Prepared remarks
Good morning, ladies and gentlemen, and welcome to the U-Haul Holding Company Second Quarter Fiscal 2026 Investor Conference Call. This call is being recorded on Thursday, November 6, 2025. I would now like to turn the conference over to Sebastien Reyes. Please go ahead.
Good morning, and thank you for joining us today. Welcome to the U-Haul Holding Company Second Quarter 2026 Investor Call. Before we begin, I'd like to remind everyone that certain of the statements during this call, including, without limitation, statements regarding revenue, expenses, income, and general growth of our business may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-Q for the quarter ended September 30, 2025, which is on file with the U.S. Securities and Exchange Commission. I will now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company.
Thank you, Sebastien. The earnings crush of increased depreciation and change from booking gains on equipment sales to booking losses on equipment sales became evident this quarter. We reported this over 2 years ago that we were having to pay too much for trucks. This pounding is likely to continue for some time as OEM manufacturers continue to bring current pricing in line, and resale values will likely decline roughly proportionately. While I'm glad to bring on new vehicles at lower cost, this likely will depress earnings in the current period. Since July, we have been working to expand our dealer network well above the historical pace. This should help us better balance truck and trailer inventories by increasing demand. I expect some success here. We spent more on repair in the quarter than I had anticipated. We are working on a plan to slightly reel these repair cost increases. As you all know, our customers drive the equivalent to the moon and back more than 12 times a day, so repair or maintenance will always be a significant cost.
Mileage, however, is not up, so we can reel this expense back a bit. Self-storage is a positive, but it remains a slugfest. Not many gains are coming easily even on good projects. I am focused more on expanding our footprint than increasing our depth. Competition is strong. Customers are value conscious. That is an environment that U-Haul usually competes in well. Self-storage is still viewed positively by lenders, which is encouraging new competitors to enter in some markets. The administration is having success in reducing ICE regulations that have driven unnecessary dislocations in the transportation economy. It has long been a dirty little secret that these regulations are politically and not environmentally driven. As the unproductive regulations on vehicle manufacturers and users subside, I expect a reordering that will benefit citizens and businesses alike. This is very positive for the transportation economy, although the transportation economy overall will have to absorb some huge residual costs from the conceived green regulation.
In summary, our various business lines are solid and our results have covered a lot of expenses but are short in return to shareholders. I will now turn the meeting over to Jason to closely review the financial results.
Thanks, Joe. Yesterday, we reported second quarter earnings of $106 million, which is compared to $187 million for the same quarter last year. This is a $0.54 per nonvoting share EPS number this quarter compared to $0.96 per share nonvoting share in the second quarter of last year. Earnings before interest, taxes, and depreciation, what we're calling adjusted EBITDA at our Moving and Storage segment increased 6% or nearly $32 million for the quarter. This is about the same amount of improvement that we saw in the first quarter of this year. Revenue growth across all of our Moving and Storage product lines led to this increase. Included in our earnings release and financial supplement is a reconciliation of adjusted EBITDA to GAAP earnings. Once again, this quarter, the largest difference between adjusted EBITDA and GAAP earnings is depreciation, and that's also the cause of the largest negative variance in earnings year-over-year.
During the second quarter of this year, we reported a $38 million loss on the disposal of retired rental equipment, whereas last year at this time, we reported an $18 million gain. Cargo vans that we purchased over the last 2 years that are now being sold came into the fleet with a higher cost and the current market resale values are not reflecting that, resulting in the loss. We have increased the pace of depreciation on the remaining units to reflect this new reality. Additionally, we have depreciation from increasing the size of the box truck fleet by approximately 10,000 units compared to September of last year. Between fleet depreciation and the loss on disposal, we experienced $107 million cost increase for the quarter compared to the same time last year, which translated to EPS that's about $0.43 a share. As a reminder, our total decline in earnings per share for the quarter was $0.42.
For the second quarter, our equipment rental revenue results had a $23 million increase, which is about 2%. Revenue per transaction increased for both our in-town and one-way markets compared to the same time last year. There was a decrease in overall transactions. In a move intended to improve customer convenience, we're increasing the number of independent dealer locations across our network. In the last 12 months, we've added nearly 1,000 new locations. In fact, for the first time in our history, we have eclipsed the 25,000 location count, and the plan is to continue adding. This, in conjunction with the increase in the size of our truck fleet, leads us to believe there's an opportunity to grow moving transactions. October results came in below trend, and we're working for an improved November. Capital expenditures for new rental equipment for the first 6 months of this year were $1.325 billion, which is up $169 million compared to last year.
