Maintaining the Bus Industry in 2022
Learn about how big of a role the bus industry serves in our society and economy, and how it’s maintaining in 2022.
Episode 187: Busses play an integral role in our society and our economy. The trucking industry has received a lot of attention over the last 2-years but what about the bus industry?
My guest today is Peter Pantuso the President & CEO of the American Bus Association.
Guest Website: Buses.org
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Transcript of Episode:
Jamie Irvine:
You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keep trucks and trailers on the road longer while lowering cost-per mile. Buses play an integral role in our society and our economy. Over the last couple years, the trucking industry has received a lot of attention, but what about the bus industry? My guest today is Peter Pantuso the President and CEO of the American Bus Association. Peter, welcome to The Heavy-Duty Parts Report. So glad to have you here.
Peter Pantuso:
Absolutely thrilled to be with you. Thanks for including me.
Jamie Irvine:
So I was interested in talking to you about the bus industry for many reasons, but one thing I was curious about how many people use the bus every year?
Peter Pantuso:
You know, a lot more than people would believe. So prior to the pandemic, we were moving about 600 million passengers every single year. And to put that in perspective, North American domestic airlines move about 700 million. Our Amtrak system here in the states moves about 35 million. So we were, almost 20 times bigger than Amtrak and almost as big as the airlines, you know, we’ve had a downturn obviously in the industry, but we’re coming back strong.
Jamie Irvine:
Well, I’m glad to hear that. And yeah, that’s a number that I don’t think if you ask the average person, they would be able to guess even close to that. So I love to, look at things from the economic impact, you know, a lot of times on The Heavy-Duty Parts Report, we’re talking about the economic impact of buying high-quality parts versus low-quality parts, something like that. But if the bus industry just suddenly disappeared, what would be the economic impact to our economy and to our society?
Peter Pantuso:
Yeah. So the economic impact of the industry, you have to look at it in a couple of different ways. So first of all, you look at direct sales, if you will, of the motor coach industry or bus industry, the private bus industry. And it was about $15.3 billion prior to the pandemic. When you look at the direct impact in terms of what we buy, whether it’s tires, engines, buses, the jobs that we employ, the jobs and other industries, it’s about a $100 billion in economic impact. And then if you look at as well, the travel and tourism industry, and include that sector and look at the people that depend on the motor coach industry, the travel industry, and all the suppliers for their jobs, it’s about a $200 billion impact on the economy. So not only would that go away, but the other thing that would go away is the role that we play would be picked up by probably federally subsidized state, local subsidized transportation systems. And that’s even a bigger impact on top of what we would lose by us going away.
Jamie Irvine:
So sometimes people don’t see the bus industry, they don’t see the trucking industry, commercial equipment. It’s not part of their everyday experience. You know, they see them on the highways, but they don’t really grasp the role that it plays. And so thank you very much for summarizing that. You mentioned that things had declined because of the pandemic. I think obviously with people not moving in lockdowns, I can see that immediate, but maybe just go into a little more detail and exactly how the bus industry was impacted by the pandemic.
Peter Pantuso:
Sure. So I take a look at the bus industry really in kind of three segments if you will. I look at the, what I would call the scheduled service and that’s point to point or city to city. It could be, I’m in Washington DC. So it could be buses that go from DC to New York, could be buses that connect middle America with urban destinations. But that city to city are point to point. And then I look at another segment, a second segment, which would be commuter buses, and this is private commuters coming into town to work. It could be commuters going to the oil sands. It could be commuters going to logging operations or to mining operations, but typically, you know, it’s the day to day commuter who’s coming into work. And then the third segment, which is the largest segment is the charter segment.
You know, a bus that can be chartered to go anywhere, can work on a convention. It can be chartered by a tour planner. Who’s planning a trip across country for three weeks and needs a bus. So, you know, those are the three segments I look at. And then when I look at the impact, the first being the scheduled service sector, that sector like everybody else was hit very hard overall, if you will, you know the motor coach industry prior to the pandemic was doing $15.3 billion just in direct revenue. In 2020, we did about two and a half billion. So we lost about 80% of our revenue. Last year in 2021, we were at about seven and a half. So we’re still below 50% this year. We think we’re gonna be operating at about 60 to 70% of where we’d have been pre-pandemic.
