Ruck operating benchmarks - Trucking Magazine

[Pages:7]truck operating benchmarks

Compiled by Max Braun

Exclusive

Market related owning & operating estimates for a variety of popular trucking operations

W elcome to the FleetWatch truck operating benchmarks for 2015. The schedule covers a variety of typical primary and secondary distribution trucking operations published since February 2004.

The objective is to provide operators and shippers (consignors) with a reliable independent guide to trucking costs incurred in the transportation of raw materials, semi-finished and finished products.

A thorough understanding of the assumptions and how they are applied in developing the benchmarks is necessary if the various benchmarks are to be informative, beneficial and helpful. While FleetWatch takes no responsibility for the accuracy of the estimates, considerable time and effort has been expended to ensure the various components are realistic and representative of the hypothetical transport tasks contained in the schedule. Updated estimates are published quarterly. However, the schedule is continuously monitored and updated monthly.

ASSUMPTIONS

Many transport tasks are similar few are ever identical. The benchmarks are based on average operating conditions in terms of demography, roads, annual kilometres, working days, vehicle capability, scheduled maintenance in accordance with manufacturers' recommendations and competent drivers. Where actual operating conditions differ from these assumptions make the necessary adjustments to the

benchmarks so that they remain realistic and market related.

VEHICLE TYPE

Briefly describes the vehicle configuration contemplated for a specific task (eg ? 4x2 rigid freight carrier with volume van body for medium distance secondary distribution of FMCG products). The descriptions attached to articulated vehicles indicate the number of axles (1.1.3 means a 4x2 truck-tractor and tridem semi-trailer. 1.2.2 a 6x4 truck-tractor and tandem semi-trailer).

PAYLOAD (TONS)

The assumptions are based on typical optimal legal mass payload that can be achieved on any number of vehicles, bodies and trailers freely available on the local market. In practice the actual payload will depend on the vehicle manufacturers' specification and the road-ready unladen mass. Lightweight trailing equipment can improve payloads.

DECK LENGTH (METRES)

The assumptions are based on typical optimum mass distribution for the assumed vehicle configuration and the contemplated task. In practice there are many wheelbase and axle capacity options to suit specific requirements.

PALLETS

The assumption contemplates 1000x1200 mm 4-way entry pallets.

VOLUME

Cubic assumptions are based on length, width and height of typical bodies applicable to the various operations. In practice this varies with measurements of specific bodies.

ANNUAL KILOMETRES

Annual kilometres are based on typical operations. Annual kilometres of vehicles engaged in short and medium distance

secondary distribution vary considerably. Space limitations prohibit the inclusion of a wider variety of transport operations.

WORKING DAYS

A five-day week is assumed for the vehicles most likely to be involved in secondary distribution. Larger rigs often work longer hours to meet the demands of primary distribution.

SHIFTS

Shifts indicate the average daily working hours of fridge units

USEFUL LIFE

Where applicable, the useful life is based on a maximum of 800 000 km. This is in line with vehicle manufacturers' maintenance contracts for standard operations over 48- or 60-month periods. In terms of depreciating assets, the introduction of international reporting standards (IRS) requires that all entities identify the useful life of vehicles when they are commissioned. The benchmarks assume the useful life to be the number of years required to cover the estimated cumulative kilometres for each task with a maximum of 800 000 km (where applicable). A 5-axle articulated rig (1.2.2.) covering100 000 kmpa has an assumed useful life of eight years is an example. See comments under depreciation for more detail. The useful life of the major components is an important element in achieving costeffective transport when planning fleet size for medium- and long-term contracts.

