“Okay, so we hear all the time that we should use data to improve our trucking operation, but where should we even start?”
We hear this question all the time from our customers. There are many data projects that can quickly create a lot of profit for motor carriers–but you can’t do them all at once–so which ones generate the biggest bang for buck? While this answer will vary for every carrier based on their operation, culture and projects they have already done, let’s conservatively look at some of the top opportunities for a typical 250 truck dry van operation.
Fuel Efficiency: With average diesel prices around $5.00 per gallon, it might be no surprise that a data-driven focus on fuel efficiency tops the list at $700k per year in profit based on a 5% improvement in MPG.
Maintenance Cost Per Mile: Using unit, component, vendor and driver level data to identify and manage exceptions, combined with make, model and spec level aggregations to make informed strategic equipment buy and sell decisions, profit can be increased by over $550k per year based on a $0.03 per mile improvement.
Rate Per Mile: Examining network pricing on an apples-to-apples basis and focusing on opportunities by customer, lane and market as well as exceptions can earn our typical carrier another $400k per year based on improving rate per mile by 1%.
Preplan Before Empty: With a scarcity of drivers, one of the most powerful tools we have to improve driver utilization is driver managers and planners working together to plan drivers well in advance of their next empty. Managing this process with a data-driven approach can yield over $230k in additional annual profit based on an improvement of 1 additional driving hour per day per driver.
Cash Cycle Improvement: While our typical carrier pays many of their expenses like fuel and driver almost immediately, it can take months for them to get paid–every day counts. Managing rating, documentation, invoicing and collections exceptions with data can reduce 2 days from empty to cash resulting in a $220k gain.
With just these ideas, our typical 250 truck dry van carrier could improve profitability by over $2M in 2023. We’ll expand on many of these ideas in coming blog posts, so please be sure to follow. Do you agree or disagree with the top 5? What are your top data project priorities for 2023?
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