And when I look at each one of those sectors, the scheduled service sector has come back to about 60 to 70% pre-pandemic. The commuter market is still way, way down. There’s a lot of places, a lot of cities here in Washington, DC’s a perfect example where government agencies aren’t open yet. And so people aren’t commuting into town every single day. And I’ll give you another example here in Maryland. Part of the DC Metro area, they have their own bus program. They charter buses from multiple companies to bring people in and out of the city to work. Prior to the pandemic they were moving15,000 a day. Today they’re moving 2,500 a day. So that’s how fewer commuters there are. Same thing in New York and other major cities, that segment’s operating at about 25% at best. And then the charter market is doing well right now. This is kind of peak season for a lot of charter companies. But we also are hearing that they’re soft in the summer and soft in the fall. So we think overall, the industry this year is gonna be between 60 and 70% capacity.
Jamie Irvine:
Are we going to get back to pre-pandemic levels in the future, or has things so fundamentally changed with people working from home and using digital technology that, like what are your thoughts on the long-term prognosis?
Peter Pantuso:
Yeah, I think, I think we’re gonna be back to a hundred percent in most of the industry, probably not the commuter market, because those commuters are never going back five days a week. I don’t think, you know, most of them are gonna be going back four days or three days. Well, that’s a 20 to 40% decline in that segment of the industry long term, but the other segments, yeah, they’ll be back. We think full recovery for the industry, you know, whatever the new full recovery is, is probably going to be somewhere end of 23 or into 24.
Jamie Irvine:
And one thing that I didn’t really think about before watching an interview you did on our friends over at the DL Podcast with Tyler Robertson was just the nature of the people who own the bus companies and kind of the legacy. Could you speak to that a little bit?
Peter Pantuso:
Yeah, absolutely. So this is an unbelievably great industry with multiple generations running some of these companies and the typical companies, probably not unlike a lot of trucking companies, but of the companies that remain, and we were about 3000 companies going into the pandemic, we’re about 1500 to 1800 now. So we’ve lost almost half the industry. But those companies are typically family businesses. I can literally count on probably two hands, the ones that aren’t. Many of the companies go back multiple generations. We’ve got companies that go back four or five generations, companies whose great, great, great, great, great grandfathers were running stage coaches, and obviously they put a motor in, it became a motor coach. And so a great legacy, just a great testament to the grit in this industry that they’re able to work that hard stick together. And those that have come out of the pandemic, I think will do very, very well in the future. But it’s a really wonderful industry. I’m blessed every day to know that I’m working for these folks.
Jamie Irvine:
We’re gonna take a quick break. We’ll be right back. Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket. We’re back from our break. And before the break, we were talking about the bus industry, the economic impact, the great legacy of the bus industry, really fascinating Peter to learn so much about it in such a short period of time. This is The Heavy-Duty Parts Report. We like to talk about maintenance and parts. When it comes to maintaining buses and bus maintenance in general, what kind of unique challenges are there with buses maybe you wouldn’t have on other commercial equipment?
Peter Pantuso:
Oh, great question. So, you know, one of the biggest differences is the size. Number one, right? So you take a truck typically, you’re relatively compact into that cab. Now you’ve got a bus that’s a long tube that needs to be air conditioned all the way down through, it needs to be heated. It needs to be lighted. You know, all of those factors, it has stereo systems in it, the air exchange systems to ensure that passengers are getting continually fresh moving air, especially during COVID and the challenges we face there. So those are some of the challenges of operating a bus. And then as an operator, obviously, you know, you’ve got 50 backseat drivers who are interested in where the bus is going and when are we gonna get there? You know, that’s hard enough for me driving, you know, when I’ve got somebody sitting next to me saying, when are we gonna get there, turn left, turn right. I can’t imagine doing it with 50 people.
