How To Manage Cost-Per-Mile in the Trucking Industry

Cost-per-mile is a critical Key Performance Indicator (KPI) in the trucking industry where every mile counts. There are multiple factors that impact cost-per-mile — fuel costs, maintenance costs, equipment costs, regulation changes, and more — and a better understanding of how you can manage these costs will help improve your cost-per-mile and your profitability. Learn how to better manage cost-per-mile in the trucking industry with this quick overview created by TransPlus.

Best Strategies to Manage Cost-Per-Mile in Trucking

The average cost-per-mile for trucking companies in the United States is an estimated $1.85 per mile and $2.76 per mile (Canadian dollars) for Canadian companies, but this number can vary significantly based on many factors, including fuel prices, truck type, and operational efficiency.  Where trucking and freight companies can set themselves apart is by implementing smart strategies and leveraging technology like a Transportation Management System (TMS). With better strategies, trucking companies can gain better control over their cost-per-mile and improve their bottom line.

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Here are a few key strategies you can use to better manage cost-per-mile:

Regularly Perform Cost Analysis

Regularly analyze your operational costs and your cost-per-mile to identify areas where expenses can be reduced. This includes tracking fuel consumption, maintenance costs, driver wages, and other expenses to pinpoint areas for improvement and find areas where you may be able to reduce costs and improve your cost-per-mile.

Work to Reduce Fuel Costs and Consumption

Fuel is a major expense for trucking companies and represents 20% - 25% of the operating budget for many trucking companies. Trucking companies can implement strategies to reduce fuel consumption, such as route optimization, driver training to promote fuel-efficient driving, and regular vehicle maintenance to ensure that your fleet is as efficient as possible.

Perform Preventative Maintenance

Regular preventative maintenance can help avoid breakdowns that lead to additional repair costs and extend the life of your trucks. This maintenance includes routine inspections, oil changes, tire rotations, and other maintenance tasks that can help prevent unexpected repairs and downtime that add to your operational costs and detract from your profits.

Negotiate Shipping Rates

Your shipping rates are a key aspect of your cost-per-mile. Working with shippers and negotiating favorable shipping rates with clients is a great way to maintain healthy profit margins and reduce costs. Research market rates, understand your own costs, and leverage your strengths to negotiate rates that help you maintain and grow profits.

Employ the Right Technology

A high-quality Transportation Management System can be a valuable tool for trucking companies that want to manage and reduce their cost-per-mile. Investing in a comprehensive  TMS can significantly improve your cost-per-mile by optimizing routes, improving load planning, automating tasks, and providing valuable data to help you make more informed decisions. When you have the right technology on your side, you can reduce cost-per-mile and drive success.

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READ MORE: How Does a TMS Improve Cost-Per-Mile?

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Learning how to effectively manage cost-per-mile in the trucking industry is essential for trucking companies to succeed in a competitive market. By implementing these strategies and leveraging the power of technology, you can gain greater control over your expenses, become more efficient, and boost your profits.

Want to learn more about how TransPlus TMS can help you manage and reduce your cost-per-mile? Contact us today for a demo of TransPlus TMS and discover the benefits of our comprehensive solution!

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