Understanding Fuel Cards for Trucking Businesses

Understanding Fuel Cards for Trucking Businesses

Fuel is one of the biggest expenses trucking companies face. When you have other expenses to meet such as maintenance, repairs, and payroll, paying for fuel at the time the trucker needs it is not always realistic.

Trucking company fuel cards are like credit cards for truck drivers to purchase the fuel they need to stay on the road and make deliveries on time. You may also hear them referred to as fleet cards although the two are not exactly the same. Trucking company fuel cards typically cover fuel only while fleet cards may cover repairs, maintenance, car washes, and small items truckers purchase at truck stops.

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How to Calculate Your Trucking Cost Per Mile

Know Your Trucking Cost Per Mile to Maximize Profits

To earn a profitable living as a trucker, you need to minimize trucking expenses while maximizing revenue. Your profit in this industry is the amount of money you keep after paying all trucking expenses. However, your profit is not your net income. That is because the Internal Revenue Service (IRS) allows you to write off business expenses while taxing you only on the profit.

Knowing your trucking cost by mile is the first step in understanding your trucking expenses so you can determine your profit. We outline how to calculate your cost per mile below.

Estimate How Many Miles You Drive Per Month

You can start the process by reviewing your driver logs and adding up your average miles driven per month. Although the number will vary for every trucker, it’s safe to assume you cover a lot of mileage every week, month, and year. According to a 2018 report posted by Business Insider, the typical long-haul trucker drives 100,000 miles a year or approximately 8,333 miles per month. Be sure to include both compensated and non-compensated mileage in your calculations.

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Make a List of Your Fixed and Variable Expenses

A fixed expense is one that remains the same from one month to the next whether you drive few miles or many. Common examples of fixed trucking expenses include:

  • Health insurance
  • License plates
  • Licenses and permits
  • Trucking insurance
  • Workers’ compensation insurance

Some fixed trucking expenses occur yearly rather than monthly. You will need to divide the total annual payment by 12 to come up with a monthly cost.

Variable trucking expenses are those that change based on the number of miles you drive each month. Trucking expenses that fall into the variable category include:

  • Fuel
  • Meals
  • Loading and unloading fees
  • Lodging
  • Maintenance and repairs
  • Parking expenses
  • Toll roads

Don’t forget to leave a category for miscellaneous trucking expenses that won’t fit into any other category.

Use the Above Information to Figure Trucking cost by the mile

After adding the totals from both fixed and variable trucking expenses, divide the number from each column by the number of miles driven each month. Using the average 8,333 miles per month and a fixed expense amount of $2,500, you would have a trucking cost by mile of 30 cents. Repeat this process with the variable expenses column and then add the two figures together. This is your trucking cost by mile. To determine your profit, subtract your trucking cost by mile from the amount you earn per mile.

We Can Help You Lower Trucking insurance Rates

Looking at your usual expenses in one place can be a real eye-opener. Maybe you never realized how much you were spending on trucking insurance and want to do what you can to lower your rates. TruckInsuranceQuotes.com is here to help. We work with leading insurance companies offering rates and policies just for truckers.

After we receive your inquiry, we search our database to provide you with several leads. You then compare rates and contact the insurer you chose for the next steps. Learn more today by calling us at 678-271-3449 or click here to start an online quote request form.

What’s the Difference Between a Contract Rate or a Spot Rate?

What's the Difference Between a Contract Rate or a Spot Rate?

When transferring something via freight, you’re usually given either contract rates or spot ratesContract rates or spot rates are very different and are used for different things, which also explains why they vary so significantly. Let’s take a look at contract rates vs. spot rates and when you might prefer one over the other.

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How to survive a DOT compliance audit

DOT audit

If your company is subject to Federal Motor Carrier Safety Regulations (FMCSR), it’s likely that sooner or later you’ll deal with a DOT compliance audit. You don’t have to be a trucking company. Any outfit that operates vehicles over 10,000 pounds can be audited. This can include landscaping businesses, concrete companies and towing companies.

When you receive an audit notice, there’s reason to be concerned. In 2019 only six percent of firms escaped an inspection or audit without a violation. But if you follow a few best practices, you can get through a DOT audit with minimal hardship.