Jamie Irvine:
I never even thought of that. Like for example, drivetrain, just the stress on the drivetrain because of how long the bus is versus a truck that only has maybe a tandem axle, it’d be a very, very different setup and a lot of different components. Speaking of parts though, has the bus industry experienced the same parts shortages that the rest of the trucking and commercial vehicle industry has experienced?
Peter Pantuso:
Yeah, they sure have. I talk to operators every single day who tell me, you know, that they would have more coaches out on the road running if they could get the parts that they needed. I mean, buses that are sitting and have been sitting for weeks on end because they can’t get the parts that they need. And obviously their suppliers are going through the same challenge, the manufacturers who many times have those parts or supply them, many of those are coming from overseas. So the supply chain has hit the industry very, very hard like everybody else.
Jamie Irvine:
Right. And expanding your supplier network is gonna be something that I think everybody should do, even if we you know, not if, even when we reach full recovery. I think we have to take some lessons away from this last couple years. And one thing that I don’t think most of us understood was how fragile our supply chain actually was. You know, I think we all thought it was very global and very robust, and it kind of shows us that we need to take maybe a different approach. One of the things that I find interesting about the bus market is, or the industry rather, you know, moving people is obvious, but speak to us a little bit about how much cargo and freight the bus industry moves.
Peter Pantuso:
In different parts of the country, it’s significant, right? So in a lot of rural parts of America where the bus is the only way to connect, people need parts. It’s a great way to get them there. Same day sometimes. Um, same thing in, in Canada and rural parts of Canada, we see where parts transportation are goods transportation via bus is a very big part of the industry and has been for a long, long time. And I think that will continue for some time. I mean, in other parts of the country, it’s really not as significant, especially, I’ll say here on the east coast where, you know, things are as compact and packed and you get pretty quickly from one place to another. But if there’s a farmer who needs a part, you know, in the middle of Iowa and that’s gotta come in from Chicago, gosh, you can get it down on a Greyhound, maybe connecting to a Trailways, maybe connecting to another bus and get it there same day or by the end of the day.
Jamie Irvine:
Yeah. That’s fascinating when it comes to electrification. This wasn’t in the outline, but I did think of it, our buses are kind of in the same situation as commercial trucks, like for example, if you have a commercial truck that’s at a port and has a dedicated route, or you’ve got a waste disposal vehicle that’s on a dedicated, maybe a hundred mile loop every day, it’s like a perfect application for electrification. Where is buses in comparison to the trucking industry, is it farther ahead with electrification? Is it behind?
Peter Pantuso:
When you talk about commercial buses or motor coaches? I would say we’re behind. And the reason being number one is the cost. It’s a, you know, a bus is a $500 to $600,000 vehicle as is. When you have an electric bus, it’s a million dollar plus vehicle. So, you know, finding somebody to pay for that or paying for it with increased rates or increased fees or ticketing prices, you know, in a market, that’s very sensitive to that. It’s gonna take a while to build it in. Now, we’re seeing, you know, in the transit market, in the school bus market with a lot of federal subsidies and a lot of state local subsidies, you know, that market is certainly moving quicker and you’re seeing, you know, those vehicles being converted to electric vehicles or being purchased as electric vehicles.
But that process is a lot slower in the motor coach industry and will be. The other challenge is the application, because as you point out, you know, if you’re running a bus, let’s say in a commuter environment where you’re going in and coming out every single day and you’re back in the same place, or the bus is sitting there for a period of time in between runs where it can be recharged. That’s a perfect opportunity. But if you are in the charter market and today that bus is going from, you know, Washington DC to New York city, but tomorrow it might be going to Niagara Falls. And the day after that, it might be, you know, on its way somewhere else, knowing number one, that the infrastructure is available. All those locations is the first process. The other piece is the amount of space the batteries take up. They take up, you know, as much as two of the three baggage bays. And so if you’re on a long distance bus, you need luggage and you can’t very well say to the consumer, listen, we’d love to have you, it’s brand new electric bus, but you’re gonna have to leave your luggage at home. We don’t know what you’re gonna do.
