Fleet Operating Costs Per Mile

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Part
01

Fleet Operating Costs Per Mile

The specific breakdown of the given operational cost elements for each of the indicated vehicle types are highly limited. We then performed some extrapolations to determine the estimated cost breakdown per mile for each of the vehicle classes based on available data. The results of the calculations were inputted in the shared spreadsheet. Meanwhile, some of the best practices to reduce fleet costs include having a fleet renewal plan in place, integrating a fleet management platform into the process, and complying with government regulations.

Standard Pickup Truck or Utility Van

  • Fuel costs per mile: $0.18
  • Average purchase price of a full-size pick-up truck: $51,036
  • Pickup trucks' mileage typically reach 200,000 miles.
  • Given this, the average purchase cost per mile was calculated as follows: $51,036/200,000 = $0.26
  • If driven for 15,000 or less than 24,000 miles, the estimated repair cost for pick-up or light trucks is $0.03.
  • The Honda Ridgeline is considered as one of the most popular mid-sized truck.
  • The average annual insurance premium of the Honda Ridgeline is $191 or ($191 X 12)$2,292 per year.
  • Using the 15,000 mileage per year basis used in the initial hour of research, the insurance cost per mile was calculated as follows: $2,292/15,000 = $0.15
  • For the driver's wages and benefits per mile, the same cost per mile for class 1 vehicles can be applied since class 2 vehicles such as standard pickup trucks can still fall under the light truck drivers' BLS classification. This was based on the assumptions made from the initial research for calculation consistency due to the lack of available data.

Minibuses

Fuel Costs per Mile

  • As minibuses are also classified as passenger vans, the available data on vans was used to approximate the fuel cost per mile.
  • The average annual vehicle miles traveled by vans is around 11,543 miles.
  • For vans, the average annual fuel use is around 660 gasoline gallon equivalents.
  • Based on a snapshot of the current fuel cost of $2.175 per gallon, the average annual gasoline cost was calculated as follows: $2.175 X 660 = $1,435.5.
  • Given these figures, the average fuel cost per mile for vans was calculated as follows:$1,435.5/11,543 miles = $0.12 per mile

Purchase Cost per Mile

  • A 2019 new Ford Transit 150 costs around $69,995.
  • Based on available data, the average useful life of vans can reach a maximum of 12 years.
  • As stated above, vans' cumulative travel mileage is around 11,543 miles per year.
  • Based on this, the estimated total miles traveled by vans in general was calculated as follows: 12 years X 11,543 miles = 138,516 miles
  • Based on the figures above, the average purchase cost per mile for this model was calculated as follows: $69,995/138,516 miles = $0.51 per mile.
  • Repair or Maintenance Cost
  • If driven for 15,000 or less than 24,000 miles, the estimated maintenance/repair cost for full-sized vans is $0.03.

Insurance Cost per Mile

  • https://www.commercialtrucktrader.com/listing/2019-FORD-TRANSIT+150-5012925164
  • https://www.finder.com/car-insurance/ford-transit-connect-insurance-rates?ref=sidebar-makemodel
  • For Ford Transit models, the average insurance cost is around $172 per month ($2,064 per year).
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, vans' cumulative travel mileage is around 11,543 miles per year.
  • The estimated insurance cost per mile for vans was calculated as follows: $2,064/11,543 miles = $0.18.

Driver Wages per Mile

  • https://www.bls.gov/oes/2019/may/oes533033.htm
  • The average annual wage of van drivers is $38,520 per year.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, vans' cumulative travel mileage is around 11,543 miles per year.
  • Given this, the driver wages per mile was calculated as follows: $38,520/11,543 miles = $3.34 per mile.

Driver Benefits per Mile

  • https://www.salary.com/tools/salary-calculator/equipment-delivery-truck-driver-benefits
  • School bus drivers typically get the following benefits per year:
  • Social Security $3,298
  • 401K/403B $2,026
  • Disability $345
  • Healthcare $6,056
  • Pension $2,371
  • Time Off $5,306
  • Total $19,402
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, vans' cumulative travel mileage is around 11,543 miles per year.
  • Based on these, the driver benefits per mile for van drivers was calculated as follows: $19,402/11,543 miles = $1.68 per mile.

