Standardizing Maintenance Expenses: Enhancing Maintenance Benchmarking Through Standardized GL Data

KSM Transport Advisors’ (KSMTA) FreightMarks^TM benchmarking service is designed to bring precision to financial analysis and enhance decision-making for carriers. In this installment of our ongoing series, we focus on non-driver compensation – a significant expense category critical for robust cost management and benchmarking. With clear definitions, standardized approaches, and actionable GL alignment strategies, carriers can enhance their financial clarity and strategic effectiveness.

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Enhancing Maintenance Benchmarking Through Standardized GL Data

Accurate maintenance cost visibility is essential to effective trucking performance benchmarking. Yet without consistent general ledger (GL) mapping practices, comparisons across fleets or against industry peers often fall short. This article outlines FreightMarks’ standardization framework for maintenance-related GL data, helping carriers generate meaningful insights and improve cost management.

Why Standardized Maintenance Data Matters

Maintenance expenses are among the most variable in a fleet’s operating budget. Whether tied to in-house shops or third-party service providers, these costs directly impact profitability and operational readiness. However, inconsistencies in how GL accounts are mapped, especially when blending tractor and trailer data or splitting internal labor from parts, often obscure true costs and hinder benchmarking efforts.

FreightMarks addresses this by establishing precise categories and allocation guidance to support data clarity, peer comparison, and operational decisions.

Key Maintenance Categories and Data Points

FreightMarks groups maintenance-related expenses into three primary categories:

1. Tractor Maintenance (Direct Variable Expense)

• GL Allocation: Includes parts, outside vendor repairs, direct labor, and tires for tractors.
• Data Point: Maintenance Expense – Tractor – Company Fleet (ID 12)

Benchmark: $0.08-$0.26 per mile, 2.5%-10% of revenue

2. Trailer Maintenance (General Expense – Total Asset Operations)

• GL Allocation: Parts, labor, tires, and vendor services directly tied to trailer assets.
• Data Point: Maintenance Expense – Trailer – Total Asset Operations (ID 14)

Benchmark: $0.02-$0.50 per mile, 1%-3.5% of revenue

3. Maintenance Wages and Overhead

• GL Allocation: Includes wages, benefits, and taxes for maintenance staff as well as fixed overhead (facility maintenance, tools, etc.) not allocated directly to tractors or trailers.
• Data Point: Maintenance Expense – Wages and Overhead – Total Asset Operations (ID 16)

Benchmark: $0.02-$0.07 per mile, 1%-5.1% of revenue

Allocation Recommendations

FreightMarks provides two primary allocation methods to improve accuracy where direct GL mapping isn’t feasible:

1. Ratio Allocation: Preferred method. Uses operational stats such as tractor/trailer counts or miles to apportion undifferentiated maintenance expenses (e.g., a combined GL for all repair parts) between tractor and trailer.
2. Percentage Allocation: Used for fixed, recurring distributions when ratio data isn’t available. Example: 85% to tractor, 15% to trailer when segmentation is not done at the GL level.

Improve Granularity Over Time

Once you’ve addressed and adopted the recommendations above, begin the process of segmenting maintenance GL expenses even further. For example, separating tractor parts into: 1) parts, 2) tractor tires. This improved level of granularity will allow for better comparisons, and highlight disparities/advantages versus peers.

Repair Revenue

Some carriers use revenue generated from third parties to improperly offset the expenses for the company-owned equipment. This is a great way to cover up growing expenses. Repair revenue, whether generated from third-party carriers or their own lease purchase operators, should be kept in its own profit center to eliminate any “cloudiness” when it comes to benchmarking.

Best Practices for GL Mapping (Bare Minimum)

1. Maintain distinct GL accounts for:
   1. Tractor vs. trailer repairs
   2. Internal vs. third-party repairs
   3. Labor vs. parts and services
   4. Separate warranty recoveries and credits from standard expense categories
   5. Review and align existing chart of accounts with FreightMarks’ structure before any proposed GL changes

Drive Clarity, Cut Costs

Standardizing maintenance-related GL data not only enhances benchmarking fidelity but also empowers carriers to identify cost inefficiencies, plan asset strategies, and improve shop operations. By following FreightMarks’ guidance, carriers can unlock a clearer understanding of where their maintenance dollars are going and how they compare to the broader industry. To learn more, contact a KSMTA advisor using the form below.