Parts, Labor Expenses Up More Than 8% Year-Over-Year in Q1

But Costs Slowed Compared With Q4 2022
Tire technician
Parts costs rose more than 8% and labor 10%, respectively, in the first quarter of 2023 compared with the same period a year earlier. (Penske)

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Maintenance parts and labor expenses for trucking companies across North America rose more than 8% year-over-year in the first quarter of 2023 and are unlikely to return to previous levels, according to a recently released study.

But the study by the American Trucking Associations’ Technology & Maintenance Council and Decisiv Inc. showed U.S. and Canadian parts and labor expenses stabilized in the first quarter compared with the final three months of 2022, rising 0.7% sequentially.

Splitting up the two segments, TMC and Decisiv said parts costs rose more than 8% and labor 10%, respectively, in the first quarter of 2023 compared with the same period a year earlier.

Inflationary factors have driven up the cost of raw materials, energy and labor for manufacturing, and when the higher cost of transporting goods is added in, a floor is set to remain under expenses, TMC and Decisiv said, although supply chain improvements are tempering further increases.

Between the final quarter of 2022 and the first three months of 2023, parts costs dropped 0.4% and labor costs increased 2.3%, reflecting that new vehicles on back order for historically long periods are finally reaching end users, the study authors said.

The ongoing shortage of technicians that forces fleets and service providers to offer higher pay as a recruiting and retention measure is still providing support for labor costs though, they added.

Breaking down the data by Vehicle Maintenance Reporting Standard system level codes resulted in the following cost differences:

  • Cab and Sheet Metal: Minimal change was recorded the most recent quarter and the prior quarter, while costs rose 21.4% on an annual basis.
  • Exhaust: Small increases between the last two quarters and larger increases year-over-year drove combined parts and labor service costs up 11.1%.
  • Cooling: Parts and labor combined costs rose 6.8% between Q4 and Q1, and 14% on an annual comparison.
  • Fuel System: Following a 7.4% year-over-year increase, costs dipped slightly between the last two quarters.
  • Frame: Parts and labor costs dropped 3.7% overall between the last two quarters based on 3.3% lower parts costs and 4.5% lower labor expenses.
  • Transmission: While annual parts and labor costs were up 6.4%, combined expenses between the last two quarters dropped 2.5%.

The previous quarterly report found parts and labor costs increased a combined 13% year-over-year in the final three months of 2022.

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Reston, Va.-based Decisiv bases its report on data found using VMRS codes. These are used to track specific issues with trucks and equipment. TMC licenses the codes to carriers, mechanics and manufacturers with the goal of creating an industry standard.

Decisiv and TMC’s most recent report incorporated service activity reporting on the parts and labor costs for the top 25 VMRS system codes, which accounted for more than 97% of the total service activity during the first quarter of 2023. Previous reports only accounted for 10 system codes, said TMC Executive Director Robert Braswell.

The data is compiled from more than 300,000 monthly service maintenance and repair events at more than 5,000 locations.