For the last 12 months, so the trailing 12 months, our gross fleet spend has been approximately $2.032 billion. If you net out equipment sales, it was $1.358 billion. I estimate that close to $640 million of the growth spending was growth-related. We had another strong quarter for self-storage. Storage revenues were up nearly $22 million, which is about 10%. Average revenue per foot continued to improve across the entire portfolio by just under 5%, while same-store was up about 4%. We are seeing the cumulative effects of our rate increases flowing through to revenue. Our same-store occupancy decreased by 350 basis points in the quarter to 90.5%. As I mentioned last quarter, in July, we took on an effort system-wide to increase the number of available units at our existing locations by focusing on delinquent units. This effort did not affect revenue directly as we don't record revenue until it's collected, but it did have the effect of reducing our reported occupancy levels for now.
Of that 350 basis point decline in same-store occupancy, about 220 basis points of that was related to the removal of delinquent tenants. Net tenant move-ins, while slower than recent years, has picked up compared to where we were last year adjusted for delinquent units. During the first 6 months of fiscal 2026, we invested $526 million in real estate acquisitions along with self-storage and U-Box warehouse development. That is down $208 million over the first 6 months compared to last year's first 6 months. During the second quarter, we added 23 locations with storage that translated to about 1.6 million new net rentable square feet, and we currently have 6.5 million square feet being actively developed across 116 projects. Our U-Box revenue results are included in other revenue in our 10-Q filing. This line item increased $12 million, of which U-Box was a large part. We continue to have success increasing moving transactions as well as increasing the number of containers that our customers keep in storage, although the pace of growth for both slowed in the quarter.
Moving and Storage operating expenses were up $19 million for the second quarter. As a percent of revenue, we improved compared to the second quarter of last year. The largest component of the increase was personnel, which was up $12 million, but that increased at about the same rate as revenue increase. Our liability costs associated with the fleet were up $23 million and fleet repair and maintenance, as Joe mentioned, was up $10 million. Regarding the liability costs, we've made progress on the self-insurance reserves for Moving and Storage. Over the last 6 months, we've increased our liability by $43 million. As of September 2025, cash along with availability from existing loan facilities at our Moving and Storage segment totaled $1.376 billion. Supplemental financial information as of the end of September is available at our investor website, investors.uhaul.com, under what we call Investor kit. With that, I would like to hand the call back to our operator, Angeline, to begin the question-and-answer portion of the call.
Questions and answers
Your first question comes from Stephen Ralston with Zacks.
I want to focus on the big picture rather than the details. Congratulations on achieving a record top line for any quarter in the company’s history. While the second fiscal quarter is typically your strongest, it’s still an impressive accomplishment. Now, regarding the specifics, we all recognize that depreciation expenses have recently affected the top line. I'd like to begin by clarifying your approach to depreciation. You've indicated in the past that you use accelerated depreciation, but I've observed that depreciation sometimes peaks in your seasonally high quarters. Can you explain whether usage plays a role in your depreciation scheduling?
Steven, this is Jason. For our rental fleet, we have two basic methodologies for depreciation. The first would be for our box trucks. And that's a dynamic depreciation model that depreciates faster in the earlier years and then slows down over time. We hold those assets generally 12 to 15 years, and that schedule has not changed. But it can result — if you have uneven purchases of box trucks, you can have that number either go up or down in a year. The second part of the fleet is our cargo vans and pickups, which we hold anywhere from 12 to 24 months. That's a straight-line method that is a little more responsive to what the resale market is because we sell them so much quicker. So what we're seeing today is a cargo van that would have depreciated at a certain level 3 years ago is now depreciating 2 to 3 times that rate per month because of what we're seeing in the resale market.
When do you expect the depreciation expenses to peak on a quarterly basis? You have better insight into what your anticipated expenses are for purchases and also the pricing.
