Cost per mile (CPM) is one of the most important metrics for fleet managers. After all, CPM is what determines how much it costs to operate each truck in your fleet.
But what many fleet managers don’t realize is that CPM is also heavily influenced by data. Here are seven ways that trucking data can affect your cost per mile.
1. Fuel Prices
Fuel prices are one of the biggest expenses for any trucking fleet. And fuel prices are always fluctuating, sometimes on a daily basis. That’s why it’s so important to track fuel prices closely and adjust your CPM accordingly.
The best way to do this is to use a fuel price tracking service. The good ones allow you to see real-time fuel prices at truck stops across the country, so you can make sure you’re always getting the best price possible.
2. Maintenance Costs
Another big expense for trucking fleets is maintenance. And like fuel prices, maintenance costs can fluctuate depending on a number of factors. That’s why it’s important to track your maintenance costs closely and adjust your CPM accordingly.
Once again, software services can be a great help in this regard. But you also need to schedule maintenance with shops that have stellar reputations (like J&A Fleet Maintenance). We can meet you where you are to help you control maintenance costs more effectively.
3. Driver Payroll
Driver payroll is another major expense for trucking fleets. This includes salary, per diem, Social Security and Medicare/Medicaid contributions, as well as any distributions you make to an employee’s healthcare or 401k contributions.
Driver retention also weighs into your overall payroll costs, so make sure you know what those retention rates are, what it’s costing you to onboard people, and what the major contributing factors are to those who quit you. Only by gaining control over these factors can you arrive at an accurate CPM.
4. Trailer Costs
Trailer costs are another big expense for trucking fleets. It’s important to track your trailer costs closely and adjust your CPM accordingly based on maintenance, repair, and availability. Usually, fleet tracking software will enable you to keep up with your trailer locations and scheduled maintenance the same as for your tractors.
5. Tire Costs
Tire replacement costs are yet another major expense that go into determining your overall cost per mile. Look at factors such as tread, miles traveled, any unexpected damage that a tire has undergone, and buying in bulk as factors that can help you keep these costs as low as possible.
Other expenses might include things like permit fees, registration fees, tolls, etc. That’s why it’s important to track these expenses as they occur and try to plan around them as much as possible. Also, make sure that you employees know your policies regarding where they can and can’t go. If a driver violates the policy, make sure that he understands the repercussions (i.e., removing unnecessary tolling from his take-home for the load).
With hidden expenses, we’re talking about things like insurance premiums, license fees, and financing charges. Not every unit will be in the same stages of ownership or road safety, and that can definitely have a bearing on what you pay. Track all this information individually, treating each truck as a business in itself, because that’s really what it is at the end of the day.
CPM Is One of Your Most Important Metrics
As you can see, there are a lot of different factors that go into calculating cost per mile. And while it may seem daunting at first, with a little bit of practice, it will become second nature. Just remember: always keep an eye on your data, and be sure to adjust your CPM accordingly.
With all the many technologies available today that can help you track your units with such granularity, there really is no reason to not have a handle on these numbers. And once you do, you can work on each benchmark to improve costs over time.
For more helpful fleet management and trucking news, tips, and information, check out some of our additional blog posts or contact us at J&A Fleet Maintenance to see how we can help reduce your CPM.