American Trucking Associations reports find that maintenance technician labor costs rose, while parts costs stabilized

Significant fleet maintenance costs seemed to stabilize in 2023, according to two recent market reports. While parts costs were relatively stable throughout the year, technician labor costs continued to increase significantly.

The American Trucking Associations’ Technology & Maintenance Council released two reports on maintenance costs fleets faced in 2023: the VMRS System Service Data Quarterly Report with Decisiv, and the annual State of Heavy-Duty Repair Report with Fullbay.

Maintenance material costs stabilized. The counter sales of heavy-duty shops increased significantly year over year, but parts costs decreased slightly. Both reports found that labor costs increased in 2023.

“We have to reconcile what we saw with hyperinflation,” Fullbay COO Chris O’Brien told FleetOwner. “Unless there’s some sort of major disruption to the supply chain, I would predict that it will continue to stabilize.”

Decisiv: Parts costs dropped year over year, while labor rose

Combined parts and labor expenses fell 1.4% during the fourth quarter of 2023 but were still up compared to Q4 2022, according to a report from TMC and Decisiv.

As reported in the latest Decisiv/TMC North American Service Event Benchmark Report, expenses from 25 key vehicle maintenance reporting standards systems had dropped in Q4, reversing a 2.1% increase from Q3.

“We are still facing an industry-wide challenge to find technicians, which is increasing labor costs for fleets and service providers,” Dick Hyatt, Decisiv president and CEO, said. “However, quarter and annual parts cost decreases, driven by a reduction in pricing pressures and the influx of more new trucks, is bringing some welcome relief.”

The Decisiv/TMC report found that, year over year, combined parts and labor costs were still 0.2% higher than in Q4 2022. Parts prices dropped 2.2%, while labor costs rose 4.0%.

“It has been a moderating year,” Robert Ziemba, senior director of marketing for Decisiv, told FleetOwner. “The first quarter, we were up less than a percent; second quarter, we were down just over a percent; third quarter, we were up almost 2%; but then this last quarter, we were down 1.4%.”

According to Decisiv combined parts and labor costs went up 8% across all of 2022. By comparison, across 2023, cost changes totaled near zero.

Compared regionally, the drops in parts and labor costs were most noticeable in Canada.

Overall, Q4’s parts and labor costs trended down, thanks to supply chain improvements and new trucks entering the market. According to John Hitch in FleetMaintenance, maintenance costs for tires, steering, and cooling systems dropped roughly 12%. Meanwhile, costs for power takeoff, cab and sheet metal, and wheels, rims, hubs, and bearings increased about 15%.

“If you look at year-over-year parts costs, they’re down over 2%,” Ziemba said. “That’s mostly due to supply chain issues being resolved. We also saw a decline in the freight tonnage, which results in less miles being driven so there’s not as much maintenance required. The freight tonnage index that the ATA does said that it dropped about 1.7%. That gives you an indication that trucks aren’t being driven as much, so the parts demand is not as high.”

The rise in labor costs “has a lot to do with the demand for diesel technicians,” Ziemba said.

There are not enough trained personnel to satisfy the demand for new diesel technicians in the workforce. TechForce Foundation’s 2023 Technician Supply & Demand Report shows 3.1 open positions for every postsecondary technical program graduate in the diesel sector. This difference between technician supply and demand translated to higher labor costs in 2023.

Fullbay: Counter sales, labor rates are up year-over-year

The fourth annual State of Heavy-Duty Repair Report found that both counter sales and labor rates increased significantly in 2023 over 2022.

Nearly half of the report’s survey respondents reported a 21%-40% increase in counter sales from 2022 to 2023. Labor rates across the U.S. rose 9% in 2023, roughly equivalent to a $10 per hour increase.

Shops’ rise in counter sales is partly thanks to improvements to pandemic-era supply chain disruptions, according to Fullbay COO Chris O’Brien. During the pandemic, shops were less able to rely on local distributors’ final mile delivery to supply single parts as needed.

Where the data comes from

ATA’s Technology & Maintenance Council regularly issues reports on maintenance expenses to its fleets members, organized by VMRS-coded vehicle systems and geographic location.

The Decisiv/TMC North American Service Event Benchmark Reports collects and analyzes data from its service relationship management platform. Decisiv’s platform covers over 300,000 monthly maintenance and repair events at more than 5,000 service locations.

The Fullbay/TMC State of Heavy-Duty Repair Report used survey responses and shop data. The report drew from over 1,000 individual survey responses and shop data from North America, Australia, and New Zealand.

“You had to start really sprawling out across the U.S., maybe going into Canada, to source parts,” O’Brien told FleetOwner. “And, once you find a source on parts, then you can’t just buy one anymore because you don’t know if it’ll be there tomorrow or the next day.”

O’Brien said businesses were pressured to grow and make parts inventories more sophisticated.

“It required folks to move away from pen and paper to software or some sort of more sophisticated way to manage the inventory,” O’Brien said. “Because once you start taking money out of the bank and putting it on a shelf, it’s a risky proposition. You really have to be hyper-focused and manage it almost like the S&P 500.”

Shops with these growing inventories are finding sales from other businesses rather than just trucking outfits, according to O’Brien.

The report also found that 40% of shop respondents reported a net profit between 11% and 20%, while 25% of technicians said they worked at only three shops throughout their career.

“The changes are actually healthy,” O’Brien said. “I think what we’re starting to see is more of a normalization of the supply chain issues and hyperinflation, where it’s coming more in line with maybe pre-pandemic [levels]. What we’re starting to see is like 2018/2019 run rates on parts, part margins, part sales. Labor is still a little bit in flux.”