Step Vans

  • Due to lack of specific data on step vans, the per mile fuel costs, repair/maintenance cost, driver wages, and driver benefits were also calculated using the data for vans in general. The estimated figures for step vans were the same with the minibus' calculated numbers above.
  • The purchase cost and insurance cost per mile were calculated separately below using a van model with 14,001 – 16,000 gross vehicle weight.
  • For the step van models such as the Ford Starcraft model, there was no specific insurance cost found. Given this, an assumption was made that this model also follows closely the insurance cost for the Ford minibus model mentioned above.

Purchase Cost per Mile

  • https://www.commercialtrucktrader.com/listing/2020-FORD-STARCRAFT-5005346845
  • The 2020 Ford Starcraft is one of the newest brand in this segment.
  • This vehicle has a gross weight of 14001 to 16000.
  • The total purchase price for this model is $91,500.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, vans' cumulative travel mileage is around 11,543 miles per year.
  • https://www.usf.edu/administrative-services/documents/asbc-resources-field-equipment-replacement.pdf
  • Based on available data, the average useful life of vans can reach a maximum of 12 years.
  • Based on this, the estimated total miles traveled by school buses was calculated as follows: 12 years X 11,543 miles = 138,516 miles
  • Based on the figures above, the average purchase cost per mile for this vehicle model was calculated as follows: $91,500/138,516 miles = $0.66 per mile.

Bucket Truck and Refuse Trucks

  • https://truckingresearch.org/wp-content/uploads/2019/11/ATRI-Operational-Costs-of-Trucking-2019-1.pdf
  • An Analysis of the Operational
  • Costs of Trucking: 2019 Update
  • Based on a survey that includes all types of trucks including those that are below 20,000 lbs. and those that are above 33,000 lbs., the following are the average costs per mile for each of the operational cost elements:
  • Fuel costs: $0.43
  • Purchase payments: $0.27
  • Repair and maintenance: $0.17
  • Truck insurance premiums: $0.08
  • Driver wages: $0.596
  • Driver benefits: $0.18

School Bus

  • https://afdc.energy.gov/data/widgets/10309
  • School buses' cumulative travel mileage is around 12,000 miles per year.
  • https://afdc.energy.gov/data/10308
  • For school buses, the average annual fuel use is around 1,937 gasoline gallon equivalents.
  • https://gasprices.aaa.com/
  • Based on an average fuel cost of $2.175 per gallon, the average annual gasoline cost was calculated as follows: $2.175 X 1,937 = $4,212.98.
  • Given these figures, the average fuel cost per mile for a school bus was calculated as follows: $4,212.98/12,000 miles = $0.35 per mile

Purchase Cost per Mile

  • https://stnonline.com/special-reports/new-school-transportation-studies-compare-costs-advantages-and-wages/
  • School buses costs around $100,000.
  • https://ngtnews.com/fuel-fact-check-do-propane-school-buses-actually-have-a-shorter-lifespan-2
  • The average life span of school buses on the road is around 9 years.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, school buses' cumulative travel mileage is around 12,000 miles per year.
  • Based on this, the estimated total miles traveled by school buses was calculated as follows: 9 years X 12,000 miles = 108,000 miles
  • Based on the figures above, the average purchase cost per mile was calculated as follows: $100,000/108,000 miles = $0.93

Repair or Maintenance Cost

  • https://www.aasa.org/SchoolAdministratorArticle.aspx?id=7584#:~:text=The%20standard%20industry%20maintenance%20cost,including%20fuel)%20is%2025%20cents.
  • The estimated average maintenance cost per mile for school buses is $0.25.

Insurance Cost per Mile

  • https://www.businsurancehq.com/bus-insurance-cost/
  • The average school bus insurance cost is around $9,420 per year.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, school buses' cumulative travel mileage is around 12,000 miles per year.
  • The estimated insurance cost per mile for a school bus was calculated as follows: $9,420/12,000 miles = $0.79.