So again, I’ll look at it in two components. On the box truck fleet, I think our initial look into next year is we're going to be buying fewer of those trucks. I would expect the box truck depreciation to peak towards the end of this year, beginning of next year and then start to trend down. On the cargo vans, whereas the price that we're looking to pay for model year '26 cargo vans is going to be coming down, that's going to be dependent upon the resale market, and that's tough to judge right now. I’d like to think that we're peaking by the end of this year, and then it should maybe flatten out and start to come down. We are not increasing the size of that part of the fleet. So at least the total number of units subject to additional depreciation isn't growing.
I want to add that the question is whether you take the hit every month or when you sell the vehicle. It's somewhat uncertain. We will regularly review this and make adjustments as needed because that's how it goes. We aim for a reasonable rate of depreciation. However, over the past 18 months, it has become evident that depreciation has been much higher. When I analyze this number, I consider both depreciation and loss on sale to determine the peak. This is challenging for us to predict. In my personal view, I believe we're about a year away from the peak for pickups and vans. A lot of this depends on the pricing of new vehicles, as the used vehicle market reflects that. If new vehicle prices decrease, it could influence our depreciation assumptions.
A little harder question is, could you anticipate what level of depreciation is going to be at the next trough? In the beginning of the 2000s, actually pre-COVID, your level of depreciation on an annual basis was about $600 million. And during COVID, because you weren't buying as many vehicles as you wanted, it dropped below $500 million for 2 years. Now we're at a run rate of basically $1.1 billion of depreciation. If you could get back to a trough of $600 million, the earnings this quarter would have tripled from what you reported. That's how much of an effect this has. Given this run rate of over $1 billion in depreciation, at some point, it should peak and then trough out. Do you have any idea where that trough would be in dollar-wise?
This is Jason. From when we went into COVID to where we're at today, the fleet is at least 20,000 units larger and the trucks are costing more. Those are the two factors that are pushing the annual depreciation number up. If we were ever to get to a point where we bought the same number of trucks every year, our maintenance CapEx number would end up becoming our depreciation number over time. Going into COVID, I was quoting around $600 million in depreciation for the trucks at least, not including trailers or the U-Box containers. Where we should end up is going to be much closer, hovering around the $700 million to $750 million range, I would think, at a normalized number, given the size of the fleet today.
That's very helpful. Last question on a completely different topic. I've noticed on social media, I've seen a lot of clips concerning some of your employees talking about day-to-day operations and innovations and equipment design. Is that a new effort of yours? Or have I just been missing it prior to this?
This is Sebastien. I think what you might be seeing a lot of is around our toy hauler, Steven. Yes, and that's a real exciting opportunity for us. We've had a lot of really great pickup on that from very big automotive publications. I think it's a market that we weren't serving as well as we could have before and is just a natural extension of 80 years of being in the trailer business. There's a lot of excitement around that. I think the public is starting to realize that as well.
The next question comes from Steven Ramsey with Thompson Research.
I wanted to ask a couple of questions on growing the dealer network. You're optimistic about that effort. Can you share some of the reasons why you're optimistic? And what is the timeline for gaining momentum on this effort as far as driving more moving transactions?
This is Joe. I'll speak to it. I expect to see visible numbers by May, maybe before then; it depends on how well I can get the organization to perform. Always you're looking at market penetration. When I segment out market penetration across various markets, I continue to see areas where we're lagging our own performance. I don't believe that the market is that different or the potential is that much different in one market or another, so let's say, eliminating Manhattan and places like that. Going to more communities, Denver, Phoenix, there's substantial opportunity for increased penetration, and dealers are our most effective way to enter that. Over the last 30 years, dealers have hovered just under half of our truck and trailer rental revenue. Today, they're running maybe three percentage points below where they've been running. I think we've got it out of kilter by about that much. Now nothing is certain, but I have significant indicators that tell me we've neglected this.
I believe there’s a nice increase here. We're a little bit over-fleeted right now, which is why Jason reports we have a little bit lower utilization. I have equipment I can allocate, which is a big opportunity. If I can't do this, then Jason and other people in the company will insist we squeeze the fleet down a little bit in order to increase utilization. They'll be opposite forces. I believe there's significant room in market penetration, and that's what I'm driving on. We should see results by June, I believe. I’ll see them sooner than that because I’ll see different numbers than you see, but I believe by then, we should see some results.
