Where
equipment is used for both the linehaul and local pickup and delivery
activities, an allocation must be made to charge each activity with vehicle
costs. Carrier’s
not making such an allocation in their own accounting systems may utilize TCG’s
Inter-use of Vehicle Adjustment when processing their general ledger files.
The
general ledger processing routine makes the allocation by prorating all vehicle
expenses based on linehaul vs. P&D miles.
However, optional fields to refine the allocation can be utilized as
well:
Average Linehaul
Miles per Gallon (MPG), and
Average P&D
Miles per Gallon (MPG)
and/or
Average
Linehaul Miles per Hour (MPH), and
Average P&D
Miles per Hour (MPH)
These
fields follow the fields for linehaul and P&D miles which appear on the general ledger processing
settings screen, when the inter-use of vehicle
adjustment is specified in the processing settings.
If
miles per gallon averages are entered, the fuel component of vehicle
costs will be allocated using fuel usage (Miles/MPG) rather than strictly on a
mileage basis.
This generally allocates more fuel cost to pickup and delivery,
recognizing the poorer fuel efficiency experienced in that activity.
Miles
per hour, if entered for both activities, will be used to adjust vehicle
depreciation partially on a driving time basis (Miles/MPH) rather than only on
miles, reflecting the poorer speeds generally experienced in the P&D
activity. This
applies 25% of depreciation based on time, the other 75% based on mileage, which
is an industry standard for application of vehicle depreciation (the mix can be
modified if desired - contact TCG).
Both
sets of averages must be developed and provided from internal data and studies.
When entered, the averages are saved and used each time a general ledger
is processed.
Other
vehicle costs such as tires, supplies and maintenance will still be allocated to
the two activities based on miles.
Updated February, 2005