Briefly: Parts and labor costs fell slightly in final quarter of 2023

Technician working on truck engine

The American Trucking Associations’ Technology & Maintenance Council and Decisiv Inc. said combined parts and labor expenses fell 1.4% during the fourth quarter of 2023. 

In the latest Decisiv/TMC North American Service Event Benchmark Report, TMC and Decisiv found that 25 key VMRS systems dipped in the final quarter of 2023, reversing a 2.1% increase the previous quarter. 

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

The decrease was driven largely by parts costs, which dropped 2.2% in the fourth quarter of 2023 while labor costs fell 0.2%. While quarter-over-quarter parts and labor costs both declined in the last three months of the year, the parts-to-labor ratio held steady at about 1.5 for the past year. On a year-over-year basis, combined parts and labor costs in final quarter of 2023 were 0.2% higher than the same quarter in 2022.

However, in the annual comparison, a 2.2% drop in parts prices was offset by a 4.0% rise in labor costs. With the most recent quarterly change, while labor costs decreased, the decline was at a slower rate. The higher labor costs relative to parts pricing and the year-over-year rise likely points to an ongoing need to spend more to attract technicians.  

That industry-wide challenge for fleets and service providers is expected to continue as Baby Boomers age and fewer workers enter vocational education programs. The U.S. Bureau of Labor Statistics reported that diesel service technician employment is projected to grow 4% from 2021 to 2031, creating about 28,500 openings for diesel service technicians each year, on average, over the decade.

According to the TechForce Foundation’s Transportation Technician Supply & Demand Report, 177,000 new entrants in the diesel technician field are needed between 2022 and 2026. 

Lower parts costs may reflect a decline in freight tonnage, leading to a decrease in mileage for trucking companies. 

Kenworth's Chillicothe, Ohio plant turns 50

The Kenworth truck assembly plant in Chillicothe, Ohio Monday, March 4. celebrated 50 years of building trucks. The plant officially opened on March 4, 1974, and the plant’s first truck – a Kenworth W900 – rolled off the assembly line a day later.

Since then, Kenworth Chillicothe plant employees have produced more than 782,000 trucks in alignment with the company’s core values of quality, innovation and state-of-the-art technology. The plant employs about 2,500 people, making it one of the largest employers in Ross County (where Chillicothe resides), and is Kenworth’s largest manufacturing facility. 

“Chillicothe is a great place for Kenworth to build trucks because it is close to our customers, suppliers and, of course, a community of highly skilled employees we are fortunate to call our Kenworth family,” said Jim Walenczak, Kenworth general manager and PACCAR vice president. “Today we celebrate 50 years of innovation in Chillicothe, community involvement in Ross County and The World’s Best employees. This milestone is a testament to the dedication of our incredible workforce – both past and present – and Kenworth’s commitment to continued growth in Chillicothe.” 

The Kenworth Chillicothe plant is located on a 120-acre site 50 miles south of Columbus, Ohio. Since 2018, Kenworth has invested $300 million in the 622,000-square-foot facility that features advanced manufacturing technologies, including robotic assembly, and a state-of-the-art paint facility that utilizes the latest technology in the industry

PECO Pallet honors two carriers of the year

PECO Pallet, one of North America's largest providers of rental pallet services to the beverage, grocery, and consumer products industries, has recognized two trucking companies for exemplary performance in its inaugural Carrier of the Year award program.

Chosen as awardees for PECO's 2023 Carrier of the Year honors were:

  • Venture Logistics of Indianapolis, Indiana, named Linehaul Carrier of The Year;
  • JIT-EX of Memphis, Tennessee, recognized as Dedicated Carrier of The Year.

PECO works annually with dozens of trucking firms that provide time-definite transportation of PECO's signature red, nine-block pallets to thousands of customer locations across North America, as well as return of pallets to PECO depots.

"Both of these service partners earned the highest evaluation scores for their respective categories, demonstrating consistently superior service and excellent customer support throughout the year," said Mike Greene, PECO's senior vice president, Network Planning and Transportation. "And while we congratulate Venture Logistics and JIT-EX on their award-winning 2023 performances, we also want to recognize the contributions of all the carriers in our network who support our customers and are an extension of PECO's quality and service commitment. They all play a key role in our shared success."

PECO's inaugural Carrier of the Year program objectively assesses carriers on key performance metrics including equipment quality and availability, on-time performance, delivery updates, invoicing timeliness, safety, data quality, proactive communications, and overall customer support. Evaluation criteria also include cost-reduction initiatives, FMCSA CSA scores, and continuous improvement efforts.


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