That's helpful color. Maybe thinking even further out than this — on this effort to grow the dealer network, can you talk about the long-term insights or goals as far as creating new owned U-Haul locations and the potential benefits of more U-Box warehouses in these markets? If this were to come about, is this something two years out, four years out if this comes to fruition?
I've been steadily driving the whole company — not just me, the whole company has been steadily driving on increasing our storage and U-Box footprint quicker than our U-Move footprint. To justify a big company-owned operation, you have to bring in a fair amount of revenue; that may not be available in markets with plenty of U-Box and new store business. Of the stores that we've opened in the last few years, nearly all of them are going to generate more self-storage revenue than truck and trailer rental revenue. I think that pattern will continue.
Okay, that's helpful. Then you've talked about, as you described, the slugfest in storage. Would you say that the competitive intensity there is equal to what it has been? Or is it intensifying further? And what are you looking for to show this is evolving to be a bit more healthy competitive environment than it has been in this recent period?
Jason always brings me move-in, move-out rental rates for our competition. Their move-in rental rates are massively below their move-out rates, which means they're bringing you in on a little bit of an overzealous discount and then cranking the rate up. My experience is that offends a lot of customers. They would rather just be told about what it's going to cost them, and then they'll figure it into their budget. This causes our people at the point of sale to quote a first, say, three or four months rental rate that's going to be higher than what the competition is going to quote, and 30% would not be a big gap. I've seen 50% gaps. This is foolish. It sets up an expectation of the customer that we can't provide the product at those low rates; it's not economical for anyone. So our competition, primarily the big REITs, are dead set on that pricing mechanism. We're just going to be in a slugfest.
But overall, I think relatively, we're coming out well. It’s a tough thing to know because everybody does their information a little bit differently. But I think we're coming out well overall, and I see a lot of runway ahead of us. As I said in my prepared comments, we're focusing a bit more on breadth of coverage than depth, where I think due to their management structure, many of our REIT competitors are focusing more on depth of coverage rather than breadth because we've already been in all these markets due to truck and trailer rental. I like a little differentiation.
Okay, that's helpful. And then last quick one for me. I know your activity in Moving and Storage is generally tied to overall economic activity and life events. But in this time period, with existing home sales being so depressed, I'm curious if you think in a recovery scenario on existing home sales if that would be a wave that would lift the growth of one-way moves and lift new box growth even further, maybe just the general linkage of one-way moves and U-Box to existing home sales?
I don't think it will be enough of a boost that you'll be able to see it. No doubt, there's some boost there, but the transaction volume it takes to move that is pretty significant. There's been a lot of consumer confusion or uncertainty. As that becomes stable, my experience has been that we see a little more one-way rentals and a little bit longer one-way rentals, and we're not seeing that presently. This is a pattern I've seen three, maybe four times in my career. I don't have a good way to estimate how long this will continue, but this has been a trend for a little while now. We saw just the opposite during COVID; we had a little longer rental and a little more percentage of one-ways because people were eager to move. So no, I don't think that home sales are going to be a good predictor for rental activity.
The next question comes from Andy Liu with Wolfe Research.
I appreciate a lot of the color around the depreciation here. I want to focus more on kind of like the cash side, right? So thinking through your comments about input costs being higher to get the new trucks in the secondhand market not catching up to that. I wonder, from a capital allocation standpoint, how do the returns there compare to money spent elsewhere, for example, on the storage side, where you previously called out a 10% yield on this? How do you think about deploying capital?
I want to say one cautionary note, and that is what is the business cycle? The problem with — not the problem, but part of what you have to look at with the truck is that it's a little bit longer asset than many people think, and certainly, storage is. So with that, I'll let Jason speak to it.
I was going to say about the same thing. Comparatively speaking, where costs are at and where revenue is at today, the return on trucks has directionally gone down from where it used to be. It's a combined product offering for us. There were times when storage wasn't returning quite as well and the trucks and trailers carried the day for us. We’re not going to adjust the long-term strategy of the company because of just the current cost structure for a few years, but we do have some work to get out of this cycle.
