Fuel as a % of Revenue

I am at around 35% since I started in July. If I take it as total gross before I get my cut, it's like 31%.

Hoping I can get that number down here by summer.

 

I track it as a dollar figure, not as percentage. I'm constantly keeping an eye on, and striving for, a dollar figure after my fuel cost.

In my mind fuel is the only variable cost that has any significant effect on my bottom line.

 

I know what my dollar amount is for both fuel and for revenue, both gross and net.


Not hard to get a percentage from there.

 

Well yes MNDriver, but I don't see a need to track fuel as a percentage since it can vary so much.

If you keep $1.00 after fuel and fuel costs $.70/ mile, fuel is 41% ($4.20/6mpg)

When fuel goes to $6/gal, and you still keep $1.00/ mile, fuel is 50%.

So you could tell the guy on the phone that what used to cost $1.70 will now cost $2.00 because fuel costs 42% more. So maybe it's useful to know in negotiating, but it's not found to change what you need to keep.

Knowing what you need to make after fuel is far more important. Especially since you'll never get equal rates in opposite directions.

 

It was nice 15 years ago when fuel was 19-21% of gross. But now I'm at 29-34%. Small operation like you. 2 tractors 5 trailers. Fuel percentage is 34% when I run refer. 29% when I run step deck. And somewhere in between when I run the dry van. Hope this helps.

 

It's an indicator.


It's not the wherewithall.


But it's also a nice way to compare to others how your operation is sitting also.

 

Pulling flat bed local, fuel is averaging 24 to 26 % of freight bill. I average $2.36 per hub mile,fuel running about 58 to 61 cents a mile. Not quite 7 mpg.

 

I don't think it indicates anything useful. It certainly doesn't tell you what you're making or used to make.

It is entirely possible to have a fuel cost of 36% of revenue and keep 25% more than you used to when fuel ran 29% of revenue.

Example:
A
$1.95/ mile. Gross revenue 100%
$0.70/fuel ($4.2/6mpg) 36%
$1.25 gross profit. 64%

B
$1.40/mile
$0.40/fuel ($2.40/6mpg) 29%
$1.00 gross profit 71%

Are you going to be happy that in scenario A your Gross Profit is 25% higher than in scenario B? Or will you be depressed that fuel cost 24% more than in B?

Yes I understand that $1.25 may only go as far as $1.00 used to go, but my point is that-

Percentages don't tell you much about the health of your operation.

I routinely haul one way at 50-75% fuel cost and then the other way for around 15%. And if I can squeeze on a partial, it may only run at 1% fuel cost.

Your operation will fly or die by your Gross Profit.