But now they’re actually cranking this, and it’s going to affect places because it does. There’s different cost of living, and maybe that makes sense in San Francisco. It’s not going to make quite as much sense in Alabama, but it’ll carry through. So there’s a lot of this that’s just going on that’s pure inflationary, driven by legislation. And we’re going to deal with it. We have initiatives all the time, which, what I call productivity enhancing initiatives, which is an attempt to get a process to accomplish a task instead of a human. And we have made huge gains on that, but not enough to totally outweigh increased personnel costs. So we’re still chasing it in my judgment. We’re in the midst of a big revamp, which will probably take three years on our whole point of sale orientation, but the net effect will be to have customers do more self service basically.
We get a lot of self service. We’ve quoted you before, I think, Sebastian, you press released recently, but we’ve done more than $5 million, what we call 24/7 truck rentals where the customer is self dispatched and self returned, where before it would have been somebody on our payroll or one of our dealers because it affects them equally. We would have had to accomplish that. The customer accomplishes that. That’s a net savings for everyone. So long as the customer is good to go on it. Everybody saves buck. We’re focused on this. I keep thinking that we’ve gotten everything we can and then I find something else we’re doing that’s kind of ignorant. If you put it under a comprehensive review, okay, we can quit doing this or we can change how we do this and stabilize the personnel input without increasing a technology input a greater amount than we reduce the personnel.
That’s going on all the time. But we’ve been chasing it. We haven’t been leading it.
Craig Inman: Okay, but the cost base where it is. Joe, you’re not thinking, this is way out of line and we need to take action yet. Those are just the ongoing pressures.
Joe Shoen: Yes. So you’re talking to – we want to decimate the ranks. There’s no reason to decimate the ranks. You will lose business if you decimate the ranks. We run our own call centers. Can we tune that up? Oh hell, we’ve tuned it up a bunch over the last 12 months. Ratio of people to calls to reservations, we’ve tuned it up a bunch and we are continuing to do that and I expect to see double-digit increases in our productivity in that area alone this year. But at the end of the day, it’s really a vehicle. You really do have to clean it when it comes back. You really have to. We got customers parking vehicles and a lot of them are damn happy to do that, okay? We tell them exactly where to put it electronically and they put it there.
So we had zero of that business five years ago. Today, we have a considerable amount of that business. Every time I get a customer to do that, they experience no waiting in line and our personnel experienced less physical work. So we’re very, very focused on that. But again, on balance, we’re chasing it not leading it. I would wish I could report we’re ahead of it. And that – it hasn’t happened, but we’re hard on it. And I would say, compared to our peer group, we’re at or ahead I think both in the self storage and the self move industry on this. We do a tremendous amount of customer self move ins and outs in self storage. Now we don’t call that contactless or unmanned, but it’s a version of that. Every time you get the customer to do something.
If the customer considers it in their best interest. We all benefit. And so we are in the do it yourself businesses, both our self storage and our self movement to do it yourself deal. And so most of our customers are willing to balance out. They do a little bit of effort, and we reciprocate in some way with them. They call that a fair trade.
Craig Inman: Got you. Yes, that makes sense. And then just – I know I’ve asked this before, so household formation, existing home sales, obviously all weak, but what you’re saying and the data continues to indicate is U-Haul’s transactions are more tied to the consumer and just general economic activity, consumer confidence versus the housing market being a big driver here.
Jason Berg: This is Jason. I was excited to see the last couple of reports on consumer confidence that should based upon we’ve seen historically, that that should be a positive indicator for us. And it’s not a great correlation, but it’s the closest correlation we found. So I think that can’t hurt. And as far as the housing market goes, if that opens up, it can’t hurt us. It can only really help us. So on those fronts, I think we’re looking at a couple of potential tailwinds here.
Craig Inman: But it’s not the – you can’t put your finger on and say, yes, it’s clear that housing starts moving up and down, just has a big driver to the one way moves. That’s not how it works.