Okay, yes, I totally hear you on that point. So double-clicking on the moving side of the business. You mentioned that the transaction volume side has been coming down. I'm just curious how that has trended through the quarter? On a year-over-year basis, has the year-over-year trend for, say, July to September been roughly the same through the three months? Or have things been trending better or worse throughout the quarter? I just want to get a sense of — I get that the quarter is down, but just wondering how that trended? Is it sequentially improving through the quarter? Or is it about the same through the three months?
Yes, on transactions, we will have a good month, and then we kind of recede a little bit. I think the fourth quarter of last year, the first quarter of this year, that six-month period, we had started to trend up in transactions. This quarter, we took a little bit of a step back. We saw a little bit more of that same sort of trend in October. It's been tough to get the transaction number to turn.
Got it. That's helpful. And then my last question, kind of shifting to the storage side. I know you called out last quarter that you were working through getting some tenants out who weren't paying. Is that — have you guys gone through the bulk of that, so you're set up to backfill those spaces and get occupancy up? Or is there still a good amount of addition that you guys have to do on the storage front?
Yes, this is Joe. We're through that, and we're now in the cycle of where I want us to be, which is to re-rent those rooms all to paying customers. We're making some gains. Of course, going into fall is the wrong time to execute this maneuver because overall demand isn't as strong as it is in spring. Seeing gains right now, I think we did the right thing. Overall, revenue is up. If you measure money, which a lot of us do, the money is working out correctly. This also psychologically opens up more opportunity for my managers, which I think will have a subtle but very positive effect as we come into spring. The winter is always a little bit goofy; it's always down a little bit but sometimes not as much. We’re going to continue to drive on this, and I think we’re through it. Yes, it was the right move, and now the question is how fast can we increase rents?
The next question comes from Jeff Kauffman with Vertical Research Partners.
A number of my questions have been asked, so I’m going to just kind of go in a different direction. I know you buy most of your vehicles domestically, Ford and General Motors, but have you seen any impact to vehicle prices or vehicle costs from the tariffs that are out there?
I'll try this. We buy some Stellantis vans that are assembled in Mexico. We buy some General Motors products that are assembled in Mexico or final assembly, but these parts come from all over the planet. They're who we thought we would see the worst impact from tariffs. So far, they've been picking their way through that minefield successfully, be what I would say. In other words, when it reflects down to us, and we see the net cost, they're still not clear out of the ballpark. Going in, we thought we might see the GM product built in Mexico be 15% or 20% non-competitive. We're not seeing that presently. It's — I don't know how the numbers are working on their end. Ford has a little advantage here; they advertise that. They have higher domestic content and are a little less influenced. But here again, some of their raw materials come through this foreign supply chain, and it’s very complex. In speaking with people, they all are dreading it, but none of them have something they can make stick with the end user, if that makes sense. This could change as time goes on. I’m sure they all hedge stuff and did a whole bunch of things. We’re kind of living on that right now.
Now does this show up primarily in the cost of your vehicle purchases and CapEx? Or do some of this show up in repair and maintenance costs for you?
It's going to be primarily in new vehicle costs. Although parts prices are going up, that's just a fact of life. Many of these components — let's pick an alternator. Many of those are made non-domestically. They're sourced nondomestically. They will encounter some tariff difficulties. In the big number, it's not showing up yet, but everybody in the purchasing end of this is very wary and constantly trying to find some way to wiggle and hold prices longer. We put a lot of pressure on suppliers to hold prices. A lot of them are hedging their situation and have kept the price increases way below what's been quoted on tariffs at 20% and 25%. We're not seeing that come through. Jason, do you want to address that?
No, I haven’t seen that either.
The next question comes from Jamie Wilen with Wilen Management.
I just want to touch base on U-Box a little bit. First, when does it come to the point in time where it has to be its own segment? I thought it was 10% of revenues. I think we're approaching that. But can you discuss U-Box's positioning? The revenue growth in U-Box is far greater than the rest of the company. What are the dynamics there that are causing U-Box to have such large increases? And are they gaining market share? Lastly, as their revenues increase, should they reach an inflection point on operating profitability?
Jamie, this is Sam Shoen. Can you repeat the last part of your question one more time?
As revenues are gaining and growing in U-Box, is there an inflection point where profitability dynamically moves forward?
