With severe budget cuts, stringent demands for busing students with disabilities, and increasing service requirements for nontraditional modes of student transportation, it has become increasingly important to monitor and control student transportation costs. Student transportation is an important and complex school-support activity that typically consumes 4 to 5 percent of a school district's budget. Administrators need a new methodology for measuring the performance of transportation operations so they can better manage expenditures and maximize the ever-shrinking pool of federal, state and local dollars.
Collection and analysis
Student transportation is inherently complex. Variables such as topography, student density, traffic, school locations and bell times greatly affect the resources required to transport students safely and in a timely fashion. In addition, accounting, fleet management and routing software can provide empirical data that enables transportation cost and quality to be measured more efficiently and effectively. Even so, business managers and transportation managers often find it difficult to define, capture, analyze and interpret appropriate measures of transportation cost and service quality. However, by using a structured analytical approach, it is possible to measure both. Administrators using this method can spot important trends that may indicate whether or not further scrutiny and management controls are warranted.
By applying a consistent approach to data collection and analysis, and establishing explicit standards of performance, it is possible to measure the cost-effectiveness and service quality of a transportation program. These results can be compared with peer transportation systems at the local, state and national level or against internal transportation sections or divisions in larger operations that make up the overall transportation organization. Establishing and comparing explicit standards of performance will provide management with the basis for:
Evaluating the advisability of outsourcing or insourcing services.
Developing a funding plan as student enrollment grows or declines.
Establishing clear, understandable and equitable standards of performance and managerial objectives for those running the student-transportation program.
Framing the analysis
The first step in measuring the performance of school bus operations requires a definition of its functional components, which will frame the analysis:
The level of service required, such as rider eligibility criteria, allowable passenger loads and maximum allowable ride times. This is the first parameter that must be understood in order to measure operational cost-effectiveness. The cost of transportation services, like most services, varies considerably depending on the quality and timeliness of the busing service. To the extent that more rigorous demands such as shorter ride times, reduced walking areas, or fewer students per seat are mandated, the system will necessarily require more equipment, drivers and maintenance technicians. This increase in resource requirements will result in a commensurate increase in capital and operational costs.
The number of units of service required. This will establish the amount of resources consumed in providing transportation. Each category of service is defined along functional lines, and resources are allocated to these functional lines based on the proportional share that is consumed by each service. For example, employees are defined in terms of full-time equivalent (FTE) positions — an important refinement in school transportation operations where employees often perform multiple duties outside their core job function. Certain relationships are then quantified for the purpose of internal and external comparative analysis. Examples of the ratios that can be calculated include the number of buses maintained per technician, the spare bus ratio or the capacity utilization of the bus fleet.
The cost per unit of transportation services provided. The true, total cost of transportation must be estimated in order to evaluate costs against comparative standards. Often, transportation costs such as employee benefits, vehicle insurance, utilities and asset depreciation are charged to other object codes within a school district budget. This results in understating the total cost of busing students. It is crucial that all relevant costs associated with transportation services are captured and allocated to the transportation function.
After these data have been collected and tabulated, calculate the ratios and quantitative relationships that will be used to evaluate the transportation program. Generally speaking, two broad operational categories warrant evaluation in a transportation operation: routing and busing operations (logistics); and fleet maintenance and support operations.
Although a variety of indices can be used for evaluation within each of these categories, a few of the more significant measures can serve as examples of how decisions can affect the use and consumption of resources:
Quantitative measures for evaluating routing and logistics. Ultimately, the cost of a student transportation program is a function of transporting the maximum number of students with the fewest number of buses in the shortest possible time. Depending on the region, one can expect approximate annual costs of up to $762 per transported student, and $41,000 to $43,000 per active (assigned) bus.
To understand what influences these costs, it is important to examine the passenger capacity efficiency. This means that each bus should be filled to the greatest extent possible for each run (run utilization), and as many runs should be coupled to each bus as possible each day (route utilization). Well-run operations typically have 70 to 85 percent bus run utilization and an overall ratio of 1.0 to 1.3 buses used per 100 transported students in urban and suburban areas (1.9 to 3.0 buses in very rural regions). The lower the run utilization value, and the higher the route utilization value, the greater the cost of transporting each student.
Quantitative measures for evaluating fleet maintenance and support operations. The cost of repairing, maintaining and fueling the fleet will vary not only with the number and type of buses, but also with the relative efficiency and effectiveness of the fleet support operation. Failing to recognize the long-term effect of controlling fleet-support costs is a trap many schools fall into, especially when needed vehicle replacements are deferred. Keeping an older bus may defer a $55,000 to $80,000 capital outlay, but only at the cost of greatly increased maintenance expenses, which may easily exceed the amortized capital cost of purchasing a new bus, and a potentially significant decrease in unit reliability.
To evaluate the cost of supporting the fleet, it is important to reduce diverse assets to a uniform common denominator. To do this, each vehicle in a fleet is expressed in terms of vehicle equivalent units (VEU), which represents the service effort required to maintain a standard automobile. In the case of school buses, this translates to between 2.5 and 4.0 VEUs per vehicle, depending on the bus type or class. After establishing the VEU count for a given fleet, maintenance and repair costs can be compared with the industry standard of $1,010 to $1,390 of total annual repair cost per VEU. Many factors may influence this cost; chief among them are the number of vehicle equivalent units supported by each technician (100 to 125 expected), and the percentage of all repairs that are scheduled maintenance (66 percent expected) vs. unscheduled repairs.
Putting it all together
When evaluating a student transportation operation, it is important to understand the interdependencies of the indices used and appraise the program holistically. It is risky and misleading to focus exclusively on only a few performance indices. For instance, discovering that the utilized vehicle (run) capacity of the fleet is low, and correcting this by simply filling more seats may result in the unintended consequence of extending bus route times and in late arrivals at the schools they serve.
It is important to define the expected level of service, and to decide if these are appropriate to the core mission of the transportation program — to transport students safely to their destinations on time and in reasonable comfort. For example, it achieves nothing to reduce the training cost per FTE bus driver position below the level of peer districts, while increasing the number of preventable accidents above the average rate of 0.75 to 0.81 accidents per 100,000 miles of operation.
Initiating empirically derived operational performance measures requires a concerted upfront effort, but an established system can give superintendents, business managers and transportation professionals greater confidence in assessing the cost-effectiveness and quality of their transportation programs.
Forsyth has 30 years of fleet and student transportation experience and is vice president of Management Partnership Services, Inc., Cinnaminson, N.J., a national student transportation and fleet consulting firm.
$41,000 TO $43,000
Approximate annual cost per active (assigned) bus.
$1,010 TO $1,390
Industry standard total annual repair cost per vehicle equivalent unit (VEU).
0.75 TO 0.81
Average rate of accidents per 100,000 miles of operation.