“I’m happy to report that after the last quarter increase, we’re now seeing the parts and labor costs come back down again,” Ziemba said. (John Sommers II for Transport Topics)
NASHVILLE, Tenn. — The trucking industry saw parts and labor costs trend downward in the fourth quarter of 2024 after almost a year of increasing expenses, American Trucking Associations’ Technology & Maintenance Council and Decisiv revealed in a report March 9.
The Decisiv VMRS Service Data Quarterly Report found combined parts and labor costs in Q4 fell 1.6% compared with Q3, driven by a 1.5% drop in parts costs and a 1.9% decline in labor costs. On a year-over-year basis, combined parts and labor costs posted a 1.6% decline.
The report combines the TMC Vehicle Maintenance Reporting Standards data with Decisiv maintenance technology.
“This presentation — to be honest, I wasn’t really looking forward to it, because we had three quarters of increasing parts and labor costs going into the Q3 of last year,” said Rob Ziemba, Decisiv’s vice president of marketing. “And Q3 threw us for a loop; it was increasing parts and labor costs. We had it pretty much across the board, across most of the VMRS systems. So in thinking about this presentation, I was like, ‘I don’t want anyone to be shooting the messenger.’ So I was a little hesitant. But I think you’ll see some nuggets here.”
The report noted that aerodynamic devices accounted for the most significant sequential cost increase overall at 6.4% for parts and labor combined. That was followed by general accessories rising 4.6% and frames jumping 3.4%. The most significant sequential decrease was drive shafts with an 11.1% decline. That was followed by fuel systems at a 10.7% drop and steering systems, combined costs for which fell 10.2%.
“My concerns of being the bearer of bad news actually never came to fruition,” Ziemba said. “I’m happy to report that after the last quarter increase, we’re now seeing the parts and labor costs come back down again. Obviously, we’ll continue to monitor this, but very good news.”
On a year-over-year basis, the most significant increase in parts and labor costs was aerodynamic devices at 6.3%, followed by automatic transmissions at 5.8% and general accessories at 5.3%. The most significant decrease in parts from last year was a 8.9% decline for manual transmissions, followed by an 8.1% drop in combined costs for rear axle drives and a 6.1% drop for drive shafts.
“The other piece of this that’s important to highlight is, for the first time in a long time, we’re seeing labor costs coming down,” Ziemba said. “That has been consistently. For this quarter, we actually have labor coming down 1.9%. And even on a year-over-year basis, labor is down almost a full percent. Something we haven’t seen for quite a while.”
Ziemba added that this could point to better technician retention since turnover has been one of the key issues driving up labor costs. He also suspects that lower tonnage volumes are helping to keep cost down since that suppresses the ability for carriers to earn.
“While the costs are coming down, we’re still seeing service activity going up,” Ziemba said. “Service activity was up about close to 5% in Q4, so there’s more service activity. You would think — with more service activity — that would be driving costs higher. In spite of the actual increase in activity, we’re still seeing the prices coming down.”
Decisiv held a second meeting later March 9 to introduce Tim Hardin as its newest president. He most recently served as senior vice president and general manager of global data services at Epicor. His experience includes positions at Solera and ADP Dealer Services. Dick Hyatt will continue to serve as CEO and chairman. Decisiv also announced it has partnered with trailer manufacturer Wabash to support its dealer network grow.
