Trucking is a cornerstone of the global economy, moving more than 70% of freight in the United States. Whether you’re running a small independent operation or managing an enterprise fleet, understanding and controlling operational costs is vital for the long-term health and profitability of the business. While many trucking companies focus on fuel and maintenance as their primary expenses, there is another critical component that demands attention: driver & fleet safety.

Let’s dive into the operational costs of trucking, including those tied to safety measures, compliance, and risk mitigation.

1. Labor costs: Paying for skilled drivers

Labor costs are the most significant part of a fleet’s operational budget. The demand for skilled drivers has been growing over the years, driving up wages. According to industry estimates, labor accounts for approximately 30% of total fleet operating expenses. The cost of recruiting, training, and retaining experienced drivers adds to these expenses.

Beyond direct wages, benefits such as health insurance, retirement contributions, and vacation days add to labor expenses. Given the sometimes-grueling nature of long-haul trucking, some fleets offer signing and safety bonuses or performance-based pay to attract and retain top talent, driving up costs even more.

2. Fuel costs: Constantly fluctuating 

Fuel is among the most significant expenses for any fleet. Depending on the size of the operation and the distance traveled, fuel costs can account for up to 40% of total operating expenses. Fluctuations in diesel prices, coupled with vehicle type, load weight, and driving conditions, make this an unpredictable, yet unavoidable, cost.

To mitigate fuel costs, many trucking companies invest in newer, more fuel-efficient vehicles, use real-time GPS software, and implement driver training programs focused on safe, efficient driving habits such as managing speed, reducing idling and creating space between vehicles. Fuel surcharge programs can also help carriers offset price spikes, passing a portion of fuel cost increases to customers.

3. Maintenance and repairs: Keep vehicles moving

Truck maintenance and repair are ongoing and essential components of operational costs. On average, maintenance and repair costs can constitute about 10% to 15% of total operating expenses. These include routine maintenance tasks such as oil changes, brake adjustments, tire replacements, and engine tune-ups, as well as more significant repairs following breakdowns or accidents.

Predictive maintenance tools and telematics can help reduce unscheduled repairs by identifying issues before they become serious. However, even with these tools, the wear and tear associated with long-distance travel ensures that repair costs remain a constant financial concern for motor carriers.

4. Insurance costs: Covering risks

The trucking industry is inherently risky. Drivers often cover thousands of miles under changing weather conditions and road environments. To mitigate these risks, companies must carry comprehensive insurance coverage, which often includes general liability, cargo insurance, physical damage coverage, and workers’ compensation insurance.

Insurance premiums can vary based on a range of factors, including the type of cargo transported, the size of the fleet, the driving records of the drivers, and the regions traveled. Premiums for trucking companies can represent anywhere from 4% to 10% of total operating costs, depending on the operation. Companies with higher accident rates, or those who haul hazardous materials, can expect significantly higher premiums.

While they’re often categorized under other operational expenses, safety-related costs deserve special attention. These costs encompass investments in safety technologies, training programs, and compliance with federal and state regulations aimed at reducing accidents, improving driver well-being, and limiting risk.

Investing in safety technology

In recent years, the trucking industry has seen increased adoption of safety technologies designed to reduce accidents and improve operational efficiency. Tools such as AI dash cams, lane departure warning systems, automatic emergency braking, and collision avoidance technologies are becoming more common. Technologies like these can help lower accident rates. Though they may come with significant upfront costs, they often pay for themselves in the long run by reducing accident-related expenses and insurance premiums.

Driver training and education

Proper driver training is a crucial component of safety-related spending. Driver training involves both the initial training for new hires and continuous training provided by automated safety technology. Training programs can cover a wide range of topics, from defensive driving techniques to handling hazardous materials and adhering to Federal Motor Carrier Safety Administration (FMCSA) regulations.

Training programs overall are a worthwhile investment. Well-trained drivers are less likely to cause accidents, leading to fewer repair bills, lower insurance premiums, and improved fleet performance. In addition, a strong safety culture helps improve driver retention, reducing turnover and its associated recruiting and training costs.

Regulatory compliance and auditing

Complying with safety regulations is a non-negotiable cost for any transportation operation. Failure to comply with FMCSA regulations can lead to hefty fines, shutdown orders, and even the revocation of operating authority. Key compliance areas include Hours of Service (HOS) regulations, vehicle inspections, and drug and alcohol testing for drivers.

Maintaining compliance often involves costs related to administrative overhead, record-keeping systems, and third-party audits. Regular safety audits can help identify and rectify potential issues before they escalate into regulatory violations or accidents.

6. The hidden costs of crashes

Crashes represent one of the most unpredictable and potentially devastating costs for transportation businesses. Beyond the cost of vehicle repairs, medical expenses, and cargo losses, accidents often result in legal fees, increased insurance premiums, and lost business due to reputational damage. According to the FMCSA, the average cost of a truck accident involving a fatality is over $3.6 million.

Investing in preventive safety measures and ensuring regulatory compliance is the best way to avoid these catastrophic costs. Companies often see a return on investment through reduced accident-related expenses, lower insurance premiums, and improved driver retention.

Conclusion

Understanding and managing the operational costs of trucking is crucial to achieving and maintaining profitability in an industry with narrow margins. While fuel, labor, and maintenance are the most visible costs, safety-related expenses, though often overlooked, are equally critical. Investing in safety technologies, comprehensive training programs, and strict regulatory compliance not only helps reduce accidents and legal liability but also leads to long-term savings through lower insurance premiums and fewer repairs.