MISSISSAUGA, Ont. – “Do you wanna make more money?” That was how Brian Abel, freight network engineer with KSM Transport Advisors, introduced himself before a Surface Transportation Summit session on improving the profitability of your trucking business.
The key to achieving this, Abel contended, is by leveraging analytics. “Carriers for years have sought a metric that could best capture potential profitability,” he explained. His firm developed a concept called “yield,” which is essentially the margin per day of a fleet’s entire network. “As yield goes up, operating ratio goes down,” Abel explained. “The concept of yield creates a common language to allow carriers to analyze freight using proven mathematics.”
The metric measures the time and cost to deliver a load, beginning with the empty call following the previous delivery. Any unplanned time is considered delay, which gives the fleet insight into how long it actually takes to deliver a load compared to its expectations. It also considers geography and helps fleets to drill down on the most – and least – lucrative lanes, loads, and customers.
These analytics also allow fleets to better understand backhaul requirements, and whether they’re charging appropriately. Mike Buck, president, MCB Fleet Management Consulting, spoke to how improving maintenance practices can also improve a fleet’s profitability. A good fleet maintenance program needs rigorous inspection processes, he noted, so all technicians are following the same workflow.