2005 Benchmarking Survey
By Gary F. Petty, President and CEO National Private Truck Council
In order to examine a number of private fleet related issues, The National Private Truck Council commissioned McFain & Associates Research Inc. to perform a scientific Internet research study with members of the National Private Truck Council. Respondents were allowed to see and record responses to questions on their computer screens, leading to a user-friendly method of completing the interview. The survey was on-line and active between Jan. 19, 2005, and Feb. 2, 2005. A total of 71 respondents completed the questionnaire. What follows is a preliminary report of survey findings.
The overall purpose of the research was to facilitate benchmarking private fleet operations in order to validate performance and identify specific areas of opportunity.The four main focus areas were mission, demographics, operating practices and key performance issues.
The survey instrument was developed by a special committee of NPTC private fleet managers led by NPTC Vice Chair/Chair-Elect Harry J. Haney, III of Kraft Foods Inc. McFain & Associates reviewed all items on the questionnaire to ensure that the survey did not violate the basic rules of questionnaire design, wording and scaling (no double-barreled questions, no exhaustive and/or mutually exclusive response categories, etc.).
This results summary contains a quick overview of the study highlights.
Mission
Fifty-one percent reported the No. 1 reason for operating a private fleet was because it provides better customer service to key customers. Twenty percent reported that their No. 1 reason for operating a private fleet was because it provides cost advantages over external alternatives.
Sixty-two percent indicated that their private fleet is all company power and company employee drivers.
Fifty-eight percent reported that their fleet is used as leverage or as benchmark for for-hire carrier pricing.
Respondents reported that they expect the size of their private fleet to increase by a mean of 11.7% over the next 24 months.
Forty percent of those taking the survey said that if their private fleet does not haul all of their company freight they decide which shipments will not move on their private fleet by weighing private fleet cost versus external alternatives. Twenty-seven percent make the decision based on specific traffic lanes.
Private fleets are used for shipping finished goods from plant or mixing centers to the end customer by 87% of the respondents, while 71% use the fleets for inbound raw materials/packaging supplies, and 52% use the fleets for shipping finished goods from the plant to the mixing center.
Demographics
The survey discovered a relatively wide average in the lengths of hauls. Twenty-four percent reported average hauls of over 500 miles, 21% average hauls of 300-500 miles, 16% hauls of 200-300 miles and 20% hauls of 100 to 200 miles. Twenty percent of the respondents reported average hauls of less than 100 miles with 4% reporting hauls of less than 50 miles.
Thirty-two percent said that 75% of their company's outbound freight is hauled on their private fleet. Twenty percent reported that 100% of their outbound freight is hauled by their private fleet; while 18% said that less than 25% is hauled by their private fleet.
The private fleets haul considerably less inbound freight. Forty-two percent of the respondents reported that less than 25% of their inbound freight is hauled by their private fleet.
Fifty percent of the respondents in the survey indicated that their primary products are food products; 25% said building supplies and 25% said chemicals/petroleum.
The following list shows the responses by the mean number.
• Tractors: 161
• Tanker trailers: 45
• Refrigerated 53' trailers: 13
• Refrigerated 48' trailers: 15
• Van 53' trailers: 184
• Van 48' trailers: 145
• Van other-length trailers: 105
• Full-time non-union company drivers: 117
• Refrigerated other-length trailers: 14
• Full-time union company drivers: 143
• Full-time union leased drivers: 1
• Full-time union mechanics: 10
• Full-time non-union mechanics: 7
• Part-time drivers: 16
Operating Practices
A sizeable majority of the respondents - 70% - view their private fleet as a cost center. Seventy-nine percent reported that their private fleet has first pick of all available company loads going out of their own facility. Fifty-seven percent said their private fleet has first pick of all available loads coming into their facilities where their company pays the freight.
Fifty-five percent said that they do not run a slip seat operation in their private fleet.
Respondents were evenly split regarding the collection of operational data with onboard computers. Fifty-one percent reported collecting it, 49% said no.
Only 25% of the respondents reported using electronic logs.
Most private fleets - 58% - report to operations.
Forty-one percent reported operating a "blended" fleet. Fifty-six percent of the respondents reported that their private fleet has for-hire authority and solicit non-company back-haul freight. Of those who have for-hire authority, 83% reported that company freight takes priority.
Inter-company freight is hauled by 93% of the respondents companies. Only 10% have their own transportation sales force. Brokers or Internet sites are used by 48% to find backhauls.
Fifty-five percent use the private fleet to act as a broker or transportation department to move loads it cannot or does not want to move with the private fleet. Of those private fleets who do not haul all of their own company freight, other transportation modes are used in the following percentages (mean percentage is shown)
• Contract/common carriers: 56%
• Dedicated fleets: 13%
• Brokers/3rd-party logistics companies: 11%
Thirty-nine percent of private fleet maintenance is outsourced while 38% is performed by a combination of in-house and outsourcing, and 23% is performed in-house. Forty-four percent of the outsourced maintenance is on a full-service lease, 31% is on contract maintenance.
Key Performance Indicators
The following were cited as Key Performance Indicators by the indicated percentage of respondents.
• Annual driver turnover rates: 11%
• Percent of empty miles: 26.6%
• Percent of on-time delivery: 83.9%
• Average miles per gallon: 6.1
Fifty-one percent of the respondents said that on-time service and customer satisfaction was the No. 1 rating of evaluating fleet performance.
There was a wide variation in private fleet cost per mile: $1.96 or greater per mile was the highest percentage, reported by 18% of the respondents; $1.26 to $1.30 per mile was the second most frequently mentioned, by 13% of the respondents.
Tire costs per mile also varied widely: 19% of the respondents reported .02 cents per mile; only 23% of the respondents reported tire costs of more than .35 cents per mile. The highest costs - .055 cents per mile - were reported by 6% of the respondents.
Trailer costs per mile also varied widely: 18% reported .03 cents per mile; 42% said that it was .02 cents per mile or less.
Sixty-four percent of the respondents reported that tanker costs were .01 cents per mile.
Fourteen percent of respondents said that Class 7 and 8 tractor maintenance costs per mile were .07 cents per mile; 13% reported .06 per mile; 44% indicated the costs at .05 cents per mile or less.
Forty-four percent reported that the replacement cycle for their Class 7 and 8 trailers is in excess of 600,000 miles; 40% said the age replacement cycle is six years or more. Fifty-one percent reported their replacement cycle for dry vans is 10 years or more. Fourteen percent reported the replacement cycle for refrigerated trailers is 10 years or greater. (67% reported "not applicable" to this question.) Twenty-two percent indicated that the replacement cycle for tankers is 10 years or greater; 71% said the question was "not applicable" to their fleet.
The Final Report of this Survey will be used as the basis for a Panel Presentation at the NPTC Annual Conference, April 24-26, 2005, at the Pittsburgh convention center and Westin Hotel, Pittsburgh. The 2005 Private Fleet Benchmarking Survey Final Report will be available at the Conference ($150 NPTC members and $300 non-members.
See NPTC's web site at www.nptc.org for details on the conference and the survey.
The Final Report of this Survey will be used as the basis for a panel presentation at the NPTC Annual Conference, April 24-26, 2005, at the Pittsburgh convention center and Westin Hotel, Pittsburgh, Pa.