Why DOT Audits Take Place

Sometimes audits are random, and sometimes they’re triggered. Accidents attract the attention of auditors, especially accidents resulting in injury and death. Compliance, safety and accountability (CSA) points from accidents and roadside inspections can add up and lead to an audit.

Be Prepared with Good Record Keeping

The best way to survive an audit is to be prepared before the DOT calls on you. That means keeping your records up to date. Have your documentation secure, centralized and backed up.

A big source of audit violations is the driver qualification file. Common problems include missing inquiries into employment records, lack of medical certificates and not having a file on every driver.

It’s also important to maintain vehicle files, accident reports and records of drug and alcohol testing.

When the Audit Notice Arrives

Surprise audits are unusual. Normally you will receive a notice in the form of a letter, which will direct you to provide information and/or call for next steps.

Respond promptly. If you suspect the audit might not be random, it’s fine to ask. Usually, they’ll tell you. Be thorough but don’t volunteer documentation. Give them what they ask for.

Requested files might include tax information, truck insurance documentation, fiscal information, employee lists, vehicle lists and alcohol and drug forms. If they request information beyond the scope of FMCSA, it may be in your best interest to provide it anyway.

If there’s documentation you think might be relevant but hasn’t been requested, gather it but don’t give it to them at this point.

If your documentation doesn’t look right, don’t change it or make anything up. If you’re caught at this the DOT will not only severely penalize you but will never stop auditing you.

During the Audit

Have a quiet, private space to meet with auditors. Don’t offer food; they’re not allowed to accept it. Arrange your schedule to avoid interruptions. Don’t volunteer information or provide more documentation than was requested.

If your files include irrelevant details, remove them. If you’ve gathered unrequested documents that could be relevant, keep them in a nearby room and retrieve them if necessary. You don’t want auditors fishing through files they haven’t asked to see.

Audit Outcome

After the audit you’ll receive a rating of Satisfactory, Conditional or Unsatisfactory. If you’re rated Satisfactory, great! Keep it up with the safety practices and record-keeping that got you where you are.

A Conditional rating means there’s at least one item to be corrected. The good news is that you haven’t failed, and the DOT doesn’t see you as a safety risk. There are likely to be fines, and you’ll have to create and submit a Safety Management Plan to correct any infractions.

An Unsatisfactory Rating is what no one wants. You could be shut down. At the very least, you’ll have to devise and carry out a program to reverse that rating.

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Who is impacted by the CSA?

Trucking CSA

As a motor carrier, you know that you need to pay attention to the FMCSA and their regulations. There are a few letters that you might have heard about — CSA, or Compliance, Safety, Accountability. What is the trucking CSA, and who is affected by it? (And why is there an FMCSA and a CSA? That’s just confusing.) Is it something that your motor carrier is subject to? We’ll explain. 

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What’s happening with truck driver turnover with COVID-19?

Truck driver turnover during COVID

The coronavirus pandemic has definitely led to a lot of changes and challenges – there’s no denying that. Pretty much everyone and everything has been affected by the pandemic. One thing that was impacted by COVID-19 is the driver turnover rate in the trucking industry, an interesting effect of the virus: the turnover rate in the trucking world dropped during the second quarter. 

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What New Entrants need to know about safety audits

Trucking safety audits

If you are a New Entrant, you have to go through a safety audit within the first year of operation. But what exactly is that, and what does it mean? What happens during the audit? What violations could cause an automatic failure of the audit? And what happens if you pass your audit – or if you fail your audit? We’ll answer those questions so you know what to expect from safety audits. 

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What’s the New Entrant Program website?

New Entrant Program website

If you’re new to the trucking world, you probably have a lot of questions. That’s okay! The FMCSA has a lot of helpful information for new entrants. There’s a lot to find out and a lot to learn, but fortunately you can find out more with the New Entrant Program website. That’s a great way to familiarize yourself with the trucking and registration-related information you need. We’ll explain a handful of the sections on the New Entrant Program website.

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Information systems the FMCSA runs

FMCSA information systems

The FMCSA, or Federal Motor Carrier Safety Administration, has a lot on its plate. They run a lot of different programs related to safety and they have a lot of different programs to keep track of the data they collect. Since the FMCSA’s goal is to enhance safety on the nation’s roads, a lot of information needs to be stored and organized. It can be a lot to keep it straight. At any rate, here are a few FMCSA information systems you should know about.

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