Trucking's operational costs: What drove 2025's to a new record high

Speaker 1:

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Matt Cole:

Why trucking's operational costs rose in 2025 and how costs are shaping up for 2026?

Jason Cannon:

Hey everybody. Welcome back. I'm Jason Cannon, and my co-host is Matt Cole. The American Transportation Research Institute's annual benchmarking report highlighting fleet's operational costs was released in July, and the results probably aren't much of a surprise to anybody in the industry.

Matt Cole:

According to ATRI's research, the cost to operate a truck in 2025 saw the biggest single year increase since the big jump from 2021 to 2022 with a 7.6 cent per mile jump over 2024. What were the biggest factors driving those increased costs?

Alex Leslie:

ATRI's operational cost of trucking report is the industry's most trusted public benchmarking report. So we've been doing this now for, gosh, since 2008 was the first version of this report, and every year it grows a little bit. So we track all of the key cost centers, trucks, trailers, insurance, driver wages, but we also track a lot of the operational metrics as well in order to help fleets understand how our operations and our costs sort of lining up with each other. So every year motor carriers submit their data. It's open to any motor carrier. We encourage everyone to participate and they submit their data averages each year. And then we usually publish the report in late June or early July. The sort of overall trend was that costs were accelerating. So over the last several years coming out of the pandemic and that high inflation moment, we saw costs gradually decelerating.

So they were still going up each year, but by a smaller percentage each year. So again, that's the trend line you want to see. The costs are still going up, but by a smaller amount each year. In 2025, that trend ended and we actually saw costs begin to accelerate again. So they increased by a larger percentage in 25 than they did in 2024. Again, that tells us that we're seeing a return of inflationary pressure in trucking, which is unfortunate news right now. So that the actual numbers that we saw was that the average operational cost of trucking hit a new record high, $2.33.6, which was an increase of 3.4% over 2024's total. If you take fuel out though, it was a relatively good year for fuel in 2025. We've kind of forgotten that now because of all the stuff with Iran now, but if you take fuel out, actually the costs increased by even more to $1.85, which was a 4.2% increase.

Jason Cannon:

The numbers Alex mentioned, of course, are an industry average across the whole US. Depending on where you're based and primarily operate, your fleet costs might have actually been higher or lower.

Alex Leslie:

This one's not going to surprise anyone. The Northeast continues to be the most expensive region. It has the highest driver wages, the highest repair and maintenance, the highest insurance, tolls, and driver benefits. So none of that's super surprising. The Northeast has a higher cost of living. It also has less open highway, so your mileage works out a little bit differently. So your insurance and your tolls are going to be higher too. After that, the West was the second most expensive region. It had the highest truck trailer and fuel costs, and then the Southeast was sort of next in line. The Midwest was the only region that actually saw some decreases in regional costs, which made it unusual. And it had, I believe, the lowest increase overall of all regions as well.

Matt Cole:

Fleet's biggest overall expenses are driver wages, which see steady increases each year. Those increases though haven't kept up with inflation in recent years.

Alex Leslie:

The key part for driver wages is in fact that while they have continued to increase, they're increasing at sub-inflationary rates right now. And for the second year in a row, so in 24, they went up by 2.4%. In 25, they went up by 2.5%, so almost the same. But in both of those years, inflation went up by almost 3% each year. So on the carrier side of things, that soft labor market means that it's an area where carriers are at least not experiencing quite as much of a cost crunch as some other areas. But on the flip side, that means that for drivers, they're not seeing their wages go up by the same amount as inflation has been. And drivers are not unique in that respect. We're seeing that a lot in this economy. It has been a weak labor market in the last couple of years here.

And what we saw is that wages overall in the US were also, again, going up at a sluggish rate. On the flip side though, driver benefits costs have gone up increasingly. And actually this year it was one of the highest increases at 6.6%. That has really accelerated a lot over the past few years. It was a little under 5% in 2024. And what that really tells us is this is a story of medical care inflation jumping over the past couple years. That's the kind of thing where, again, when you're seeing your paycheck, you don't necessarily see that the benefits costs have gone up a bunch for your employer. But if your employer is maintaining the same quality of care as many fleets are trying to do right now to retain the drivers that they have, that has been a cost crunch for motor carriers absolutely in the last two years here.

Jason Cannon:

One of the more notable increases in 2025 was equipment costs and more specifically repair and maintenance costs.

Alex Leslie:

This has been a really interesting one. So the history here is that for the past several years, truck and trailer costs were going up by over 8%, sometimes much more than 8%, partly because fleets were trying to play catch up. They had to replace those old trucks that they weren't able to replace during the pandemic and prices were high. Now in 2025, of course, we had been in this freight recession for three years. So a lot of fleets were no longer replacing their trucks, certainly not at the same rate as they had been in previous years. So they were replacing fewer trucks, but the price on those trucks was still really high. So for a lot of fleet sizes, smaller fleets, they really started putting off truck purchases, trailer purchases. And for some of them, they actually saw savings year over year because they ended up not making those replacements.

