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Why Traffic Congestion Is Such A Problem For The Trucking Industry

The American Transportation Research Institute (ASTRI) has released a new report considering roadway congestion and the impact on trucking is truly staggering. Congestion on the roadways has turned into a major problem, not just for passenger car drivers, but for fleet owners alike.

We’re going to dig a little deeper into the report, but here are some preliminary numbers to make your eyes bulge out of their sockets:

  • In 2014 congestion cost the trucking industry $49.6 billion.
  • In 2015 congestions cost the trucking industry $63.4 billion.
  • There was a 3.8 percent increase in police-reported crashes and a 7.2 percent increase in fatalities, representing the largest year-over-year increase in nearly 50 years.
  • This comes on top of U.S. GDP growth that rang in at 2.59 percent over the reporting period.
  • E-commerce growth has shown tremendous growth, jumping to 14.6 percent over the reporting period.
  • Major weather impacts included the 2015 blizzard Juno, which had a major impact on shipments in the northeastern United States.

Obviously, something needs to be done as these numbers don’t appear to be dropping. But how did the ASTRI come to these numbers. In the end, it was a matter of simple math. The group collected data using multiple sources, from their own GPS collection database to the Federal Highway Administration’s Freight Analysis Framework. Other ASTRI studies completed in the past were also factored in.

The primary task of the research into 2016 numbers was to create a new methodology for facilitating congestion impacts on a year-over-year basis. More importantly, the numbers gleaned from the report went through a rigorous vetting process before they were released.

The report went through a specific peer review process overseen by the Transportation Research Board of the National Academy of Sciences. As the ASTRI’s GPS database has also grown, information has become more readily available for in-depth research.

Looking at the Raw Numbers

The valuation to operate a large commercial motor vehicle comes in around $63.70 per hour. When you multiply that number by 996 million hours whittled away while the vehicle waits in traffic delays, it isn’t hard to see where the total cost lies. Open your imagination for a moment and picture over 362,000 commercial trucks sitting idle for a full year.

These costs were distributed across 11.2 million registered commercial motor vehicles across the United States. This puts average congestion cost per truck at around $5,664. Of course, any single cost is dependent on a number of factors, including fleet operation, but using these numbers it isn’t difficult to extrapolate congestion delays by cross-referencing the number of miles driven annually with congestion delays on a per-truck basis.

Of course, there were some unsurprising aspects to the report, first of which is that the most problematic traffic problems occurred around dense urban clusters. Yet again, the most congested area for truck drivers was the part of the country called “Spaghetti Junction” near Atlanta.

Out of all the states, the two with the most severe problems were Florida and Texas. Combined, the two states cost the industry well over $5 billion in added traffic-related costs. Another non-surprise is that California came in third place. Indeed, many expected the Golden State to come in at the top of the list.

Yet, the differences were small. Of the top ten states that cost trucking the most, each one rang in at over $2 billion in costs to the industry.

State-By-State Analsysis

Here are the top ten states contributing the most to trucking congestion, and what their cost per mile is. Note, that these top ten are different from the Texas, Florida, California trifecta. These stats represent the raw cost-per-mile by region. What this shows is that although the congestion is concentrated, the problem is still widespread.

  1. District of Columbia: $1.175 million
  2. New Jersey: $483,970
  3. Maryland: $361,772
  4. Delaware: $353,997
  5. Connecticut: $333,380
  6. Utah: $314,512
  7. Florida: $288,695
  8. Massachusetts: $276,277
  9. Louisiana: $247,492
  10. New York: $228,923

When you look at the total congestion costs by state, it provides you with a much more detailed look at where the trucking industry is combating costs, and where gains are being made.

What also becomes apparent is that some states are generating data unrelated to what we’ve listed here. Take Ohio as one example. They topped the list of total cost increases, with a 171.3 percent increase, yet they didn’t make the top ten in overall congestion costs.

The reason? Ohio is on an infrastructure spending spree. The state put over 80 roadway projects on the map in 2015. The delays caused by these projects cost the trucking industry in over $450 million.

The same story can be told in Utah, where 13 of the Beehive State’s top 15 construction and infrastructure improvement projects are happening along the state’s National Highway System.

Still, that doesn’t mean every state experienced huge congestion increases. Some states, including Missouri and Mississippi saw congestion cost declines of 27.1 percent and 26.6 percent respectively.

Missouri specifically saw a large decrease due to the number of construction projects that came to a close, and the larger traffic capacity due to the Daniele Boone Bridge and Route 364 project completion and openings.

Yet, when you normalize the data across the entire network, your perspective goes national. After all, a full 91 percent of the total congestion costs in 2015 occurred in metropolitan areas. Of that total, $5.8 billion occurred outside of major metros, no small number itself.

The tristate New York-New Jersey-Pennsylvania area remained in its top spot ringing in nearly $4.6 billion in total congestion costs.

Data-Driven Increases

When it comes to congestion on a cost change basis, the first quarter of 2015 experienced the highest level of increase over the previous year. The good news? When you look at the total percentage change, the third quarter of 2015 saw the lowest level of cost increases.

But how can this be? How can you see a higher level of congestion, yet still record the lowest level of cost increases over the reporting period?

The main reason is due to July being the highest month for congestion in 2014. In 2015, those numbers didn’t reach the same point until March. Put simply, congestion costs fell through August before reaching their normal numbers in September. This resulted in the year-over-year increase we saw in July, even as higher congestion coupled with lower costs.

When you spread the total cost of congestion across the entire National Highway System network, fleet average industry costs per mile came in at a whopping $129,919 for 2015. This is where the 16.4 relative increase comes in. In 2014, that number was $111,578 per mile.

With fewer road segments contributing to the congestion, this shows that the major congestion problems once again come from a relatively small portion of the network. Think Texas, Florida, California, et al.

Trucking Is Uniquely Impacted

When it comes to traffic congestion, the trucking industry is uniquely impacted. The fact is, trucking companies rely on the country’s roadway network to get goods from one place to another.

Road congestion not only increases a fleet’s operating costs, but it also increases labor costs and wear and tear on the vehicles being used. Traffic congestion also puts stress on your truck drivers that wouldn’t otherwise be present.

Whether it be on-duty time, maintenance costs or an increased fuel burden traffic congestion anecdotally also contributes to the truck driver employment shortage. One must also consider inflationary effects that result from an inefficient supply chain. When pick-up and delivery schedules are impacted by a truck driver shortage, costs rise for everyone involved.

As the United States GDP continues to expand and job numbers show solid growth, the last thing the economy needs is a major efficiency problem disrupting the supply chain. If there is a silver lining here, it is that the congestion numbers seem to be following U.S. GDP growth, which continues to show strength.

The Final Conclusion

The fact is, we could dig even deeper into local and county-level congestion information. This report is huge and provides excellent insight into where the major problem areas are and how much this problem costs the industry. Feel free to view it yourself for all the raw data.

As we mentioned before, we are talking nearly 1 billion hours in lost time between 2014 and 2015. Furthermore, increased delay costs significantly outpaced national average declines. While some attribute this to continued GDP growth and a strong economy, there’s another side to this argument, and that’s one of infrastructure.

There’s a reason why infrastructure improvements have been on the minds of politicians as of late. Our nation’s roads, bridges and highways are in desperate need of repair and ensuring money is put to improving them, delays and congestion will continue to be an issue for the foreseeable future.

Where 2016 numbers come in is for next year’s report, but if nothing changes between now and then, expect to see more of the same, if not worse data points. If something isn’t done soon, we could see supply chain congestion having a continued negative impact on both the trucking industry and the economy for some time to come.

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