Guide
Seasonal cash cushion: how many thin months can you carry?
Some months are lean. The truck payment does not care. The cushion is the money that stands between a slow month and a missed payment.
In short
- Start with fixed costs a month: payments, insurance, permits, software, yard.
- Cushion = fixed costs x months of cover you want to hold.
- Find your own thin months in last year's deposits. We do not claim to know your lane's season.
- Diesel has a seasonal pattern in public EIA data. It is one input among several.
Fixed costs set the floor
Variable costs fall when the trucks sit. Fixed costs do not. That is what the cushion has to cover. Think of the cushion in months: how many months of fixed costs do you want in the bank before a lean stretch?
The figure shows twelve months with the thin ones marked. Yours will not look like this, so pull your own deposits for the last 12 months. For diesel, the diesel seasonality page shows the month pattern in EIA weekly data: the cheapest months have been January, February and April, the dearest September, October and November, with a U.S. swing of 5.8 index points. That is fuel cost, not freight demand, so use it as one input. The cost per mile tool helps set your fixed cost base.
Small fleets feel a lean month harder because there is no second business line to cover it. A written target changes the conversation from "can we get through this month" to "are we above or below the line", which is easier to act on.
Size the cushion
Add fixed costs
Truck payments, insurance, permits, ELD, software, yard, loan interest.
Mark your thin months
Look at 12 months of deposits. Circle the lowest ones and note why.
Pick months of cover
1, 2 or 3 months of fixed costs, depending on how thin they run and how fast you recover.
Check the timing
Money for a slow month often arrives late. Add the days to pay.
Build it by rule
Set aside a fixed share of each deposit in a separate account until the target is met.
Cushion at different levels of cover
| Months of cover | Fixed costs a month | Cushion |
|---|---|---|
| 1 month | $8,000 | $8,000 |
| 2 months | $8,000 | $16,000 |
| 3 months | $8,000 | $24,000 |
Worked example EXAMPLE VALUES
Example data. Fixed costs $8,000 a month. Normal month deposits $30,000. A thin month brings $15,000. Variable costs scale with revenue at 60%.
| Line | Normal | Thin month |
|---|---|---|
| Deposits | $30,000 | $15,000 |
| Variable costs (60%) | $18,000 | $9,000 |
| Fixed costs | $8,000 | $8,000 |
| Left over | $4,000 | -$2,000 |
$30,000 - $18,000 - $8,000 = $4,000 left in a normal month, and $15,000 - $9,000 - $8,000 = -$2,000 in the thin one. Two thin months in a row cost $4,000. That is the order of magnitude your cushion has to hold, and the numbers are invented.
Cushion mistakes
- Counting the credit line as savings. It can be cut or capped. A cushion in your own account stays.
- Using last month as the norm. Look at 12 months. One good month hides the thin ones.
- Forgetting the payment delay. Work done in a thin month is paid later. Plan the timing, not only the total.
- Never refilling. After a draw, restart the transfer rule until the target is back.
Copy and fill in
Keep it factual and short. Save the reply with the load file.
A cushion is not the same as a credit line
A line of credit can disappear when you need it. A cushion in your own account cannot. Both have a role. Price the credit line and write down what it needs from you.
We do not give legal, tax or financial advice. Your contracts come first.
Questions
How many months of cover is enough?
There is no right number. It depends on how thin your thin months are and how fast you recover. Use your own history.
Does diesel seasonality tell me when freight is slow?
No. It describes fuel prices, not demand. See the freight season planner for the other angle.
Should the cushion earn interest?
That is a financial choice we do not advise on. Ask an accountant or adviser.
What if I cannot build one?
Start small: a fixed share of each deposit. Even one month of cover changes what a bad week means.
Related: diesel seasonality, freight season planner, 13 week cash flow, cash flow simulator, diesel price shock, all guides.
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