On the other side of the spectrum though, the larger fleets, fleets with 500 trucks or more, most of them were still trying to replace at not the same rate, but a relatively similar rate. And for those fleets, we saw that equipment costs jumped up very significantly by 15% or more even. So for the large fleets, replacing equipment has been a huge squeeze. For the smaller fleets, again, they've been putting off those replacements, which means the flip side that they've had to incur higher repair and maintenance costs. So we saw repair and maintenance costs go up this year by over 8.5%. And again, that's a pretty standard trend that we see. If fleets are saving money by not replacing their trucks, they have to run those trucks longer, which means that those repair and maintenance bills begin to rack up. And I will say it's this year in 2025, this was mostly a decision that worked out because the actual cost of repairs by themselves, the actual cost of parts and of technician labor, according to some good data from Decisive and TMC, those costs per repair were actually a little bit lower than what they had been.

So we actually saw improved prices for repairs, but because fleets were doing so many more repairs, the overall cost was higher. So the per repair cost was advantageous and that made it make sense to do a higher volume of repairs. Again, even though that total cost went up by 8.6%.

Matt Cole:

As Alex mentioned earlier, fuel prices were mostly flat in 2025, yet that's obviously not been the case this year. How big of an impact will fuels rising costs this year affect overall operational costs?

Alex Leslie:

What we saw when the US attacked Iran was a jump in diesel prices that was roughly equivalent to the jump that we saw when Russia invaded Ukraine. So that's the kind of jump we're looking at. And when that happened, the increase was 50% year over year. So that's kind of the historical comparison here. Now, there are a couple factors that can influence that and they haven't yet played out. So we're still seeing activity, we're still seeing a hot situation in the Strait of Hormuz in the Iran airspace that is impacting, continuing to impact those prices. The other factor is that more oil moves through the Gulf than through Russia and Ukraine, at least more of the sort of global supply that we tend to see. So the US Energy Information Agency estimates that this is going to have a longer tail, a longer impact on prices.

Even if we were to see hostilities end tomorrow, it would still take a couple quarters for the oil flows to resume something like normal. And then it would still take a little bit longer for the prices in the market to actually normalize another quarter or two. So we're basically expecting to see elevated prices again through the remainder of this year and not see normalization until something like midway in 2027.

Jason Cannon:

Beyond the obvious cost increases associated with fuel this year, how did other costs look after the first quarter of this year?

Alex Leslie:

So what we do is we collect data from the first quarter of 2026 to try to get a sense of what trends will look like. We collect this data mostly in March, April, May. So what we've seen so far is that driver benefits, we expect those to go up at a pretty similar rate, maybe a little bit lower than last year. It looks like some of that medical inflation is cooling, but we expect to still see that be one of the top concerns for motor carrier costs. Insurance premiums, again, we are seeing those go up at a clip that looks pretty similar. What we saw for 2025 was that insurance went up by about 4%. We expect to see something similar, again, despite the fact that crashes and safety has actually improved. And then it'll be interesting to see how exactly truck trailer versus repair and maintenance play out.

Right now, we saw all of those numbers increasing by about 2.5% or so, but a lot of that is going to depend on what we see in terms of rates over the course of the remainder of this year. We've seen a lot of data that shows that class eight orders have increased significantly over 2026 so far, but orders are not the same thing, of course, as actual delivered trucks or actual payment for trucks. So whether those orders translate into actual sales, I think depends partly on whether we can see this gradual recovery continue to gain steam. If those rates continue to improve or hold, then I would say we're probably going to see repair and maintenance costs begin to come down a little bit, and we're going to see truck and trailer costs go up a little bit. And that's sort of what we see so far in the first quarter of 2026.

Matt Cole:

Knowing all of these numbers is great, but what do they mean for your fleet? Alex explains the best ways for trucking companies to utilize the report.

Alex Leslie:

I mean, the first thing I would say is that cost discipline right now remains paramount for fleets. Yes, we've seen rates improve a bit. Yes, we've got some optimism about finally exiting this freight recession, but margins remain razor thin. We saw this year for truckload and refrigerated that the average profit margin was still below 1%. For flatbeds, it was actually negative 0.5%. So even with rates beginning to inch up a bit, the fact that costs are now accelerating means that fleets need to maintain cost discipline. So benchmarking your costs against your peers is really important to be able to understand that you're not getting out over your skis, that the increases you're seeing are consistent or in line with what you want to see from your peers as a whole. Again, when costs are going up this much, it's not enough to just hope that the increase you're paying is normal.

You need to be able to compare that to actually see that it is consistent and that you're not putting yourself in a position of danger. So that's the biggest reason why I encourage fleets to participate. And again, to get that customized report that we produce to be able to see that you're in line with your closest peers. But another really important thing is to be able to track that, hey, those operational metrics are also in line. As we are trying to maintain good cost discipline, we also want to make sure that we're not sacrificing performance. And so again, we want to be able to see, are my peer fleets, is their turnover similar to mine? Are they seeing similar maybe increase in mileage between breakdowns? Or are they looking at similar fuel economy, dwell time, some of these other factors that, again, if you're trying to position yourself for a turnaround, we want to make sure that those performance metrics aren't being unduly impacted by cost saving strategies.

So those are really the two prongs that I encourage fleets to think about. First, just getting that basic benchmarking, making sure your costs aren't going up by more than they should be, but then also understanding how those costs impact your key performance indicators as well.

Jason Cannon:

That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.