The Contractor’s Guide to Controllable Costs

You close out a rough month and pull up your numbers. Your P&L tells a story - profitability was down - but that’s not the whole story.

It doesn’t capture the unique blend of costs and events that go into running a P&D operation.

Maybe volume was down that month. Or fuel costs were up. Or one of your trucks spent a week in the shop.

It can be unsettling to have a challenging month. Lots of factors can feel outside your control. 

There’s good news: you can convert some of your variable costs into controllable expenses.

The Costs You Actually Can’t Control

Let’s get this part out of the way. Some things are outside contractors’ control, like package volume, the weather, goings-on at the terminal, and macroeconomic influences on fuel prices.

It’s important to know what you can and can’t control, so you commit your time and energy to the right challenges in order to run a successful operation. 

These costs exist, and they’ll continue to exist.

That’s not the problem - the problem is that contractors sometimes categorize too many expenses as uncontrollable, and leave profits on the table.

The Costs That Feel Variable or Unpredictable - But Don’t Have to Be

Here’s where you can make a major impact on your business’s profitability. These are spiky costs - lower one week, astronomically high the next. They can wreak havoc on your bottom line. 

But they don’t have to. Here are some examples of costs that you can convert to predictable expenses:

Repair and Maintenance - these top most contractors’ lists. Repairs and maintenance issues aren’t unavoidable, of course, but their unpredictable costs can be reduced, bringing a new level of stability to your bottom line and efficiency to your operation. A full-service, maintenance-inclusive lease like HTL’s changes the equation. With all* repair and maintenance covered in one weekly payment, you no longer have to worry about something like a transmission failure or engine replacement interfering with your capacity to run and invest in your business.

Fuel Spend - this is often a tricky one for contractors. It can vary widely week to week, depending on fuel prices, package volume, idling time, and more. Fuel spend and cost per gallon can often feel entirely out of your hands - but they don’t have to be. Fuel savings programs exist specifically to take the unpredictability out of one of your biggest recurring costs. 

Downtime Losses - these don’t appear as labeled line items on your P&L, but they’re there. Missed stops, service failures, rental expenses, and other consequences of a truck going down negatively impact your bottom line. A right-sized fleet, fast service turnaround, and maintenance-inclusive lease coverage change the math here more than most contractors realize.

The Costs Fully In Your Control

These require operational decisions, not just financial choices.

Route Efficiency - right-sizing your fleet can represent up to $120,000 in savings per unnecessary route eliminated. That's not a small number.

Driver Retention - maintaining your driver staff means more experienced, safer, efficient drivers for your fleet. That results in better service performance, better cared-for trucks, and reduced training costs.

Where Do I Start?

There’s a lot to consider, and it’s tough to manage the day-to-day of your operations and the overarching business strategy simultaneously. That’s why Hello Truck Lease offers a Free Fleet Efficiency Analysis to all contractors.

Ever wonder how much utilization time is left in your P&D trucks, or how to most efficiently deploy your fleet across your routes? Are you unsure when to lease and when to buy trucks? 

Maybe you’re wondering which P&L line items to convert into more predictable expenses first? Or, you’re curious how you can improve margins and bolster your bottom line?

We’ve got you.

Download our Free Fleet Analysis form to start a conversation about your fleet strategy objectives. We’ll run a complimentary analysis on your fleet, and provide recommendations for how you can most effectively and efficiently achieve your goals and improve your bottom line.

*excludes glass, tires, and physical damage