Note: Today’s post is part of our “Editor’s Pick” series where we highlight posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. This July 2023 post from Uber Freight’s blog compares current trucking spot rates to carrier operating costs and what the current environment means for shippers and carriers.
Carriers’ operating costs show they’re not
The cost to operate a truck surged by 21% in 2022, according to the American Transportation Research Institute (ATRI). In a report published in June, ATRI concluded that costs rose above $2.00/mi for the first time, and by a significant margin. The increases were mostly driven by fuel, driver wages, and rising equipment costs. In the truckload sector, the operating cost was $2.15/mi.
This raises an important question: are current spot rates sustainable?
While the cost per mile (CPM) is calculated based on all the miles driven by a carrier, carriers are usually compensated for loaded miles only. Empty miles, also known as deadhead, add to the costs of trucking. Therefore, if we want to compare costs to freight rates, we need to calculate the cost per revenue mile (CPRM).
According to the ATRI survey…