What's Your Cost Per Mile?
There are no industry standards. We need some. TMC is working on it.
JIM WINSOR
EXECUTIVE EDITOR
In the nearly 45 years I've been a trucking journalist, the number one question I receive every year is: "What does it cost to run an 18-wheeler?" Right behind that one is: "Do you have any cost-per-mile figures? My company wants to find out how we stack up."
I have yet to be able to give good answers because there are no cost-per-mile standards the industry agrees on. For an owner-operator, cpm is pretty easy: total cost of ownership including maintenance, taxes etc., divided by the miles operated gives the cpm.
But hold on a minute. Does this figure include wages/salary he pays himself or another driver? And what about vehicle use? Can you accurately compare the cpm of those 18-wheelers which hauled off the tons and tons of the World Trade Center debris with freight haulers running the flat lands of Mid-America? Or with tankers making deliveries?
A task force of the Technology and Maintenance Council (TMC) has started to work on a definition of cost per mile. Goal is to reach consensus, at least for linehaul vehicles, so fleets can compare accurately what their equipment and maintenance cpm's are.
The group is still in its infancy, but here is a list of some of questions the task force hopes to build consensus on. As you'll see, there are lots of hidden costs often overlooked or ignored. Many of the questions assume the fleet has its own maintenance shop(s) and mechanics.
How do you answer these?
• Does your cpm include all truck, tractor and trailer miles operated?
• Fuel? Oil? Grease? Transmission/axle lubes? Windshield fluid?
• All truck/tractor parts? Trailer parts?
• All shop supplies (like heat, water, electricity, building costs including rest room supplies, phone bills, shop uniforms, shop lighting, shop tools?)
• Mechanic costs including benefits, taxes, vacations, etc.? Are these all combined into a single hourly shop labor rate? And if so, does the rate vary by region?
• Other maintenance labor including supervisors/managers? Parts/clerical personnel? How is this overhead labor charged?
• Company-owned cars and service vehicles? Do you maintain them?
• Vehicle purchase/disposal costs? Are these in your cpm?
• Tires: capitalized on new equipment? Expensed as replacements? Retreads?
• In-service costs of new equipment (decals, fire extinguishers, add-on equipment/accessories)?
• All repairs made on the road? Bought from service providers? Towing?
• Accident repair costs?
• Vehicle communications costs including satellite equipment, on-board computers, etc.? Repair/maintenance of that equipment?
• Shop labor provided for service/repair of non-freight equipment, such as material handling?
• Reefer/pumps/hydraulic tailgate costs if applicable, in your cpm?
Other general cost-related questions: Is 100% of mechanics' time charged? What about indirect labor? Where's it charged? How do you recover maintenance costs for work done in other company departments? Internal billing?
So... back to my original question: What is your equipment and maintenance cost per mile? Do your calculations reflect all the items listed above? If any of these areas are missing from your operating budget, you should perhaps consider including them. And if you have equipment and maintenance operating costs that aren't reflected here, please pass them on to me.
I'll report further on the task force and their findings as we move forward.
