Labor rates, counter sales up at indie shops, Fullbay report finds

Over the past few years, independent commercial vehicle repair shops struggled with supply chain issues, consolidation by larger companies, and labor shortages. Things are looking up, though, according to Fullbay’s fourth “State of Heavy-Duty Repair,” which found that independent shops exhibited 27% growth in 2023.

This was aided by a 9% increase in labor rates, more reliance on mobile maintenance, and rising frequency in counter parts sales, explained Patrick McKittrick, CEO of Fullbay, at TMC’s 2024 Annual Meeting.

Overall growth

The 27% growth in 2023 was less than the 37% rate from 2022, though McKittrick chalked the discrepancy up to inflation, with 2023’s pace akin to business as usual.

“What you're seeing is more a return to normalcy,” McKittrick stated. “That [27%] line is probably a better long-term [sign that] shops can grow. The growth is still there, and I think that means that those shops are poised to be around for a long while.”

The difference between 2023’s results and 2022’s could also have been due to differences in data collection. While McKittrick commented that the 2023-2024 report did not draw from as large of a sample size as last year, they instead worked to refine their data pool for greater accuracy. This year, the company surveyed over 1,000 freight, logistics, and repair industry professionals while also utilizing data from 500 Fullbay platform users. The company also collected digital marketing data from 200 Dieselmatic users, a digital marketing platform for diesel repair shops which Fullbay acquired in April 2022.

Even with these data differences, Fullbay’s report hypothesized that 2023’s growth was sustained by an 11% increase in the average invoice size (from mid-$900s to over $1,050) and a 37% increase in the amount of invoices made. As a result, the fourth annual report noted that over 40% of responding shops saw a net profit between 11-20%, and 18% of surveyed shops collected between $1-$2 million each yar. Even on the smaller end of shop revenue, Fullbay found 12% of shops reported revenue collection of $250,001-$500,000.

Labor rates

For 2023-2024, Fullbay also found that labor rates increased across the country by about 9%, or $10 per hour. This meant that the median labor rate in North America increased from $115/hour in 2022 to $125/hour in 2023. By region, the Northeast saw the largest labor rate increase of roughly 15%, or about $18.

While 2023’s labor rate increase is smaller than last year’s $12 rise, McKittrick again attributed the difference to inflation in 2022 and noted that labor rates are likely to continue to rise.

Read more: Fullbay's 2023 State of Heavy-Duty Repair shows shop revenue recovery, increased technician pay

“A lot of times, most of these independent shop owners are great technicians that have come up in the industry, but they don't all naturally know how to run a business,” McKittrick noted. “And they get reluctant to raise prices. And what we hope to do through some of this is spread the word that everyone is raising their rates, and it's okay.”

Mobile maintenance

Another large trend from the State of Heavy-Duty Repair report is the growth of mobile maintenance. Fullbay found that 82% of respondents offered some form of mobile service. And the labor rate is stronger for mobile repair, too, at $142/hour in comparison to all labor rates ($125/hour).

However, mobile service still has room to grow. The report found 42% of shops offering mobile repair used only one truck, while 22% offered two trucks. About 27% of shops reported mobile service trucks brought in up to $10,000 in revenue and 25% said they earned $10,001-$20,000.

How shops bring in that revenue did tend to vary, with 35% charging their customers per hour, 24% as a fixed fee from one location to the next, and 21% per mile.

Counter sales

Finally, another money maker for shops in 2023 was the parts counter. According to the report, from 2022-2023, 40% of respondents saw an increase in their counter sales, with 67% of respondents collecting $0-$19,999 per month in revenue.