CAPITAL COST

All estimates are based on an estimate of the cost of new vehicles and trailing equipment. The indicated initial cost of vehicles, trailers, bodies and auxiliary equipment (such as fridge units) is based on the average of published current selling prices of such items less known fleet discounts. 62

2015 / VOL 34 FLEETWATCH

59

FLEETWATCH MARKET RELATED TRUCK OPERATING BENCHMARKS (Per Annum)

OPERATION

Short

Med

Haul

Haul

Metro

ASSUMPTIONS Vehicle Type

Average Payload (tons) Deck Length ( metres) Pallets Cubes Annual KM Working Days Shift Hours (fridge) Useful Life (KM) Useful Life (Years) CAPITAL COST Prime Mover Body Auxiliary Equipment 1st Trailer 2nd Trailer Other Total Capital Cost STANDING COST Prime Mover Depreciation Body Depreciation Auxiliary Depreciation Trailer Depreciation Total Depreciation Cost of Capital Prime Mover Licence Trailer Licence Total Licence Fee Total Insurance Driver Wages Assistant Wages Total Wages TOTAL STANDING COST As a % of Total Cost VARIABLE COST Prime Mover Fuel Auxiliary Fuel Total Fuel Top-up Oil Prime Mover Repair & Maint Auxiliary Repair & Maint Trailer Repair & Maintenance Total Repair & Maintenance Total Tyres Unforeseen Expense TOTAL VARIABLE As a % of Total Cost TOTAL OPERATING COSTS SUMMARY Standing Cost Rands per/day Standing Cost (Rands/Km) Variable Cost (Rands/Km) Total CPK (Rands/Km) Cost per ton (Rands) Cost per Pallet (Rands) Cost per Ton/Km (100% Load) Cost per Ton/Km (75% Load) Cost per Ton/Km (50% Load) Cost per Pallet/Km (100%) Cost per Cube/Km (100%) Cost per Deck Metre (Rands) RATIOS Useful Life Cost Capital Cost per Payload Ton Capital Cost per Deck Metre Capital Cost % Useful Life Cost Oper Cost per Payload Ton Oper Cost per Deck Metre Capital Cost % Operating Cost Maint Cost % Variable Costs MaintCost % Operating Cost Fuel Cost % Variable Cost Fuel Cost % Operating Cost CO2 (tons pa)

Panel Van Van

3 4

16 50000 260

300000 6

373118

373118

74624

74624 22648 1361

1361 26118 101585 75375 176960 301711 56.45%

159554

159554 7978 37500

37500 7686 20000 232718 43.55% 534429

1160 6.03 4.65 10.69 685

R 3.56 R 4.75 R 7.13

R 0.67

3206577 124373 93279 11.64% 178143 133607 69.82% 16.11% 7.02% 68.56% 29.86% 40.76

Insulated Van

3.5 4.2 4 20 30000 260 11 350000 8

395829 137500 269640

802969

79166 27500 50558

157223 48740 2112

2112 56208 109967 75375 185342 449626 60.99%

125189 67811 192999 9650 25800 24000

49800 5128 30000 287578 39.01% 737203

1729 14.99 9.59 24.57 810 709 R 7.02 R 9.36 R 14.04 R 6.14 R 1.23 675

5897627 229420 191183 13.62% 210630 175525 108.92% 17.32% 6.76% 67.11% 26.18% 49.31

60

Long Haul

Insulated Van

5.5 6.5 6 37 60000 260 11 350000 6

621863 145200 315000

1082063

124373 21780 59063

205215 65681 4327

4327 75744 122155 75375 197530 548498 53.51%

260393 48841 309233 15462 51600 48000

99600 22200 30000 476495 46.49% 1024992

2110 9.14 7.94 17.08 717 657 R 3.11 R 4.14 R 6.21 R 2.85 R 0.46 607

6149955 196739 166471 17.59% 186362 157691 105.57% 20.90% 9.72% 64.90% 30.17% 83.85