Driver Wages per Mile

  • https://www.bls.gov/ooh/transportation-and-material-moving/bus-drivers.htm#:~:text=more%20than%20%2449%2C430.-,The%20median%20annual%20wage%20for%20bus%20drivers%2C%20transit%20and%20intercity,percent%20earned%20more%20than%20%2469%2C070.&text=School%20bus%20drivers%20work%20only%20when%20school%20is%20in%20session.,-Some%20make%20multiple
  • The average annual wage of school bus drivers is $34,450 per year.
  • https://afdc.energy.gov/data/widgets/10309
  • School buses' cumulative travel mileage is around 12,000 miles per year.
  • Given this, the driver wages per mile was calculated as follows: $34,450/12,000 miles = $2.87

Driver Benefits per Mile

  • https://www.salary.com/tools/salary-calculator/school-bus-driver-benefits
  • School bus drivers typically get the following benefits per year:
  • Social Security $2,654
  • 401K/403B $1,700
  • Disability $555
  • Healthcare $6,371
  • Pension $1,457
  • Time Off $4,404
  • Total: $17,141
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, school buses' cumulative travel mileage is around 12,000 miles per year.
  • Based on these, the driver benefits per mile for school bus drivers was calculated as follows: $17,141/12,000 miles = $1.43 per mile.

City Transit Bus

Fuel Cost per Mile

  • https://afdc.energy.gov/data/widgets/10309
  • Based on available data, transit buses' cumulative travel mileage is around 43,647 miles per year.
  • https://afdc.energy.gov/data/10308
  • The average annual fuel use of transit buses is around 13,329 gasoline gallon equivalents.
  • https://gasprices.aaa.com/
  • Based on an average fuel cost of $2.175 per gallon, the average annual gasoline cost was calculated as follows: $2.175 X 13,329 = $28,990.58.
  • Given these figures, the average fuel cost per mile for a bus was calculated as follows: $28,990.58/43,647 miles = $0.66 per mile

Purchase Cost per Mile

  • https://www.codot.gov/programs/commuterchoices/documents/trandir_transit.pdf
  • Intercity buses costs around $350,000.
  • https://www.codot.gov/programs/commuterchoices/documents/trandir_transit.pdf
  • The average life span of buses on the road is around 12 years.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, transit buses' cumulative travel mileage is around 43,647 miles per year.
  • Based on this, the estimated total miles traveled by transit buses was calculated as follows: 12 years X 43,647 miles = 523,764 miles.
  • Based on the figures above, the average purchase cost per mile was calculated as follows: $350,000/523,764 miles = $0.67

Repair or Maintenance Cost per Mile

  • https://www.sierraclub.org/sites/www.sierraclub.org/files/sce/new-jersey-chapter/Handouts/VW_Zero_Emission_Bus_Factsheet.pdf
  • Based on the latest available data, the average maintenance cost for regular buses is around $0.85 per mile.

Insurance Cost per Mile

  • https://www.businsurancehq.com/bus-insurance-cost/
  • The average bus insurance cost is around $9,420 per year.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, transit buses' cumulative travel mileage is around 43,647 miles per year.
  • The estimated insurance cost per mile for a bus was calculated as follows: $9,420/43,647 miles = $0.22.

Driver Wages per Mile

  • https://www.bls.gov/ooh/transportation-and-material-moving/bus-drivers.htm#:~:text=more%20than%20%2449%2C430.-,The%20median%20annual%20wage%20for%20bus%20drivers%2C%20transit%20and%20intercity,percent%20earned%20more%20than%20%2469%2C070.
  • The average annual wage of bus drivers is $42,080 per year.
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, transit buses' cumulative travel mileage is around 43,647 miles per year.
  • Given this, the driver wages per mile was calculated as follows: $42,080/43,647 miles = $0.96 per mile.
Driver Benefits per Mile
  • https://www.salary.com/tools/salary-calculator/school-bus-driver-benefits
  • School bus drivers typically get the following benefits per year:
  • Social Security: $3,060
  • 401K/403B: $1,680
  • Disability: $800
  • Healthcare: $8,352
  • Pension: $2,160
  • Time Off: $4,923
  • Total: $20,975
  • https://afdc.energy.gov/data/widgets/10309
  • https://afdc.energy.gov/data/widgets/10309
  • As stated above, transit buses' cumulative travel mileage is around 43,647 miles per year.
  • Based on these, the driver benefits per mile for city bus drivers was calculated as follows: $20,975 /43,647 miles = $0.48 per mile.

