Two Fleets, the Same 83% Utilization, $208,000 Apart

Fleet utilization measures how much of your available vehicle capacity is actually working, and it is normally reported as one number across the whole fleet. That works when the fleet is homogeneous in how it is paid for. Almost none are. An enterprise operation typically runs owned vehicles carrying a fixed daily cost whether they move or not, contracted capacity billed per use against a minimum commitment, and spot capacity bought by the movement. Those three have opposite relationships between utilization and cost, and averaging them produces a number that cannot distinguish a cheap plan from an expensive one.

The demonstration is short. Two allocations of the same demand across the same fleet both report 83% utilization and differ by $208,000 a year. Locus, the world’s first Decision-Intelligent, Agentic TMS, allocates across owned fleet, contracted transporters and a network of more than 1,000 carriers in a single decision, which is the level at which the mix, rather than the average, can actually be chosen.

Why one target is wrong for three cost structures

Start with what utilization is actually measuring in each tier, because the three are not variants of the same thing.

Owned capacity is the only tier where high utilization is unambiguously good, because the cost is incurred whether the vehicle moves or not. Spread a $300 fixed daily cost across fewer used days and the effective cost per working day rises sharply.

Moving owned utilization from 85% to 95% saves $37.15 per vehicle per day. Across 60 owned vehicles over 260 operating days that is roughly $580,000 a year, and it is invisible to a fleet-wide target because the fleet-wide number can be satisfied several other ways.

Spot capacity sits at the other extreme. If you buy a movement, you use that movement, so utilization is 100% by construction. Any spot number below 100% means the arrangement is not really spot, because something was reserved or committed. Prices in that tier also move independently of your fleet: peak surcharges tied to a volume baseline mean exceeding it by 200% can triple or quadruple per-package fees, so the right spot question is what it costs today, not how fully it was used.

The demonstration

Take a fleet of 60 owned vehicles at a $300 fixed daily cost plus $60 when used, and 30 contracted vehicles at $280 per use against a 20-vehicle minimum commitment. Demand is 75 vehicle-days.

Both report 83%. The second costs $800 a day more, or $208,000 across a 260-day year, because it moved work onto capacity billed per use while leaving owned vehicles idle whose cost was incurred anyway. A manager judged on the blended number is indifferent between them. A manager judged on cost is not. And the difference is not a rounding artifact of the example: it scales with the gap between the fixed component of owned cost and the per-use rate of contracted capacity, which is to say it is largest exactly where an operation has invested most heavily in its own fleet.

The second allocation is also the one a uniform target encourages, because balancing the tiers is the most direct way to make every line of a utilization report look consistent. The metric rewards a plan that costs more.

The mix is also moving in the direction that makes a blended number less informative. Armstrong & Associates put US 3PL gross revenues at $323.4 billion in 2025 against net revenues of $138.2 billion, and the American Trucking Associations reports almost 580,000 active US motor carriers as of June 2025, of which 91.5% operate 10 or fewer trucks. As enterprises shift capacity toward contracted and sourced tiers, the owned share, which is the only tier where utilization straightforwardly means what people think it means, shrinks. A fleet-wide number therefore describes less of the operation each year while looking unchanged, which is the same failure as reporting a single figure and calling it coverage.

Underlying cost makes the error larger over time, with ATRI’s 2026 report putting the industry-average cost of operating a truck at $2.336 per mile in 2025, a record for the series and 3.4% above the prior year.

How to set utilization targets that mean something

1. Segment the fleet by cost behavior, not by vehicle type

Vehicle class segmentation is already common and it answers a different question, which is what a given asset can physically do. Cost behavior answers what a percentage point of utilization is worth on that asset. Both matter and only one is usually in the reporting.

2. Set the owned target from service capacity, not from a benchmark

Owned utilization should run as high as service reliability permits, because every unused day is a full fixed cost recovered from nothing. The binding constraint is the slack needed to absorb exceptions, not an industry band. Find the point where on-time performance starts to degrade and set the target just below it.

Finding that point is a query rather than a study. Plot daily owned utilization against same-day on-time performance over a year and the relationship is usually flat until a threshold and then falls away. That inflection is your ceiling, it is specific to your network density and exception rate, and it will not match a published band. Operations that skip this step adopt a benchmark from a different mix and either leave money on the table or run without the slack their service level needs, and both errors look identical on the dashboard.

