1. Road Transport Forum NZ
2015 Operator Comparison Report
Professor Frank Scrimgeour

2. 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.

3. 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.

4. 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

5. Groups that Provided Data
Business Activity
Metro
Intercity
Rural North,
Rural South & General

6. Groups that Provided Data
Size of fleet
Size & Activity
Metropolitan
Intercity
Rural North
Rural South
General
1 Truck
Owner Driver
and Small
Owner Driver and Small
Owner Driver Small and
Medium
2-5 Trucks
6-11 Trucks
Medium and Large
12+ Trucks
Large

7. 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.

8. 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

9. Industry Results
Return on Total Assets (Before interest exp.)

10. Industry Results Avg. Cost and Operating Profit as a % of Net Income
(Excluding Freight Exp.)

11. Comparative Median Results of all Activity Groups
Description
Whole Industry
Metro
Intercity
Rural North
Rural South
General
(Sample Size)
(54)
(13)
(11)
(8)
(14)
Gross Income
(Excluding other ongoing income)
$4,309,009
$4,220,715
$3,507,649
$4,170,652
$7,551,509
$1,921,104

12. Comparative Median Results of all Activity Groups
Description
Whole Industry
Metro
Intercity
Rural North
Rural South
General
(Sample Size)
(54)
(13)
(11)
(8)
(14)
OPERATOR PROFILE - Expressed as % of Net Income
Freight Expense
2.06
4.20
0.00
4.58
0.62
4.54
Wages & Salaries (Ex. mech)
25.25
26.09
27.90
24.36
25.96
23.04
Ownership Costs
9.84
9.18
11.82
8.13
9.69
11.23
Fuel & Oil Costs
13.26
9.71
15.87
14.59
13.31
13.54
Vehicle Insurance
1.87
1.72
2.46
1.31
1.90
2.04
Maintenance
9.02
8.05
7.95
10.66
9.99
10.91
Road User Charges
11.25
8.02
13.06
10.95
11.31
12.23
Tyres
2.40
1.85
2.45
3.23
2.84
2.12
All Other Costs
9.98
11.39
7.46
9.12
10.50
11.45
Operating Profit (B4 all. sal)
11.54
18.11
6.19
16.41
10.53
12.15
Working Owners all. Salary
1.73
1.37
2.28
2.18
1.55
5.11
Operating Profit
(After allocated salary)
6.21
13.15
0.25
9.31
9.19
Total Vehicle Costs
51.22
40.55
55.98
52.52
49.52

13. Comparative Median Results of all Activity Groups
Description
Whole Industry
Metro
Intercity
Rural North
Rural South
General
(Sample Size)#
(54)
(13)
(11)
(8)
(14)
KEY PERFORMANCE MEASURES
Net Income - $ per Truck
228,496
165,603
252,416
280,962
208,202
234,677
Operating Profit (After allocated salary) - $ per Truck
12,687
22,094
502
22,989
12,589
13,324
Net Income - $ per 1000km travelled
3,565
4,179
3,513
3,584
3,474
3,556
Operating Profit (After alloc salary) - $ per 1000km
177
526 5
233
216
298
Kilometres per Truck (km)
58,596
40,000
100,000
82,096
60,938
58,256
Return on Total Assets
(Before int. exp.) %
8.75
15.10
2.09
12.33
7.96
12.34
(After interest exp.) %
7.17
12.18
0.28
10.70
6.19
9.13

14. Comparative Median Results of all Activity Groups
Operating Profit (Before allocated salary) per 1000km Travelled

15. Comparative Median Results of all Activity Groups
Operating Profit (After allocated salary) per 1000km Travelled

16. Comparative Median Results of all Activity Groups
Return on Total Assets (Before interest & tax, after alloc. salary)

17. Comparative Median Results of all Activity Groups
Net Income per Truck

18. Comparative Median Results of all Activity Groups
Kilometers per Truck

19. 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.

20. 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.

21. 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).

22. Year on Year Comparison Tables - Median Results from Report Years 2015 and 2010
In addition to comparison of all participants, three groups from are compared with the same groups in For comparative study, the groups are categorized on the basis of:
Fleet mix
Business activity
Income

23. 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%

24. 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

25. 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

26. 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.