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AOP BlogCategory ManagementProcurement Iq

Cost Drivers – National Trucking Services Category

By August 28, 2021May 29th, 2024No Comments

Today we will uncover the primary cost drivers impacting national trucking services.

The Numbers

Unsurprisingly, national trucking services is a labor-intensive category of spend, one that has been in the news more than once recently as driver shortages – especially in specialized categories such as fuel tanker driving – plague supply chains and slow company efforts to get goods and materials into their customers’ hands.

The majority cost drivers are wages at 29.2% and fuel at 18.7%. While procurement cannot affect the equipment depreciation cost of their suppliers (10.7%), this information may provide insight into the relative size and management of each supplier’s fleet. With a profit margin averaging about 5.7%, this overhead-heavy category of spend is most likely to deliver savings through scale of spend rather than the overall savings rate.

How to Use this Information

National trucking suppliers include truckload (TL), less-than-truckload (LTL), and containerized freight carriers that run routes typically considered too long for same-day return trips. It excludes local freight trucking companies and letter/small parcel services. 

For carriers whose cost breakdown does not seem to align with these estimates, look at related metrics such as driver retention rates and fuel management strategy to identify and address the operational sources of additional costs or cost advantages.

Dig Deeper

We have partnered with ProcurementIQ to dig into their treasure trove category intelligence reports, with new insights every Friday.  To dig deeper into the National Trucking Services category, and over 1,000 other indirect spend categories, visit procurementiq.com.

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