3. Set the contracted target from the commitment, not from a percentage

If you have committed to twenty vehicles, the meaningful target is using twenty. Utilization above that is a sourcing decision rather than an efficiency one, and utilization below it means you are paying for capacity you did not take, which is a contract problem rather than a planning one.

4. Stop reporting spot utilization

It is always 100% or the tier is mislabeled. Replace it with price per movement against a benchmark, which is the number that actually varies and the one a buyer can act on.

5. Report cost per used vehicle-day alongside utilization

This is the measure that distinguishes the two allocations above, and it takes one additional column. Utilization tells you how full the fleet was. Cost per used vehicle-day tells you whether being that full was the cheap way to serve the demand.

6. Make allocation order explicit

The allocation sequence is a policy decision worth writing down. Owned-first is usually correct because the cost is already committed, but not always: where owned capacity is needed later in the day for a higher-value movement, holding it is right. What fails is having no stated order, which means the sequence is decided by whichever planner is on shift.

The order should also change with the season. Through peak, contracted and spot capacity is both scarcer and more expensive, so the value of having used owned capacity first rises, and holding owned vehicles in reserve for late volume becomes more defensible than it is in a normal week. An allocation policy written once and never revisited is calibrated for the eleven months when the decision matters least.

What a tiered utilization report looks like

Four tiers of reporting replaced by one blended percentage is how the $208,000 stays invisible. Most operations already hold every field in this table somewhere, usually across a finance system, a contract file and a planning tool, which is why the gap is a reporting one rather than an instrumentation one. Splitting it costs a reporting change and no new data.

The one addition worth making is a cost column beside each utilization figure, because that is what converts the report from a description into a decision. A tier running below target with a falling cost per used vehicle-day is performing well and a tier at target with a rising one is not, and a percentage alone cannot express either.

Five questions about your utilization number

What proportion of your fleet is owned, contracted and spot? If the split is not in the report, the blended number is averaging three different economics without saying so.

What is your cost per used vehicle-day, by tier? This is the number that separates a full fleet from an efficient one, and it is rarely reported alongside utilization.

Is your contracted minimum being consumed? Unused commitment is pure loss and it does not appear as poor utilization, because the vehicles were never counted as available.

What is your stated allocation order? If nobody can name it, the mix is being decided by habit, and the mix is where the money is.

At what utilization does your on-time performance start to degrade? That is your real owned-fleet ceiling. An industry band is a starting point, not an answer.

What this looks like in enterprise deployments

A Fortune 50 parcel operation running centralized dispatch across a 120-country network and 51 sites surfaced more than $14 million of unused capacity, including $565,000 at a single site, while lifting weekly execution adherence from 75% to 92%. The driver pool splits between captive and third-party, which is exactly the mixed-economics condition described here, and unused capacity of that size accumulates precisely because a blended number does not show which tier it sits in or what it costs to leave it idle.

A leading North American retailer running multimodal logistics automation across several hundred stores replaced six legacy systems, achieved 99%-plus on-time store delivery with 95%-plus route compliance, and broke even in year one. Replacing six systems removes six separate places where a tier-level utilization figure could be computed differently, which is a prerequisite for the tiered report above being comparable across the network.

Four mistakes enterprises make on fleet utilization targets

Applying one target across three cost structures. It is the default because it is the simplest thing a dashboard can show, and it gives the same score to allocations that differ by six figures a year.

Benchmarking owned utilization against an industry band. Bands describe what others achieve on a different mix. Your ceiling is set by the slack your service level needs, which is measurable in your own data.

Reporting spot utilization at all. It is 100% by construction. A number below that means something was committed, and the report is describing a tier it has mislabeled.

Treating unused contracted commitment as a utilization problem. It is a contract sizing problem. It shows up nowhere in a utilization figure because those vehicles were never in the available count.

How Locus allocates across tiers rather than averaging them

Locus, the world’s first Decision-Intelligent, Agentic TMS, decides allocation per shipment across owned fleet, contracted transporters and a network of more than 1,000 carriers, against live cost and serviceability rather than against a utilization target. That distinction matters here, because an engine optimizing cost will naturally use committed capacity before paid-per-use capacity without needing a utilization rule to tell it to.

