A carrier gains clearer financial results when its general ledger separates the major capacity types and shared operations, then assigns revenue and expense through direct, ratio-based, or documented percentage allocations.
Why Cost Centers Matter
Clear cost centers provide a granular view of operational health and make financial results more useful for management and benchmarking. KSMTA recommends segmenting operations by the way capacity is supplied and by the shared functions that support the asset fleet.
Company Fleet
The company-fleet cost center includes:
- Driver wages: Base pay, accessorial compensation, and per diem, generally 23% to 42% of revenue, depending heavily on geography.
- Benefits, incentives, and payroll taxes: Insurance, retirement, payroll taxes, and bonuses, generally 2% to 17% of revenue.
- Fuel: Tractor and reefer diesel, DEF, and fuel taxes, generally 15% to 25% of revenue.
- Tractor maintenance: Labor, parts, tires, and warranty recovery, generally 2.5% to 10% of revenue.
- Variable expenses: Scales, driver lodging, transaction fees, and similar on-road expenses, usually a small percentage of revenue.
Owner Operators
Owner-operator expenses include:
- Purchased transportation paid by mileage or percentage, generally 63% to 85% of revenue.
- Benefits and incentives such as bonuses or subsidized insurance, generally 0.5% to 2% of revenue.
- Minimal fuel or maintenance expense when those costs remain the contractor's responsibility.
Lease Purchase Operators
Lease-purchase costs include:
- Purchased transportation, generally 51% to 70% of revenue.
- Safety or productivity incentives, generally 0.5% to 2% of revenue.
- Lease or rent payments and related equipment costs, included within purchased transportation.
Brokerage
The brokerage cost center includes payments to third-party carriers as purchased transportation, typically its largest variable expense. It also includes brokerage-specific non-driver wages and benefits and brokerage overhead, each commonly ranging from 4% to 10% of revenue.
Total Asset Operations
Shared asset-operation expenses include:
- Trailer maintenance, generally 1% to 3.5% of revenue.
- Non-driver wages and benefits for administrative, operating, and shop staff, generally 4% to 10% of revenue.
- Fixed overhead such as offices, utilities, and professional services, generally 4% to 10% of revenue.
- Recruiting, screening, and retention expenses.
Why Shared Asset Costs Belong Here
These costs apply across more than one operating segment. Keeping them in Total Asset Operations allows the carrier to allocate them across the business rather than forcing them into one capacity type and distorting that segment's performance.
Benchmarking Through Effective GL Mapping
Accurate FreightMarks benchmarking begins with mapping the carrier's accounts to the standard chart of accounts. The allocation method should follow a clear hierarchy.
Direct Allocation
Direct allocation is the most precise method. Revenue and expenses are mapped at the GL-account level to the cost center that generated them. It provides the strongest transparency for benchmarking and management decisions.
Ratio Allocation
When direct assignment is unavailable, ratio allocation links the amount to an operational measure. If a GL account combines linehaul revenue from company trucks and owner-operators, dispatched miles can be used to divide revenue between those groups.
Percentage Allocation
When neither direct nor ratio allocation is practical, a fixed percentage provides a consistent alternative. Workers' compensation may be divided 90% to drivers and 10% to non-drivers and maintenance personnel, for example.
Allocations and Management Decisions
Allocation choices affect how leaders evaluate driver wages, benefits, fuel, maintenance, and overhead. Precise allocations reveal the actual economics of each operating model and help management decide where to place equipment, employees, and capital.
FreightMarks relies on segmented and allocated GL data to compare financial and operational performance with peers. A carefully structured GL is therefore not only an accounting improvement; it gives the carrier a clearer basis for responding to market changes and protecting profitability.