Stop/Start Fresh Del Fresh Del Cargo Van Cargo Van Flat Deck Flat Deck

5 November 2015

Med

Long

Long

Haul

Volume Van

8 7.5 8 37 45000 260

450000 8

621863 110000

Flat Deck 8 7.5 8

85000 260

600000 8

621863 99000

731863

124373 16500

140873 44424 4327

4327 51230 113638 75375 189014 429868 61.54%

152574

152574 7629 41850

41850 16650 50000 268702 38.46% 698570

1653 9.55 5.97 15.52 336 336 R 1.94 R 2.59 R 3.88 R 1.94 R 0.42 358

5588562 91483 97582 13.10% 87321 93143 104.77% 15.57% 5.99% 56.78% 21.84% 38.98

720863

124373 14850

139223 43756 4327

4327 50460 122155 75375 197530 435296 48.29%

288195

288195 14410 79050

79050 34408 50000 466063 51.71% 901359

1674 5.12 5.48 10.60 433 433 R 1.33 R 1.77 R 2.65 R 1.33

462

7210874 90108 96115 10.00% 112670 120181 79.98% 16.96% 8.77% 61.84% 31.97% 73.63

Truck Med haul

6x4 Rigid

14 7.5 8

65000 260

800000 8

1172655 137500

1310155

234531 20625

255156 79526 14419

91711 168755 75375 244130 670523 56.45%

293846

293846 14692 71500

71500 37258 100000 517296 43.55% 1187820

2579 10.32 7.96 18.27 326 571 R 1.31 R 1.74 R 2.61 R 2.28

609

9502558 93583 174687 13.79% 84844 158376 110.30% 13.82% 6.02% 56.80% 24.74% 75.08

Truck & Trailer Long haul

6x4 Rigid & Trailer 26 15 24

100000 260

800000 8

1172655 137500

31900

1342055

234531

21450 255981 81463 14419 4327 18746 93944 168755 75375 244130 694264 45.60%

493168

493168 24658 110000

35000 145000 65532 100000 828359 54.40% 1522623

2670 6.94 8.28 15.23 225 244 R 0.59 R 0.78 R 1.17 R 0.63

390

12180981 51618 89470 11.02% 58562 101508 88.14% 17.50% 9.52% 59.54% 32.39% 126.00

FLEETWATCH VOL 34 / 2015

1.1.2. artic 1.2 Rigid

1.2.2. artic 1.1.3. artic 1.2.3. artic 1.2.3. artic 7-angle rig 7-angle rig

12.5 m dual axle semi

4-axle Artic 21 12.5 20

120000 260

600000 5

1070685

286000

1356685

214137

214137 82351 9480 4944 14424 94968 188195 75375 263570 669450 42.86%

554027

554027 27701 132000

42000 174000 36768 100000 892497 57.14% 1561946

2575 5.58 7.44 13.02 286 300 R 0.62 R 0.83 R 1.24 R 0.65

481

7809732 64604 108535 17.37% 74378 124956 86.86% 19.50% 11.14% 62.08% 35.47% 141.55

8.4 m Ins Med haul

6x2 Rigid 13.5 8.4 16

135000 260

800000 6

1359600 302500 315000

1977100

271920 45375 59063 21450 397808 120010 11532

11532 138397 187339 75375 262715 930461 47.68%

610296

610296 30515 121500 108000

229500 50616 100000 1020926 52.32% 1951388

3579 6.89 7.56 14.45 556 469 R 1.07 R 1.43 R 2.14 R 0.90

893

11708326 146452 235369 16.89% 144547 232308 101.32% 22.48% 11.76% 59.78% 31.27% 173.25

13.5 m dual axle semi

5-axle Artic 26 13.5 24

160000 260

800000 5

1379170

286000

1665170

275834

23925 299759 101076 11532 5700 17232 116562 222695 75375 298070 832699 38.74%

867976

867976 43399 176000

56000 232000 73461 100000 1316836 61.26% 2149535

3203 5.20 8.23 13.43 318 344 R 0.52 R 0.69 R 1.03 R 0.56

612

10747675 64045 123346 15.49% 82674 159225 77.47% 17.62% 10.79% 65.91% 40.38% 221.76

