Each month, FreightMath calculates a forecasted overhead allocation using a workday-based approach instead of spreading costs evenly across the calendar. We start with the prior month’s total overhead from the general ledger and divide it by the number of effective workdays in the current month. That produces a daily overhead rate that:
As the month progresses, FreightMath accrues forecasted overhead by the effective workday. At month-end, that accumulated amount is allocated down to freight based on hours on delivered loads. Loads that consume more driver or asset time carry a proportionally larger share of overhead, while light-touch loads carry less.
Once actual monthly financials are available, FreightMath recasts these forecasted allocations to actuals for all cost buckets (overhead, variable, and other operating costs). This ensures that reported OR, margins, and profitability by lane or customer tie back to the general ledger while preserving the operational insight provided by the Workday Model.
A simple calendar-day method treats every day the same, whether it is a Tuesday linehaul day or a holiday Sunday. That approach distorts month-to-month performance, especially in months with major holidays or unusual day patterns. The Workday Model corrects this by weighting each day type based on its relative activity and then allocating overhead in line with the number of effective workdays that have actually occurred.
November is a good illustration of why the Workday Model matters. Even though it has 30 calendar days, its pattern of weekends and holidays creates fewer effective workdays than a typical month:
When those weights are applied, November has about 22.5 effective workdays compared with roughly 26 in October and 24.5 in September. December, with Christmas and associated downtime, will run closer to 24.25 effective workdays.
As of November 8, roughly 6.25 of 22.5 effective workdays have already elapsed—about 28% of the month. Under the Workday Model, that means about 28% of monthly overhead has already been allocated. If the first week’s volume or revenue is soft, that front-loaded overhead will temporarily worsen your Operating Ratio (OR), even though the full month may still perform to plan.
Looking ahead, if you expect higher utilization, stronger volume, or better rates through the remaining workdays, this timing effect will naturally normalize by month-end. The model simply makes that compression visible, so you can explain short-term OR pressure without overreacting to a few slow days.
Total_OH_GL).pct_workdays = weighted_days_elapsed ÷ weighted_days_in_month).OH_MTD = Total_OH_GL × pct_workdays.| Day Type | Weight | Example |
|---|---|---|
| Monday–Friday | 1.0 | Full activity |
| Saturday | 0.5 | Reduced activity |
| Sunday | 0.25 | Minimal activity |
| Holiday | Variable | Veterans Day 1.0; Christmas 0.0 |
OH_per_weighted_day = Total_OH_GL ÷ weighted_days_in_month
OH_MTD = Total_OH_GL × (weighted_days_elapsed ÷ weighted_days_in_month)
OH_per_load = OH_MTD × (load_hours ÷ Σ all_delivered_load_hours_MTD)
October: 26 weighted days → $2,400,000 ÷ 26 = $92,308/day
November: 22.75 weighted days → $2,400,000 ÷ 22.75 = $105,495/day
With fewer working days, overhead per day increases even though total OH is constant.
Weighted days in November = 22.75; through Nov 10, 8.25 days elapsed → pct_workdays = 8.25 ÷ 22.75 = 0.3626
Allocated MTD OH = $2,400,000 × 0.3626 = $870,240
This calculator compares October (higher weighted workdays) with December (lower weighted workdays) and shows:
Note: OR (Operating Ratio) = Total Operating Costs ÷ Revenue. For October, if variable expense is blank, the calculator backs into variable expense that produces a 97% OR. December then applies the same variable-expense percentage to its revenue, with revenue scaled to reflect fewer weighted workdays.
Overhead compression will occur whether you want it to or not, however there are proven ways to “fight back.” The Workday Model simply makes it visible sooner. The question for leadership is how to respond proactively so that a compressed month still lands at or above target OR.
Use driver-choice productivity bonuses to encourage drivers to take additional freight when it makes sense for them.
All incentives will respect Hours-of-Service and home-time commitments. The goal is to reward drivers who choose to lean in when the network needs coverage, not to force additional work.
One week before the start of each month, hold a cross-functional “productivity planning” session that:
Going into a compressed month with a plan and a numeric goal is far more effective than reacting mid-stream to a noisy first week.
Explore opportunities to shift cost structures from fully fixed to per-transaction, per-load, or other activity-based models, but only where there is a clear, measurable cost advantage. Examples include:
The objective is to make more of your overhead behave like variable cost without increasing total spend. Acknowledging this is easier said than done.
Include your non-asset team in the productivity planning conversation. Ask explicitly how they will:
Non-asset growth and better contribution per non-asset load can offset some of the OR pressure created by compressed workdays on the asset side.
These actions do not change the fact that overhead is fixed for the month, but they directly influence how much productive revenue and contribution you generate from the remaining workdays to offset that overhead consumption. Combined with the Workday Model, they turn overhead compression from a surprise into a managed risk with a clear playbook.
© FreightMath · Workday-weighted Overhead Allocation · Updated Nov 2025