Carrier budgeting has room to improve, survey shows

by Jeff Della Rosa ([email protected]) 769 views 

According to a recent survey, trucking companies are less confident in their 2023 expense budgets amid a challenging freight market. But with some improvements, they can efficiently organize budgets, increase performance and strengthen confidence.

Bestpass, in partnership with FreightWaves, recently released a report on the survey of 100 U.S. fleets. The participants, of which 68.9% comprised carriers with 100 trucks or less, were asked about their 2022 expenses and projections, performance satisfaction and 2023 budgeting confidence.

Respondents’ budgeting confidence for 2023 was lower than it was for 2022, according to the report. Nearly 48% of respondents were somewhat confident in their 2023 budgets, while about 30% of respondents were not very confident. By comparison, 62.1% of respondents were somewhat confident in their 2022 budgets, and 17.5% were not very confident.

Respondents said driver pay was their top expense priority for 2023. It was closely followed by fuel costs. Other expense priorities included equipment, maintenance and insurance costs.

According to the report, carriers often overlook some over-the-road expenses, leading annual costs to exceed annual budgets. To increase efficiency, carriers have switched to newer forms of fleet management, including the newest technology or partnerships. However, some still use spreadsheets and paper documents.

More than 64% of respondents said their expenses last year exceed their 2022 budgets, with 27.2% saying expenses were 10% to 20% higher than budgeted. Still, about one-quarter of respondents met their annual expense budget, and 12% said their expenses were lower than budgeted.

“Inflation has had a grip on the logistics space in the last year,” the report shows. “As prices and costs increased, so did budgets, making these results anything but shocking.”

In 2023, global inflation is projected to fall to 6.6% from 8.8% in 2022, according to the International Monetary Fund. It’s projected to fall to 4.3% in 2024, still exceeding approximately 3.5% from 2017 to 2019.

According to the Bestpass survey, respondents said fuel costs exceeded budgets by more than any other expense in 2022. Maintenance, equipment, driver pay and insurance costs rounded out the top five expenses exceeding budgets.

Fuel also was a top expense for fleets in 2021. According to the American Transportation Research Institute, fuel costs rose by 35.4% in 2021 from 2020.

According to Bestpass, 59.2% of respondents use spreadsheets to forecast and budget for operating expenses. Other forecasting and budgeting tools include fleet management software (44.7%) and third-party benchmarking (23.3%).

“Shockingly, nearly 11% said that they do not forecast or budget for operating expenses at all,” the report shows. “This number was higher than predicted.”

According to the report, 79.6% of respondents track fuel efficiency to determine overall fleet performance. Other performance metrics fleets track include vehicle use (65.1%), driver behavior (63.1%), maintenance schedules (63.1%) and route efficiency (44.7%).

Respondents were indifferent about how their fleets performed in 2022, with the majority saying they were neutral about the satisfaction level of their fleet’s performance last year. Driver behavior received the highest score among the five categories from which respondents selected. Vehicle reliability was the lowest-scoring category.

Comparing fleet sizes, small and large fleets were more satisfied than mid-sized fleets, which had lower averages across all categories. Fuel efficiency was mid-range in terms of satisfaction across all fleets.

The report also highlighted how much time and money fleets spend on tolling. Carriers most commonly spend less than one hour on toll-related activities each week, and 44.7% of respondents said their toll expenses are manageable.