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 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.