2015 / VOL 34 FLEETWATCH

13.5m tridem axle semi

5-axle Artic 25 13.5 24

160000 260

800000 5

1449210

319000

1768210

289842

39600 329442 107330 13264 5700 18964 123775 253883 75375 329258 908769 43.05%

789069

789069 39453 144000

56000 200000 73461 100000 1201984 56.95% 2110753

3495 5.68 7.51 13.19 325 338 R 0.53 R 0.70 R 1.06 R 0.55

601

10553764 70728 130979 16.75% 84430 156352 83.77% 16.64% 9.48% 65.65% 37.38% 201.60

14.7 m tridem reefer semi

6-axle Artic 28 14.5 28 90 160000 286 10 800000 5

1431700

472500 528000

2432200

286340

88594 40425 415359 147635 14914 16404 31318 170254 276108 75375 351484 1116049 41.65%

867976 81373 949349 47467 208000 96000 80000 384000 82443 100000 1563259 58.35% 2679308

3902 6.98 9.77 16.75 335 335 R 0.60 R 0.80 R 1.20 R 0.60 R 0.19 646

13396538 86864 167738 18.16% 95690 184780 90.78% 24.56% 14.33% 60.73% 35.43% 242.55

14,7 tridem reefer semi

6-axle Artic 30 14.7 30 92 180000 286 10 800000 5

1485260

472500 539000

2496760

297052

88594 16500 402146 151553 14914 16404 31318 174773 276108 75375 351484 1111274 38.79%

976473 81373 1057846 52892 234000 108000 108000 450000 92748 100000 1753486 61.21% 2864760

3886 6.17 9.74 15.92 334 334 R 0.53 R 0.71 R 1.06 R 0.53

681

14323798 83225 169848 17.43% 95492 194882 87.15% 25.66% 15.71% 60.33% 36.93% 270.27

tautliner inter links

7-axle Artic 34 18 36

180000 286

800000 5

1616842.5

220000 396000

2232843

323369

46200 369569 135534 14914 12432 27346 156299 276108 75375 351484 1040230 37.27%

1148792

1148792 57440 234000

108000 342000 102852 100000 1751083 62.73% 2791314

3637 5.78 9.73 15.51 287 271 R 0.46 R 0.61 R 0.91 R 0.43

542

13956569 65672 124047 16.00% 82097 155073 79.99% 19.53% 12.25% 65.60% 41.16% 293.51

flat deck inter links

7-axle Artic 36 18 36

200000 286

800000 4

1616842.5

209000 374000

2199843

323369

43725 367094 133530 14914 11364 26278 153989 276108 75375 351484 1032374 35.59%

1239966

1239966 61998 252000

100000 352000 114280 100000 1868244 64.41% 2900618

3610 5.16 9.34 14.50 282 282 R 0.40 R 0.54 R 0.81 R 0.40

563

11602473 61107 122213 18.96% 80573 161145 75.84% 18.84% 12.14% 66.37% 42.75% 316.80

OPERATION

ASSUMPTIONS Vehicle Type

Average Payload (tons) Deck Length ( metres) Pallets Cubes Annual KM Working Days Shift Hours (fridge) Useful Life (KM) Economic Life (Years) CAPITAL COST Prime Mover Body auxiliary Equipment 1st Trailer 2nd Trailer Other Total Capital Cost STANDING COST Prime Mover Depreciation Body Depreciation Auxiliary Depreciation Trailer Depreciation Total Depreciation Cost of Capital Prime Mover Licence Trailer Licence Total Licence Fee Total Insurance Driver Wages Assistant Wages Total Wages TOTAL STANDING As a % of Total cost VARIABLE COST Prime Mover Fuel Auxiliary Fuel Total Fuel Top-up Oil Prime Mover Repair & Maint Auxiliary Repair & Maint Trailer Repair & Maintenance Total Repair & Maint Total Tyres Unforeseen Expense TOTAL VARIABLE As a % of Total cost TOTAL OPERATING COSTS SUMMARY Standing Cost p/day Standing Cost (Rands) Variable Cost (Rands) Total CPK (Rands) Cost per ton (Rands) Cost per Pallet (Rands) Cost per Ton/Km (100% Load) Cost per Ton/Km (75% Load) Cost per Ton/Km (50% Load) Cost per Pallet/Km (100%) Cost per Cube/Km (100%) Cost per Deck Metre (Rands) RATIOS Useful Life Cost Capital Cost per Payload Ton Capital Cost per Deck Metre Capital Cost % Eco Life Cost Oper Cost per Payload Ton Oper Cost per Deck Metre Capital Cost % Operating Cost Maint Cost % Variable Cost Maintenance Cost % Operating Cost Fuel Cost % Variable Cost Fuel Cost % Operating Cost CO2 (tons pa)

