There’s a cost for every mile a truck puts on the odometer. From fuel prices to maintenance to driver pay, finding ways to reduce your cost-per-mile can help your trucking business navigate these uncertain economic times.
Cost-per-mile is one of the most critical metrics for trucking companies. Rising fuel prices and inflation are causing expenses to rise in an industry with razor-thin margins. Technology like transportation management software can help you reduce your cost-per-mile.
In this post, we’re looking at what goes into an average cost-per-mile, why it’s important, and four ways you can reduce your cost-per-mile and optimize your fleet for the long haul.
What is Cost-per-mile and why is it important?
Cost-per-mile is the total cost to operate your fleet on a per-mile basis. This number includes fuel costs, maintenance, insurance, permits, driver wages and benefits, and administrative costs.
Understanding your cost-per-mile helps determine the total cost of owning and operating your fleet. It’s the crucial benchmark to help make better data-driven decisions to optimize your fleet and improve your bottom line.
Having a clear view of your cost-per-mile can also make it easier to bid on potential loads and determine the return on investment for your jobs.
How real-time data reduces cost-per-mile
We’re living in a data-driven world. By using transportation management software to collect and analyze vast amounts of operational data, trucking companies can gain valuable insights into their performance and identify areas where they can improve.
- Trucking companies can use real-time data to reduce their cost-per-mile by understanding vehicle location, speed, and fuel consumption.
- Real-time data can help trucking companies plan more efficient routes.
- Vehicle performance and scheduled maintenance data can help identify potential problems before they become significant issues. This can help to prevent costly breakdowns and delays and can help to extend the life of your vehicles.
- Real-time data can also improve communication between drivers, dispatchers, and other trucking company employees. By sharing information in real-time, trucking companies can improve their coordination and reduce the time their vehicles spend on the road or waiting at customer locations
Using a transportation management system with rich real-time data can help trucking companies identify inefficiencies and waste in their operations and give you concrete ways to reduce your cost-per-mile.
Route optimization and planning
When you step into any modern warehouse, you’ll see optimization in action. Whether it’s voice-based picking systems or autonomous robots, today’s warehouses are designed to save time and money from the shelf to the loading dock.
That optimization doesn’t have to end when the truck leaves the dock. Transportation software can leverage real-time data from GPS and warehouse systems to help reduce the cost-per-mile by finding the most efficient routes based on traffic, road conditions, and delivery locations. Route optimizations can also help reduce the time and fuel a truck needs to spend on the road to minimize cost-per-mile further.
Using route optimization can also help trucking companies avoid situations where trucks are driving empty or partially empty. Partial loads typically increase cost-per-mile because they use more fuel for smaller loads.