Got it. I'll let Jason answer that last part, but I'll just touch on some general U-Box subjects. It's good to hear from you. Thanks for the questions. As you noted, we continue to find success in U-Box. We had a very hot summer and then ended the quarter with a little bit of a whimper. Compared to the same period last year, we had increases on a percentage basis and gross basis as well in all our big revenue components of U-Box, including shipping income, storage rent, and delivery income. Those are the real drivers for U-Box revenue. When you think about U-Box expenses, freight is where you need to focus on. Those are under control. Assets are not a limitation right now; we have plenty of containers, warehouse space, and delivery equipment. U-Box is a hard work business just like the rest of U-Haul; we’re poised for it to be an exciting cornerstone of the future. Does that help?
Yes. Do you see us gaining market share? Are we having a greater percentage of the business overall? Or is the market for that type of moving growing significantly as well?
No, we're gaining market share. We’re targeting to become the market leader. There’s no doubt — you talk to anybody in the competition, we’re making their life a living hell. We are gaining market share unquestioningly.
Living hell is good. As far as the profitability inflection point?
Jamie, this is Jason. The interesting thing about U-Box is it has the profitability profile of both U-Move and U-Store. Over the years, Sam has made great strides in the logistics side of the business and locking down those costs. I think we're at a good margin level there on getting boxes from one city to another through either carriers or direct delivery by our customers. The remaining piece of the puzzle where we can really take off is getting more of these boxes in storage. Our overall occupancy in our facilities is a fraction of where we're at with the self-storage product. There’s a big upside there. On a quarter-to-quarter basis, we typically stay within a couple of percentage points of the overall Moving and Storage margin. The more boxes we fill, just like the more storage rooms we fill, our margin profile is going to increase.
Okay. And does the length of time that new boxes are in storage, has that changed at all over the last year or two?
No. Generally, it’s very similar to what we’re seeing in traditional storage, which I think is positive.
Good. Last question about capital allocation. We’re still having a whole bunch of self-storage, which does not contribute to profitability for a while. Do you ever think of selling off a bit of the self-storage that might not be in our target markets and not in our larger areas, so we can sell those off at full price to increase where we do have some market strength and get some greater synergies?
With very few exceptions, the answer is no, partially because our existing footprint is — we’re strong in Wyoming and North Dakota. Compared to Public, they’re not motivated in those two states because they don't have operations. For them to initiate anything, they have to make a big push. They might eventually make that push, but they have different priorities. We have some locations that we’ve bought from either Public or Extra Space because they were fringe for their way of looking at the market, but not so fringe for us. I don’t think that's a strategy we can go toward right now. Typically, those locations have a decent return. They're not disadvantaged. If you get a lower rate, typically, you have a little lower going-in cost, which is typical of existing storage. The new construction is where you will be in nowhere and it costs about the same as the construction costs in every metro area. On existing storage, you don’t end up paying a massive premium.
I guess the question is if Public Storage wanted to go into Wyoming, wouldn't it be to their advantage to buy a leading participant in the market and pay full price to get there?
Yes, that's what they will do. They will do that. You can count on that happening. I don't — they don't share anything with me, obviously, but...
But it would seem like a logical thing that if we could get full price for a state or two and then utilize those funds to enter areas where we could get greater returns by selling at high prices and buying low?
My experience is that it doesn't work that way. You have to adjust for the size of the locations. Smaller locations have marginally less contribution just because it’s nature of rents. But if the locations are similarly sized, my experience is that we will do as well in Wyoming as we will in California. Sometimes, we’ll even do better in Wyoming than California because storage is so hot; even tertiary markets in California provide strong prices for the sale market. I’m sure 1,000 places a year come in front of me for Jason and our real estate team. You can kind of get a feel for these trends. I don’t think there’s an opportunity to sell in those areas and reinvest in more densely populated areas. I don't think that'd be a good investment.
Last self-storage question. People have talked about the overbuilding of self-storage over time, yet our revenues per foot are up nicely in this past quarter. How do you explain that we're able to do this in a market that's theoretically saturated?