Jamie Irvine:
And we’re gonna charge you double.
Peter Pantuso:
Exactly that. So that becomes a bit of a challenge obviously, but yeah, in those applications, you know, commuters where you don’t have luggage, or you have a limited amount typically, that works perfect. And obviously long-term, you know, we’re gonna be there, whether it’s hydrogen, whether it’s electric, the whole industry, the whole transportation market is gonna move that way. You know, the infrastructure’s far from being able to support, certainly I don’t know about trucks, but motor coaches right now, a bus that needs to be fully charged, it’s gonna take six or seven hours. So again, in a long distance application, you know, when the passengers are going from, from A to B, you can’t really say, oh, we’re gonna be a little bit delayed for the next six hours, cuz we gotta charge the bus.
Jamie Irvine:
So when I was a young man, trying to decide what I was gonna do for a career, I was going to school with a lot of people and pretty much everyone in my age group was getting into computer science. And I remember thinking about supply and demand because I loved economics. And I remember thinking if everybody I know and everybody they know in our age bracket is all gonna get into computer science. There’s gonna be a supply and demand issue on the other end where there’s gonna be too many people and maybe not enough demand. Now, maybe I was off on that and I didn’t fully understand how monumentally huge the computer side of and technology was going to be. But when you’re talking to young people and you’re encouraging them to join the bus industry, to me, that’s got to be almost a wide open industry where not a lot of youth would think of that. Even their parents wouldn’t think of that as being a place where there’s opportunity. Like let’s talk a little bit about getting people into these great niches within the commercial vehicle industry.
Peter Pantuso:
Yeah, you’re absolutely right. And so many opportunities, you know, we have here at the association, a foundation, we award 20 scholarships a year to encourage people to come into the industry, not just the bus industry, but travel, tour on the equipment side or maintenance side as well. We’ve got scholarships for that, but it’s not something that readily comes to mind. People don’t think of the bus or bus driving or maintenance necessarily as a career, but it’s an absolutely fantastic career. I mean, we’ve got, you know, we’ve got drivers that are getting paid $60, $70, $80,000. Right now we’ve got mechanics making the same kind of money. I mean, there are drivers in the industry who are making over a hundred thousand dollars driving bus and then there’s all the back-end support, the computer technology that you need to be able to run the office to be able to do, you know, have booking systems and scheduling systems there. And you know, the marketing personnel, all those other disciplines are required to run a bus company. And you’re right. It certainly when I was going to school, you know, the counselor didn’t say here’s an option for you. But we try to encourage people to think about that as a really great career, not just a job, but a career.
Jamie Irvine:
Yeah. I love the expression. The riches are in the niches, so there’s so much competition for healthcare and for some of the IT kind of jobs and stuff, and it just seems so wide open and yet so few young people are even aware of it. So we’ve got to do our part to raise awareness. Let’s just end on this one thing. What’s one thing you want people to remember from our today?
Peter Pantuso:
Well, I remember, I think first of all, the size, the scope of the industry, again, the fact that, you know, we were moving almost 600 million passengers. The other piece being that we are the most environmentally friendly form of transportation. So as we hear here in the states, our administration talking about getting people off the roads, infrastructure, moving people efficiently, making sure that we reduce our environmental footprint and now, especially, with the cost of fuel, the bus is the perfect solution to that. We every couple of years we take a look at government data and we look at the output of NOx and carbon dioxide emissions. And when you look at it, the motor coach is by far the lowest on a per person basis. So, you know, I saw something just the other day, it was talking about people who aren’t willing to travel as much this year because of the high cost of fuel or because of the environmental impact of driving, but get on the bus. I mean, that’s the solution almost immediately.
Jamie Irvine:
You’ve been listening to The Heavy-Duty Parts Report. I’m your host Jamie Irvine. We’ve been speaking with Peter, who is the President and CEO of the American Bus Association. To learn more about the American Bus Association, visit buses.org, links are in the show notes. Peter, thank you so much for being on The Heavy-Duty Parts Report. I’m so glad to have you here.
Peter Pantuso:
Thanks for having me.