61

truck operating benchmarks

Comment by Max Braun

THE NINE CENTS a litre decline in the wholesale price of diesel provides miniscule relief to the embattled business of trucking. Fuel as a percentage of operating costs (excluding overhead expenses and toll fees) is almost 43% for large rigs covering around 700 kilometres a working day. The ongoing increase in fix costs such as equipment prices, maintenance and tyres sets standing costs per day at around R3610 a day. Useful life cost of a seven-axle interlink based on four years service with 800000 kilometres on the clock is now just short of R12 million.

The outlook for the remainder of the year remains much the same with a reasonable possibility for a further weakening in the oil price. The next round of equipment price reviews is likely to be towards the end of the first quarter in 2016. Making sure each vehicle in the fleet is working to optimum potential is a proven method of containing operating costs.

STANDING COST/FIXED COSTS

Standing costs are incurred whether the vehicle moves or just stands. When vehicles do not cover significant kiolometres or work for long hours, standing costs will be high and difficult to recover. The assumptions are:

DEPRECIATION

Depreciation is based on the assumption that all vehicles are new and financed via an instalment sale, financial or operating lease. In line with current banking practice there is no residual value. Vehicle buyers with an outstanding credit rating and operating track record receive more generous terms. Conversely, those with a poor record will meet with tougher conditions. The net amount to depreciate is based on: ? Vehicles ? 20% a year over five years. ? Auxiliaries ? 25% a year straight line. ? Trailers ? 10% a year straight line.

Tyre values are not deducted from the initial price of vehicles and trailers prior to depreciation. It is important to remember that in terms of the IRS the useful life of vehicles and equipment must be assessed at least annually and revised to accommodate any significant changes that may have occurred to lengthen or shorten the useful life or diminish the ultimate residual value. For those interested read accounting codes AC123 and AC128.

VEHICLE LICENCES

Licence fees for vehicles and trailers are based on the current Gauteng tariff.

INSURANCE

Insurance cost assumes the operator has a low risk rating. Premiums are set at 7.0 per cent of the purchase price (replacement value) for vehicles, equipment and trailers.

WAGES

Driver and assistant wages vary considerably across the country in terms of vehicle size, primary and secondary distribution tasks, region, different operators and the structure of remuneration packages. All assumptions include an allowance for company contributions but exclude overtime and bonuses. Where applicable an assistant has been included as a casual, daily worker

VARIABLE COSTS

Variable costs (also known as running costs) are incurred when the wheels turn. These include:

FUEL

A major cost item in all transport operations. Where annual kilometres exceed about 120000 km a year, fuel is usually the largest expense. Fuel consumption is calculated according

COST OF CAPITAL

"There's no free lunch" as the saying goes. Interest on the cost of vehicles and equipment is calculated at the prime bank overdraft rate (currently 9.0% a year) on the capital cost less an RV of 25%. The calculation indicates the average interest paid per annum on the reducing balance over five years.

to a formula that assumes the vehicle is always fully loaded, travels at an average speed of approximately 80% of the speed limit in the case of highway operations and 75% of the urban speed limit. The formula takes into account an assumed maximum power demand of between 55% and 60% when expressed as a percentage of maximum available kW/hrs for