Best Practices to Reduce Fleet Cost

Fleet Renewal and Right Sizing

  • According to Mercury Associates, a fleet management consulting firm, taking out aging vehicles from a fleet and bringing in new ones regularly can bring down overall costs. This is to avoid incurring costs when using aging fleet units. Some of the costs that can be avoided include those that are associated with "downtime, maintenance and repairs, fuel, and safety risk management."
  • Establishing an effective strategy to renew the fleet is time-consuming. However, an effective strategy can enable the company to gain savings in the long run.
  • The vehicle replacement plan entails taking detailed stock of the fleet stock, setting up parameters on when to replace fleet units, and assessing incidental costs.
  • Along with regular fleet renewal, the fleet consulting firm also recommended optimizing the size of the fleet to remove those units that are not fully used or those that are over specialized.
  • These units may not be that critical for the fleet to operate. Furthermore, removing these underutilized units can enable more cost savings for the fleet company.
  • The right-sizing system include categorizing fleet units, estimating the average yearly usage by class, evaluating where special units are used, determining if a vehicle is crucial, requesting feedback from users, and disposing of non-crucial units.
  • According to the Department of Enterprise Services (DES) Fleet Operations division, regular fleet renewal can also help in ensuring the safety of the fleet.
  • The fleet renewal cycles should also be established through careful life-cycle evaluation that assesses the optimal replacement time. The analysis can take into account "depreciation, maintenance, fuel consumption, vehicle-preparation costs, overhead, and resale value."

Adopting a Fleet Management Platform

  • Having a fleet management information system can ensure a more effective way of managing fleets and reducing costs.
  • Capturing correct data in real time can be done within the platform.
  • Data and documents can also be uploaded into the cloud as this process is easier, effective, and more cost-effective.
  • The system can then systematically monitor, evaluate, and report insights that can help fleet managers to come up with better and timely decisions.
  • The system can perform inventory management, maintenance scheduling, vehicle optimization, reporting for compliance, vehicle usage tracking, and fleet renewal management systems.
  • Fleet management platforms typically include parts management tools that can enable the success of preventive maintenance processes.
  • Integrating a "barcode-based inventory system" with the platform can also help in monitoring the movement of parts and trigerring reorders.
  • The platform can then ensure the success of preventive maintenance processes to prevent costly unexpected breakdown. The routine maintenance expenses are significantly lower that those associated with unexpected breakdowns. Customers can then gain from a more "cost-effective, reliable and safer operation."
  • An effective preventive maintenance process can also enable a fleet manager to discern if it will be more cost-effective to purchase a new vehicle instead of repairing an old one.
  • As an example, the Omnitracs fleet management company has adopted the technology being provided by Peloton. With this technology, Omnitracs can now use the technology to automatically "fill pre-orders for its Class 8 truck platooning system."
  • Omnitracs can also use the technology to track the location of their fleet units to ensure a more reliable and cost-efficient transportation process.

Staying Updated with Regulations and Industry Standards

  • According to DES, fleets are mandated to ensure their compliance with various "federal, state, and local laws and policies."
  • Some of these regulations involve purchasing green vehicles, complying with emission limits, fuel usage, vehicle usage, driver assessment, licensing, and submitting reports to government regulatory bodies.
  • These regulations regularly change.
  • Fleet managers should be able to readily comply with these regulations to prevent any problems that might impact their operations.
  • By being knowledgeable on these policies, fleet management firms can establish cost-effective solutions that can make them more compliant.
  • They can also identify solutions that can bring down their expenses without negatively impacting their operations.

Research Strategy

Continuing from the insights and recommendations provided in the early research done for this project, we searched further in various fleet management industry publications, government transportation and logistics reports, media publications, and other similar sources to determine the operating costs per mile broken down by fleet class or vehicle weight as indicated in the shared spreadsheet. However, as reflected also in the early findings, we still were not able to find specific figures on most of the operational cost elements indicated. We then used existing data to triangulate and calculate figures that closely approximate the operating cost elements for each of the vehicle class. We have substituted some available data that can closely represent the vehicle types such as using data for vans in general to represent step vans and minibuses based on weight and other factors. We have also analyzed actual vehicle units that closely represent some of the indicated vehicle classes and parameters as shown in the calculations and assumptions mentioned above.
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