Factors Influencing Vehicle Operating Costs of Haulage Firms in a Developing Country

Vehicle operating cost is the cost that haulers incur in rendering freight services. This cost is influenced by operational, economic, fixed asset, and institutional factors. Haulage firms must take the right decision on these factors to minimize the vehicle operating cost and increase their profit. This study examines the factors determining the vehicle operating costs of haulage firms in Nigeria. The data for this study was obtained through the administration of structured questionnaires randomly on 337 respondents out of 2154 staff in the 8 selected registered haulage firms having their headquarters in Lagos, Nigeria. The questionnaire was used to collect information on components of truck operation influencing vehicle operating costs. The result of the OLS multiple regression model shows that all the factors were significant and predict vehicle operating costs but to a varying extent. The coefficients of significant factors were wages (β = 0.324; p ≤ 0.01), empty running (β = 0.297; p ≤ 0.01), fleet size (β = 0.264; p ≤ 0.01), training (β = -0.201; p ≤ 0.01), weight of freight (β = 0.145; p ≤ 0.01), drivers experience (β = 0.132; p ≤ 0.01), vehicle age (β = 0.111; p ≤ 0.05), administrative fee (β = 0.100; p ≤ 0.05) and maintenance (β = 0.096; p ≤ 0.05) influence vehicle operating costs of haulage firms respectively. The study concluded that driver’s wages, empty running, fleet size, and training were important factors influencing the vehicle operating costs of the haulage firms. The study recommends useful policy decisions to improve the performance of haulage businesses in the study area.