Bottom-up vs top-down
Top-down (last year + inflation) is fast but wrong. Bottom-up: project miles per unit × age-adjusted CPM per unit + scheduled overhauls + tire replacement schedule. Aggregate, then add 8–12% contingency.
Half of fleet budgets miss by 15%+ in year one. Here's how to build one that doesn't.
Most budgets are last-year-plus-5%. That ignores aging fleet curves, fuel volatility, and parts inflation — and explains the variance.
Top-down (last year + inflation) is fast but wrong. Bottom-up: project miles per unit × age-adjusted CPM per unit + scheduled overhauls + tire replacement schedule. Aggregate, then add 8–12% contingency.
Year 1–2: 0.7x baseline. Year 3–4: 1.0x. Year 5–6: 1.4x. Year 7+: 1.7x+. Build in the curve explicitly so an aging fleet doesn't blow the budget.
Reserve monthly for: overhauls (~$25K/tractor at 600–800K mi), DPF replacements ($4–6K), transmissions ($10–15K), tire campaigns. Spreading these makes monthly P&L stable.
For modern Class 8 OTR, $15K–$25K/year all-in is the typical range. Year 5+ units commonly run $30K+.
8–12% on top of your bottom-up build. Less if your fleet is uniform and young; more if mixed age or specialized.