ProfitCenter/CIS™
is a module of the TCG Cost Information System that produces freight terminal Profit and Loss (P&L) statements. Traditional Terminal P&L Statements have always suffered
due to revenue allocation inequities. This
is because the they rely on a fixed division of revenue
(usually 50-50) between origin and destination freight terminal, as well as
allocations of rehandling (breakbulk), linehaul and other non-terminal expenses,
which can be arbitrary.
Since cost incurrence for specific shipments rarely occurs in the same ratio as the revenue split, Traditional P&L Statements will always distort the measurement of freight terminal performance and profitability. Terminals with more outbound will “perform” better than terminals with more inbound. Terminals serving larger areas will “perform” worse than terminals serving smaller areas. When measured using traditional terminal P&Ls, terminals will look better or worse for these and a variety of other reasons related solely to freight mix and area served, and not to actual revenue quality or performance.
Transportation
Costing Group’s ProfitCenter/CIS™ module makes use of the TCG Traffic/CIS
ability to cost all freight on an ongoing basis.
This software creates Terminal P&L Statements by dividing
the revenue on each individual shipment using standard cost as the basis.
Thus, shipment-by-shipment, the revenue allocated to a freight terminal
will reflect an appropriate share
rather than an arbitrary division. Terminals
performing intermediate rehandling (breakbulk) operations also receive a
cost-based revenue allocation for this activity, rather than requiring complex
accounting mechanisms to identify, split and “re-bill” these expenses to
origin and destination terminals.
ProfitCenter/CIS™
will make revenue allocations as part of the monthly Traffic/CIS processing and
produce a Terminal P&L Statement each month that is a better measure of
freight terminal performance than any fixed revenue allocation method could
produce.