LESSON 1 / 5 12 MIN
True Cost-Per-Mile & Profitability
01All-mile costing
All loaded, empty (deadhead), and repositioning miles belong in a true trip-cost calculation.
02Build a complete cost ledger
Separate fixed monthly costs (truck/trailer payments, insurance, permits, software and allocated overhead) from variable costs (fuel, tires, repairs, tolls and driver compensation). Owner driving still has a labor cost: include a realistic wage before calling the remainder profit. Divide fixed costs by realistic monthly total miles—not optimistic loaded miles alone.
03Price the whole trip
Total miles = loaded miles + deadhead + repositioning. For a truck with $6,000 monthly fixed cost and 10,000 total miles, fixed CPM is $0.60. If variable CPM is $1.50, break-even CPM is $2.10. A 300-mile round trip therefore costs $630 before an operating profit allowance, loading delays or special disposal charges.
04Fuel surcharge and minimum rate
Fuel adjustment per mile = (current diesel price − agreed base price) ÷ agreed MPG, applied to the billable mileage defined in the contract. At $4.00 current fuel, $3.00 base and 6 MPG, the adjustment is about $0.167/mile. A surcharge is not automatic revenue: negotiate its basis and review interval. Minimum trip quote = total costs ÷ (1 − target operating margin); at 15% margin, $630 ÷ 0.85 = $741.18.
05Convert to tons without hiding risk
At 24 billable net tons, a $741.18 trip quote is $30.88/ton. For a ton-mile agreement, divide by billable tons × agreed loaded miles, not by total miles unless the contract says so. Specify minimum tonnage or minimum trip pay, disposal fees, wait time, rejected material and return-trip responsibilities. Recalculate when diesel, payload or cycle time changes.
FIELD EXERCISE
Build a 300-mile round-trip quote using $2.10 all-mile CPM, 24 net tons and a 15% operating margin. Write a minimum-trip term for an underweight load.
A good-looking loaded-mile rate can lose money once empty miles and unpaid time are counted.
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