Transporter Management holds contract lifecycle and rule-based allocation on cost, speed, zones, contract and performance, which is where a minimum commitment becomes a constraint the planner can see rather than a number finance reconciles later. Because the route planning system re-optimizes in roughly two minutes against more than 250 real-world operating constraints, the mix can be revisited as demand firms up rather than fixed at the start of the day, which is when most of the expensive tier decisions are made. Explainability and Traceability record the trigger, context, reasoning, action and outcome of each allocation, so the cost consequence of a tier choice is recoverable afterwards rather than inferred.

Two boundaries belong here. Locus does not set your fleet mix, and whether you should own 60 vehicles or 40 is a capital decision informed by cost-to-serve analysis rather than produced by a planning engine. And the platform optimizes against the costs you give it, so if owned vehicles are loaded into the system at a blended per-use rate that hides their fixed component, the allocation will be wrong in exactly the way this article describes. Getting the cost model right is an implementation task with a real outcome attached.

Locus supports more than 360 enterprise customers across 30-plus countries, with over 1.5 billion deliveries optimized, more than $320 million in documented client logistics savings and 99.99% uptime. It has been recognized by Gartner for seven consecutive years, featured in the 2026 Hype Cycle for Supply Chain Execution and Logistics Technologies, named a Leader in TMS by QKS Group (SPARK Matrix), and ranked #1 in Route Planning on G2’s 2026 Best Software Awards.

In October 2025, Ingka Investments, the investment arm of Ingka Group, the world’s largest IKEA retailer, acquired Locus. Locus continues to operate independently.

So what utilization should an enterprise fleet target? A different one per tier, because the three tiers have opposite cost behavior. Owned capacity carries its cost whether it moves or not, so the target is as high as service allows, and the effective cost per used vehicle-day falls from $412.94 at 85% utilization to $375.79 at 95%, worth around $580,000 a year across 60 vehicles. Contracted capacity should be measured against its minimum commitment rather than a percentage. Spot utilization is 100% by construction and should not be reported at all. The reason this matters is that a blended figure cannot distinguish a cheap plan from an expensive one: two allocations of identical demand both report 83% and differ by $800 a day, or $208,000 a year, with the more expensive one being the version a uniform target actively encourages. Locus allocates per shipment across owned, contracted and 1,000-plus carrier capacity against live cost rather than against a utilization target, holds commitments as constraints through Transporter Management, and re-optimizes in roughly two minutes so the mix can be revisited as demand firms. Request a Locus assessment to compare your own allocations at equal utilization.

Frequently Asked Questions

Why should owned and contracted fleets have different utilization targets? Because their costs behave oppositely. Owned capacity carries a fixed daily cost whether it moves or not, so every unused day is unrecovered cost and the target should be as high as service allows. Contracted capacity is billed per use, so utilization above the minimum commitment is a sourcing decision rather than an efficiency gain.

What is the right target for spot capacity? There isn’t one. You buy movements and use them, so utilization is 100% by construction. A spot figure below 100% means something was reserved or committed, and the tier has been mislabeled. Track price per movement instead.

How can two plans with the same utilization cost different amounts? Because the mix differs. On 75 vehicle-days of demand, an owned-first allocation runs owned at 100% and contracted at 50% for $27,200 a day, while a balanced one runs both at 83% for $28,000. Both report 83% blended, and the second costs $208,000 more a year.

What does moving owned utilization from 85% to 95% actually save? Effective cost per used vehicle-day falls from $412.94 to $375.79, a saving of $37.15 per vehicle per day. Across 60 owned vehicles and 260 operating days that is roughly $580,000 a year.

What should we report instead of a single utilization number? Utilization by tier, cost per used vehicle-day for owned, commitment consumed for contracted, and price per movement for spot. It is a reporting change rather than a data collection project, and it is what makes the mix visible.

Why does a uniform target make things worse rather than just failing to help? Because balancing the tiers is the easiest way to satisfy it, and balancing moves work onto capacity billed per use while leaving already-paid-for vehicles idle. The metric actively rewards the more expensive allocation.

How do we find our real owned-fleet ceiling? Measure the utilization level at which on-time performance starts to degrade in your own data. That is the point where slack stops being waste and starts being the buffer that absorbs exceptions, and it is more reliable than any published band.