A great deal of it has to do with how well you manage at that level. I was in a store the other day, and of course, we're doing trucks in storage, and in walks a customer with a Starbucks and hands it to my manager — I think, what the hell is that? So I asked. She said, 'Well, that person is a storage customer; she brings me Starbucks every morning.' That costs more than the storage room. So obviously, there's more going on than just renting the room. They have a personal relationship. I'd like to say that people rent storage from other people and they rent trucks from companies, which is not 100% true, but more true than false. As we get a better quality manager, which is essential, we’re able to squeeze a little more rate out. We do a decent job of surveilling rates on a repetitive basis, sorting where rate opportunities are. We essentially never do an across-the-board rate increase. It's always very specific to the size of the storage room or type of storage room. If you keep at that regularly, you’ll sort to what the optimum price you can get in that market. I’m proud that we’ve been able to get increases — the storage industry has struggled with increases lately. We’re able to get them, but they’re hard thought. But I think we are in a good position.
The next question comes from Stephen Farrell with Oppenheimer Close.
I just have a quick question about the box trucks. Have you seen any relief in the pricing from manufacturers yet?
This is Jason. On the box trucks, the percentage increase over the last couple of years has been a little more sedate than what we’ve seen on the pickups and cargo vans. That’s really where the more material issue has been. We’re seeing some relief on those. If you were to take the 10-year average of inflation on those units pre-COVID to today, I would say that they’re still $3,000 to $3,500 more expensive than they would have been had we never gone through this inflation cycle. The box trucks are — don’t get me wrong, they’re still up, but maybe it would go from a 4% average annual increase to maybe 7% to 8%.
I’ll give a slightly different answer to that question, which is that Ford and General Motors, our primary suppliers, have to be set with costs that are staggering as they’ve attempted to adjust to a political agenda that didn’t match the realities of the marketplace. They’ve committed numerous billions of dollars and disrupted countless supply lines, laid off tens of thousands of internal combustion engineers. They’ve been attempting to recover those losses on customers. They have now done an about-face. I think you can see that over the last six months. Even Mary Barra now recants this stuff. It’s been a political agenda all along and not a manufacturing agenda, but they’re stuck — but they need to build things for profit. They’ve had to overspend and overinvest and are looking for ways to lay these costs out on their customers. If you look at this over a 30-year cycle, we could go to the manufacturer and say, 'Hey, you want to complete a second shift, we can buy so many units, and we can all talk reasonably.' They’ve been precluded from doing that. They’ve shown a willingness to lets all figure out how a bunch of us can profit as they back away from these unwanted costs.
And given that they moved away from ICE vehicles, how long do you think it would take for them to pivot back and increase supply?
They're already there in many models, and they're going absolutely as fast as they can to make it happen because they’ve now admitted internally. This was not a customer-driven agenda. In capitalism, ultimately, the customer drives the market, and they are driving away from it on anything that’s a utility vehicle. On passenger cars, I have no comment. I don't keep track of them, but apparently, electrics are very successful there. In utility vehicles, it has been a total nonstarter and has been for a long time — it’s a dirty little secret, as I said. No one wanted to raise their hand due to political repercussions, but the cat is out of the bag now, and I think people will speak freely about it. I won’t be the only person in a transportation company to express the same thoughts.
And just with moving, the competitors are facing the same problems that you guys are having regarding the increased cost of new vehicles. You were in a better position before the costs went up. Do you think that’s led them to sort of cut prices and keep utilization high?
No. I’m doing a round of that in the middle of one right now, trying to ascertain what’s really being priced in the market. We’ve seen some discounting, but there’s always some discounting. When we do a price check, we don’t just survey the computer to see what they’re pricing; we attempt to go hard as a customer and see if we can beat them on price. They’re a little bit flexible. So far, my experience is they’re still higher than us, so the consumer, in most applications, will find us to be very competitive, not in all applications.
And year-over-year, I know that fleet maintenance was up $10 million in the quarter compared to last year. Operating expenses were up about $50 million, I think. I know that you had greater insurance and liability expenses in the last two years. Are those still big drivers of the increase? Or has that leveled off?
For the 6 months, personnel was up about $32 million; repair and maintenance, $15 million; and liability costs, $40 million. Yes, those are still the largest components — those three. Everything else is on a much smaller scale.
There are no further questions at this time. I will now turn the call over back to the management for closing remarks. Please go ahead.
We look forward to speaking with everyone for our next quarterly earnings call that will be in February. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.