Standardizing Non-Driver Compensation: Strengthening Internal Insights and Industry Benchmarking

KSM Transport Advisors’ (KSMTA) FreightMarks^™ 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.

---

The Significance of Standardized Non-Driver Compensation Data

Accurate and categorized non-driver compensation data is essential for internal management and external benchmarking. Internally, clear visibility into compensation data for non-driving personnel enhances cost control and budgeting accuracy. Externally, standardized data ensures comparability across industry peers, driving meaningful benchmarking insights.

As many carriers have reduced tractor count during 2024 and through the early part of 2025, it is prudent to keep overhead aligned with revenue and contribution margin. Making sure that you have clear insight into driver versus non-driver total compensation allows for more meaningful benchmarking.

Non-Driver Wages and Benefits Defined

This category includes direct compensation and associated costs for all non-driving personnel. This encompasses roles in:

• Operations
• Sales and marketing
• Recruiting
• Safety and risk management
• Information services
• Finance and administration
• Brokerage and logistics

Note: This does not include any maintenance personnel and should be segmented separately in your general ledger. The exception is onroad breakdown support staff. This is an operational function, as opposed to maintenance.

Additionally, non-driver benefits and payroll taxes cover:

• Payroll taxes (FUTA, SUTA, EI, CPP, workers compensation)
• Healthcare benefits (employer portion)
• Retirement benefits (employer contributions)

FreightMarks benchmarking data shows non-driver compensation typically ranges from $0.12 to $0.27 per mile, or 4% to 13% of total revenue, depending on operational size and complexity. Further, from a headcount perspective, the following are current averages for each operating mode for driver to non-driver ratio (use full-time equivalent calculation):

• Dryvan: 5.3 : 1 (drivers : non-drivers)
• Reefer 5.1 : 1
• Flatbed 4.6 : 1
• Note: Any shared services between non-asset and asset operations should allocate both expense and headcount in an equitable manner, using proportional activities and contribution.

Aligning General Ledger (GL) With FreightMarks Standards

To standardize non-driver compensation, carriers should:

Map GL Accounts

• Utilize KSMTA’s GL Mapper tool to align relevant accounts to Data Category 9.8 (Non-Driver Wages and Benefits):
  • Operations Salaries, Marketing Wages, and Administrative Salaries should all be mapped to Non-Driver Wages.
  • Payroll Taxes and Healthcare Costs specific to non-driving employees are mapped under Non-Driver Benefits.

Segment Costs Clearly

• Distinguish clearly between driver and non-driver compensation accounts.
• Maintain separate GL accounts for workers compensation expenses wherever possible; otherwise, employ a 90/10 allocation (10% non-drivers).

Implement Allocation Methods

• Employ ratio-based allocation methods, such as personnel headcount or departmental budget proportions, to accurately distribute mixed expenses.
• Use percentage-based allocation as a backup where detailed data is unavailable.

Maintain Consistency and Regular Review

• Regularly review and adjust account mappings and allocation methods to maintain accuracy.

Key Implementation Checklist

1. Clearly Define Categories: Understand what constitutes Non-Driver Wages versus Non-Driver Benefits.
2. Accurate GL Mapping: Align accounts with FreightMarks standards.
3. Segment and Allocate: Maintain clear segmentation between driver and non-driver costs.
4. Regular Benchmarking: Frequently compare your metrics (e.g., non-driver wages per mile or as a percent of revenue) with industry standards.
5. Continuous Refinement: Regularly update mappings to reflect operational changes.

By adhering to FreightMarks standards for non-driver compensation, carriers achieve enhanced financial transparency, meaningful industry benchmarking, and improved strategic decision-making. Standardized non-driver compensation data is not merely an accounting best practice; it’s a competitive advantage essential for long-term success.

Optimize Your Non-Driver Compensation Insights

Ready to gain deeper insight into your compensation costs? FreightMarks provides the tools to standardize non-driver compensation data effectively, ensuring your company remains competitive. To get started or to learn more, contact a KSMTA advisor using the form below.