Managing truck fleet services is no easy feat. If you want to make sure you are on the right path to financial success, you need accurate data on your expenses and earnings.
Calculating your cost per mile (CPM) is a clear and simple way to manage your fleet efficiently. If you don’t know the CPM of all your trucks, you’ll have a hard time charging the best rate to your shippers. You might even end up losing money if you overlook this aspect of your business.
Getting your CPM is easily done by comparing your operating costs against the number of miles that each of your trucks has. Here’s what you can do to keep track of your costs and make your business more profitable and efficient.
Keeping Track of Operating Costs
Start by itemizing your operating costs, which include fixed and variable costs as well as salaries. Maintaining a catalog of your costs is the right thing to do to make sure you’re not overspending on anything.
You need to enumerate all the details down to every single transaction. Organize them into the three categories mentioned as follows:
Accurate Documentation Matters
Avoid generalizing or rounding off numbers. You’re just making it harder to get accurate results. You need to be as exact as possible to make this work. Even the smallest expense should be documented in your list.
Long-Term and Short-Term Costs
When launching a new trucking business, you need to be ready for the upfront costs. Buying new trucks and equipment, as well as renting a place of business comes to mind. Long-term costs, on the other hand, can cripple your business if you don’t keep track of them appropriately. Fuel expenses and wages are just some of the long-term costs that every trucking business should be wary of.
Becoming More Profitable
If you’re in it for the long haul, you’ll realize that fuel cost is your biggest adversary. According to a study from the Truckers Report, fuel is the largest operating expense of most trucking companies, followed only by driver salaries. In fact, fuel expenses make up 39% of the total operating cost of trucking companies.
If you want to make your trucking business a profitable one, you have two things to consider:
Keeping track of your CPM can mean the difference between bankruptcy and a successful business venture. It pays to have a working knowledge of your books. Remember, running your company without personally overseeing your expenses is no different than driving with your eyes closed!
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