- Thread starter KeyFactor
- Start date

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Knowing a number as accurate as possible to calculate your true cost is critical. A cost per mile number is only accurate if you include every cent of your total cost. Too many carriers base their cost per mile on operational costs only. Once you add in all administrative costs, all building costs, all management, all taxes, all travel and entertainment, and every single dollar that is on your monthly P&L and then divide by miles driven you will then have an accurate number.

And since this number will change monthly and seasonally you need to average it out over at least 5 years to have a number that makes sense.

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I had the same experience.. maybe the same old businessman. He told me that the secret to his success was always getting back to people.

Knowing a number as accurate as possible to calculate your true cost is critical. A cost per mile number is only accurate if you include every cent of your total cost. Too many carriers base their cost per mile on operational costs only. Once you add in all administrative costs, all building costs, all management, all taxes, all travel and entertainment, and every single dollar that is on your monthly P&L and then divide by miles driven you will then have an accurate number.

And since this number will change monthly and seasonally you need to average it out over at least 5 years to have a number that makes sense.

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I think any way can work if you use it properly. Cost per mile that only includes direct costs (fuel, driver salary, maintenance) is perfectly valid if you're trying to determine the potential contribution of a given load. It will tell you how much is available to service your other operating costs or fall to the bottom line as the case may be. Your approach also works; the information provided is not exactly the same, but can be useful nonetheless.A cost per mile number is only accurate if you include every cent of your total cost. Too many carriers base their cost per mile on operational costs only.

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This is the total dollars of all my orders on the books that need to be picked up, en-route or yet to be delivered. Once it is delivered it moves to the AR bucket. Drilling down into this number I can see how many orders/dollars have been picked up and en-route, and how many are waiting to be picked up.

This number tells me a number of things. If the number is low then its a slow week or the orders are being fulfilled quickly (shorter lanes). If the number is high, we have a lot of orders (great!) or dispatch needs to up their game and deliver loads quicker (push to have delivery dates tighter) - or the lanes are longer.

It also helps me to identify cash flow. Longer lanes usually means that the expenses needed to fulfill the lane will be used way before the invoice.

It is a really great metric to watch and see how the numbers coincide with your cash-flow, AR, and forward plan for capital expenditures. It is the number I used the most to identify potential issues way before I have to deal with the fallout.

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When calculating your true cost remember the most important thing ... profit is an expense.

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and apparently for many an expense that is approaching zero..