Question: How To calculate the cost per mile for Your trucking Company?
- Thread starter sam
- Start date
- Joined
- Oct 30, 2022
- Messages
- 55
To calculate the cost per mile for your trucking company, you must consider various truck operating expenses. Here are the steps to calculate the cost per mile:
Determine fixed costs: These expenses do not vary based on the number of miles driven. Examples include truck payments, insurance, permits, licenses, and base salaries. Add up all these fixed costs for a given period, such as a month or a year.
Calculate variable costs: Variable costs are expenses that depend on the number of miles driven. They typically include fuel, maintenance and repairs, tires, tolls, and variable driver wages (if applicable). Keep track of these costs separately for the same period as the fixed costs.
Calculate total costs: Add the fixed costs to the variable costs to obtain the total costs for the specified period.
Determine the total miles driven: Calculate the total number of miles driven during the same period. This information can be obtained from your fleet management system or by summing up the individual distances traveled by each truck.
Divide total costs by total miles driven: Divide the total costs (from step 3) by the total miles driven (from step 4). The result will be the cost per mile for your trucking company.
Here's the formula:
Cost per mile = (Total fixed costs + Total variable costs) / Total miles driven
Remember to use consistent units for costs and distance (e.g., dollars and miles) in your calculations.
By calculating the cost per mile, trucking companies can better understand their expenses and make informed decisions about pricing, route optimization, and overall financial management.
Determine fixed costs: These expenses do not vary based on the number of miles driven. Examples include truck payments, insurance, permits, licenses, and base salaries. Add up all these fixed costs for a given period, such as a month or a year.
Calculate variable costs: Variable costs are expenses that depend on the number of miles driven. They typically include fuel, maintenance and repairs, tires, tolls, and variable driver wages (if applicable). Keep track of these costs separately for the same period as the fixed costs.
Calculate total costs: Add the fixed costs to the variable costs to obtain the total costs for the specified period.
Determine the total miles driven: Calculate the total number of miles driven during the same period. This information can be obtained from your fleet management system or by summing up the individual distances traveled by each truck.
Divide total costs by total miles driven: Divide the total costs (from step 3) by the total miles driven (from step 4). The result will be the cost per mile for your trucking company.
Here's the formula:
Cost per mile = (Total fixed costs + Total variable costs) / Total miles driven
Remember to use consistent units for costs and distance (e.g., dollars and miles) in your calculations.
By calculating the cost per mile, trucking companies can better understand their expenses and make informed decisions about pricing, route optimization, and overall financial management.