62

FLEETWATCH VOL 34 / 2015

truck operating benchmarks

ROAD TRANSPORT COST COMPARISON

Based on a 7-axle Interlink covering 200000 kmpa, working 286 days a year

As at Dec

2010

2011

2012

2013

2014

2015**

2015***

2015****

% change

Average pa

Equipment Cost

1678900 1772424 1838599 1940900 2099750 2099750 2199843 2199843 31.03% 5.75%

Interest (prime)

9%

9%

8.5% 8.5% 9.25% 9.25% 9.25% 9.25% 2.78% 0.51%

Fixed Costs

713112 827560 860613 889745 969359 969359 1023875 1024851 43.72% 8.10%

Running Costs

1401735 1712260 1889340 2031687 1911642 1663362 1727442 1905402 35.93% 6.65%

TOTAL COSTS*

2114847 2599800 2749953 2921433 2881001 2632721 2942729 2930253 38.56% 7.14%

Fuel Cost

869086 1199600 1301657 1434251 1294846 1058389 1290286 1024851 17.92% 3.32%

Fuel cpl

7.605 10.487 11.390 12.550 11.330 9.261 11.228 11.178 46.98% 8.70%

Fuel % of Total Costs 41.09% 46.14% 47.33% 49.09% 44.94% 40.20% 43.85% 43.60% 6.10% 1.13%

Standing Cost /day

2493 2894 3009 3111 3389 3389 3580 3583 43.72% 8.10%

RPK

10.57

13

13.75 14.61 14.41 13.16 14.71 14.65 38.60% 7.15%

C/Tkm 100% Lfactor

29

36

38

41

40

37

39

41 41.38% 7.66%

C/Tkm 50% Lfactor

58

72

76

82

80

74

77

82 41.38% 7.66%

*Total costs exclude overhead and administration expenses and toll fees where applicable

** Feb 2015

Source: MBCS

*** April 2015

**** May 2015

each task. A similar approach is used in calculating the fuel used by fridge units. The price of fuel is based on the pump price in Gauteng for 500 ppm diesel. Bulk rebates are ignored.

TOP-UP OIL

Is based on five per cent of the fuel cost.

REPAIRS & MAINTENANCE

The assumed cost of maintenance is based on current vehicle manufacturer and FML maintenance contract rates, expected economic

component life and industry experience. The assumptions take into account the complexity of each task including typical operating conditions such as roads, topography, traffic density etc. Repair and maintenance costs for fridge operations are calculated in hours.

TYRES

Tyre life is based on typical casing life currently experienced in the various operations. Major tyre supplier tyre management programmes offer excellent data 64

2015 / VOL 34 FLEETWATCH

63

63 to establish achievable tyre performance.

UNFORESEEN

An amount of R20 000 up to R100 000 a year for different vehicle configurations is allowed to cover number of unexpected and unforeseen expenses.

EXCLUSIONS

The estimates do not include toll fees, vehicle tracking, engine protection or other optional equipment. No allowance is made for administration or overhead expenses. The variation in operator approach to such costs excludes the inclusion of a sensible amount to cover these aspects as a typical benchmark.

SUMMARY

The summary expresses operating benchmarks under numerous headings including tons, ton/km, pallets, pallet/ km and metres of deck length. It is important to note that the calculations assume a fully loaded vehicle. A 75% and 50% load factor shows the difference in the average cost per ton/km.

RATIOS

Management ratios provide an excellent insight into the high capital and operating cost of vehicles, especially when not properly managed. However, correctly selected vehicles that are decently driven and timeously maintained, offer cost-effective transport to shippers and the prospect of a commercially acceptable return for the operator. A predicted carbon footprint based on 2.772 kg per litre of fuel burnt is included.

NOTE

The FleetWatch truck operating benchmarks offer shippers and operators the opportunity to fine tune these estimates to suit their specific transport operations or needs. Where particular elements differ from your operations, simply make the necessary adjustments.

If, however, you require more information to complete your benchmarks, contact Max Braun at maxbraun@ for some assistance.

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