data from the Council of Insurance Agents & Brokers showed a 9.8% increase in commercial auto rates, which exceeds recent averages.