Road Transport Forum NZ
2015 Operator Comparison Report
Professor Frank Scrimgeour
1
Why the Operator Comparison Report?
To evaluate current performance
To evaluate how we are tracking over time
To have information to inform contractual negotiations
and policy debates
The group results of this report are used to update and
check the RTFNZ-Deloitte Quarterly Index.
2
Median Results vs Average Results
Throughout the publication, preference has been given to
showing median results for operating groups instead of
averages.
Averages can be skewed (distorted higher or lower) when one
or a few businesses have extremely high or low results for a
ratio compared to the other businesses.
3
Presentation Outline
•
•
•
•
•
•
•
Groups that provided data
Industry results
Comparative Median Results of all Activity Groups
Survey responses by activity and fleet size
Survey responses by gross income
Year on Year comparisons
Conclusions
4
Groups that Provided Data
Business Activity
• Metro
• Intercity
• Rural North,
• Rural South & General
5
Groups that Provided Data
Size of fleet
Size & Activity
1 Truck
2-5 Trucks
6-11 Trucks
12+ Trucks
Metropolitan
Intercity
Rural North
Rural South
General
Owner Driver
and Small
Owner Driver
and Small
Owner Driver
Small and
Medium
Owner Driver
and Small
Owner Driver
Small and
Medium
Medium and
Large
Medium and
Large
Large
Medium and
Large
Large
6
Groups that Provided Data
Fleet Mix Groups
Fleet Mix
Description
Fleet of Predominantly Single Unit Trucks At least 80% of trucks (power units) in the fleet are single
unit trucks not towing trailers.
Fleet of Mixed Sized Trucks
The fleet includes a mixture of both sizes, of which neither
‘single unit trucks’ or ‘combination vehicles’ alone make up
80% of trucks (power units) in the fleet.
Fleet of Predominantly Combination
Vehicles
At least 80% of trucks (power units) in the fleet are
combination vehicles towing 1 or more trailers.
7
Groups that Provided Data
Income Groups
• Up to $500,000
• $500,000 to $1,000,000
• $1,000,000 to $5,000,000
• Over $5,000,000
8
Industry Results
Return on Total Assets (Before interest exp.)
14
13.0
12.9
12
10
%
8.8
12.2
9.9
9.4
9.4
8
5.2
6
4
2
0
1991
1994
1996
1998
2002
2006
2010
2015
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Industry Results
Avg. Cost and Operating Profit as a % of Net Income
(Excluding Freight Exp.)
Operating Profit
(After allocated
salary)
6%
All Other
Costs
11%
Road User
Charges
11%
Tyres
3%
Maintenance
(Including parts;
mechanics)
10%
Fuel & Oil
13%
Wages & Salaries
(Excluding
mechanics)
31%
Ownership
Costs
13%
Working Owners
Allocated Salary
1%
Vehicle Insurance
1%
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Comparative Median Results of all Activity Groups
Description
(Sample
Size)
Gross
Income
Whole Industry
Metro
(54)
(13)
Intercity Rural North Rural South
(11)
(8)
(14)
General
(8)
(Excluding other ongoing income)
$4,309,009
$4,220,715 $3,507,649 $4,170,652 $7,551,509
$1,921,104
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Comparative Median Results of all Activity Groups
Description
Whole
Metro
Industry
(Sample Size)
(54)
(13)
OPERATOR PROFILE - Expressed as % of Net Income
Freight Expense
2.06
4.20
Wages & Salaries (Ex. mech)
25.25
26.09
Ownership Costs
9.84
9.18
Fuel & Oil Costs
13.26
9.71
Vehicle Insurance
1.87
1.72
Maintenance
9.02
8.05
Road User Charges
11.25
8.02
Tyres
2.40
1.85
All Other Costs
9.98
11.39
Operating Profit (B4 all. sal)
11.54
18.11
Working Owners all. Salary
1.73
1.37
Operating Profit
(After allocated salary)
6.21
13.15
Total Vehicle Costs
51.22
40.55
Intercity
Rural North
(11)
(8)
Rural
South
(14)
General
(8)
0.00
27.90
11.82
15.87
2.46
7.95
13.06
2.45
7.46
6.19
2.28
4.58
24.36
8.13
14.59
1.31
10.66
10.95
3.23
9.12
16.41
2.18
0.62
25.96
9.69
13.31
1.90
9.99
11.31
2.84
10.50
10.53
1.55
4.54
23.04
11.23
13.54
2.04
10.91
12.23
2.12
11.45
12.15
5.11
0.25
9.31
8.02
9.19
55.98
51.22
52.52
12
49.52
Comparative Median Results of all Activity Groups
Description
(Sample Size)#
KEY PERFORMANCE MEASURES
Net Income - $ per Truck
Operating Profit (After allocated
salary) - $ per Truck
Net Income - $ per 1000km
travelled
Operating Profit (After alloc salary)
- $ per 1000km
Kilometres per Truck (km)
Return on Total Assets
(Before int. exp.) %
Return on Total Assets
(After interest exp.) %
Whole
Industry
(54)
Metro
Intercity
(13)
(11)
Rural
North
(8)
Rural
South
(14)
General
(8)
228,496
165,603
252,416
280,962
208,202
234,677
12,687
22,094
502
22,989
12,589
13,324
3,565
4,179
3,513
3,584
3,474
3,556
177
526
5
233
216
298
58,596
40,000
100,000
82,096
60,938
58,256
8.75
15.10
2.09
12.33
7.96
12.34
7.17
12.18
0.28
10.70
6.19
9.13
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Comparative Median Results of all Activity Groups
Operating Profit (Before allocated salary) per 1000km Travelled
$600
562
535
$500
439
$400
370
$300
206
$200
$100
$0
0
N/A
Metropolitan
Intercity
Rural North
Island
Rural South
Island
General
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Comparative Median Results of all Activity Groups
Operating Profit (After allocated salary) per 1000km Travelled
600
526
500
400
298
300
%
233
200
216
100
0
5
0
N/A
Metropolitan
Intercity
Rural North
Island
Rural South
Island
General
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Comparative Median Results of all Activity Groups
Return on Total Assets (Before interest & tax, after alloc. salary)