Jason Berg: We have so much noise right now coming out of COVID and the changing dynamics of work from home. It’s hard to isolate any one of these variables right now. There’s so many things happening.
Craig Inman: Yes, yes. Okay. All right. No, that’s all for me. I appreciate it.
Operator: And we have our next question coming from the line of Stephen Farrell from Oppenheimer. Please go ahead.
Stephen Farrell: Good morning. You continue to see weakness in the one way transactions. Can you comment a little on the level of transactions compared to 2019?
Jason Berg: This is Jason. Compared to 2019, I’m not sure if we’re quite back down to that level, but we’ve been working our way back to that. I would say, I mentioned December, we actually had a slight improvement in those. So my hope is that we’re hitting the trough on the transactions here. The in town transactions are still ahead, and I would want to verify the statement before I make it. So I’ll just say we’re headed back towards that number. I can’t verify for sure if we’re back to it yet.
Stephen Farrell: Okay. You mentioned the trucks that are pending sale but still in the fleet. Is there a big carrying cost just to have those in the fleet while they’re waiting sale?
Joe Shoen: No, I think you could just take cost of capital, cost of interest, something like that. Just throw it at it. No, there’s not a big cost. The worst thing is the battery goes dead and you have to put it back on a battery charger. But no, they don’t. And they’re not going down in value. If anything, they might be inching up in value, but I don’t have enough frequency to where I’d be willing to predict that. But I could see them, because new truck prices are just astronomical. And so typically that kind of in a rough way flows through to used truck prices. So there’s no absolute certainty – it doesn’t cost us more to insure them. We’re self insured, essentially. So unless we have an insurance event, if the truck is parked, it doesn’t have an insurance event.
You’re basically looking at depreciation. And I think the depreciation is not a real cost I think the value of them is flat or increasing. Then you have whatever capital is tied up and whatever Jason wants to put on that for a cost.
Stephen Farrell: Good. And with the number of vehicles in the fleet growing, and you talked a little bit about this earlier, but is there an opportunity to sort of switch over one way vehicles that are older to the in town and local while the one way transactions are down or do you still need their availability?
Joe Shoen: We’re doing exactly that.
Stephen Farrell: And for the older vehicles, returns are more a function of lower utilization because they’re undergoing repair and maintenance or higher costs.
Joe Shoen: You’re asking which vehicle is more profitable, a new one or an old one? I guess, that question is, well.
Stephen Farrell: More specifically, for the older vehicles, are there returns more impacted by the downtime while they’re being repaired or the higher cost of the repair?
Joe Shoen: Any individual truck, that’ll vary. But as we model them out, our expectation and experience has shown that the increase in the maintenance costs, the decrease in the utilization, which takes into account the days out of the fleet for repair is largely offset by the significant decrease in the depreciation expense that we allocate towards them. So we depreciate these trucks down to 20% by the end of year seven or 30%, and then after that we straight line them down to 15% over the next eight years. So there’s a very low cost of depreciation there, and as a large cohort, that largely ends up offsetting the increased cost and the lower utilization. And to put up a button on your other question, I just checked Stephen, and on trailing 12-month one way transactions through December, we’re still ahead of where we were in December 2020. So it hasn’t pulled back as much as I may have made it sound, we’re still ways ahead.
Stephen Farrell: Thank you for that. And just one question on self storage, what percentage of new supply for the non-same stores is – new supply versus expansion and struggling stores there?
Joe Shoen: That’s a good question. I haven’t broken them out that way, but that’s a really good question. I could age that portfolio and see ones that have been in there. If they’ve been in there more than four years and haven’t hit the stabilized pool, then that would fall into that category of a lagging performer. I did not do that breakout this quarter.
Stephen Farrell: Okay. Well, thank you guys.
Operator: Thank you. There are no further questions at this time. I’d now like to turn the call back over to management for final closing comments.
Joe Shoen: Well, thanks everyone for this report. We look forward to speaking with you after we file our10-K in May. Thank you.
Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.