16
15.1
14
12.3
12.3
12
10
8.0
% 8
6
4
2.1
2
0
N/A
Metropolitan
Intercity
Rural North
Island
Rural South
Island
General
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Comparative Median Results of all Activity Groups
Net Income per Truck
$300,000
280,962
252,416
$250,000
234,677
208,202
$200,000
165,603
$150,000
$100,000
$50,000
$0
0
N/A
Metropolitan
Intercity
Rural North
Island
Rural South
Island
General
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Comparative Median Results of all Activity Groups
Kilometers per Truck
120,000
100,000
100,000
82,096
80,000
km 60,000
60,938
58,256
Rural South
Island
General
40,000
40,000
20,000
0
0
N/A
Metropolitan
Intercity
Rural North
Island
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Comparative Median Results of all Activity Groups
Median results for all activity groups show that metropolitan operators achieved
the best financial results.
• Metropolitan operators were the best performing activity group for return on
total assets (before interest expense) with a median result of 15.10%.
• General operators were the second best for return on total assets (before
interest expense) with a median result of 12.34%.
• Metro incurred the lowest median total vehicle costs of 40.55% while
travelling a median 40,000 kilometres (KM) per truck.
• The Intercity group experienced higher median vehicle expenses in most areas
resulting in the highest median total vehicle costs of 55.98%, travelled more
median kilometres per truck (100,000) than the other groups and next highest
income per truck $252,416.
• General had a much smaller median gross income of $1.9M compared to the
other activity groups whose median Gross Incomes were each over $3.5M. 19
Survey Responses by Activity and Fleet Size
• Within the Metro Group the Medium/Large Fleet had Return on
Total Assets (before interest) and Return on Total Assets (after
interest) of 15.1% and 12.2%, respectively.
• Within the Intercity Group the Medium/Large Fleet had the Return
on Total Assets (before interest) and Return on Total Assets (after
interest) of 4.3% and 3.6%, respectively.
• Within the Rural South Group the Medium/Large Fleet had the
Return on Total Assets (before interest) and Return on Total Assets
(after interest) of 8.8% and 7.2%, respectively.
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Survey Responses by Gross Income
Interesting results were seen when gross income bands were used to
group similar sized businesses.
• For operating profit (after allocated salary) per truck, the >$5M gross
income group, had better median ($20,275) and 75th percentile
($34,246) performance than all other income groups.
• For operating profit (after allocated salary) per 1000km, the $1M$5M group had the highest Median ($223) and 75th percentile
($1,016).
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Year on Year Comparison Tables - Median Results
from Report Years 2015 and 2010
In addition to comparison of all participants, three groups from 2015
are compared with the same groups in 2010. For comparative study,
the groups are categorized on the basis of:
• Fleet mix
• Business activity
• Income
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Year on Year Comparison Tables - Median Results
from Report Years 2015 and 2010
• The largest increase of 43% is observed in the cost of salaries and
wages.
• Maintenance cost increased by 36%
• Working owners’ allocated salary decreased by 47%
• Net income per 1,000 km increased 17%
• Net income per truck increased 27%
• Kilometres per truck increased by of 8%
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Year on Year Comparison Tables - Median Results
from Report Years 2015 and 2010
• The single unit trucks witnessed the highest increase in the cost of
salaries & wages and ownership cost
• Working owners allocated salary of combination vehicles declined by
41%
• Mixed size trucks witnessed the highest increase of 35% in net
income per 1000 km
• Single Unit trucks witnessed the highest increase of 42% in net
income per truck
• Mixed size trucks witnessed a decline of 5% in km per truck
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Year on Year Comparison Tables - Median Results
from Report Years 2015 and 2010
• Intercity operators witnessed the highest increase in the cost of
salaries & wages
• Metro operators witnessed the highest increase in road user charges
• Rural North operators witnessed the highest decline in vehicle
insurance cost.
• Intercity operators witnessed the highest increase of 50% in net
income per 1000 km.
• General operators witnessed the highest increase of 70% in net
income per truck.
• General operators witnessed the highest increase of 45% in km per
truck.
• Intercity operators witnessed a decline of 3% in km per truck
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Conclusion
• There is a statistic for everyone!
• Hence it is important to use the most appropriate data
• Things have improved over the last five years
• However things are not great when considered over the longer term
• Operators should know their technologies, their markets, their cost
structures and their pricing
• Smart operators can use productivity analyses to gain incites beyond
the benchmarking results
• Data is essential to sustain political arguments.
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