ExpeditersOnline.com
Try Hours
Bolt Express
Page 1 of 4 123 ... LastLast
Results 1 to 15 of 50
  1. #1
    Member
    Join Date
    Feb 2008
    Location
    Fort Wayne
    Posts
    30

    Knowing your cost per mile

    Someone, on one of my other threads, brought up the cost per mile factor.

    I thought we could start another thread and maybe discuss this issue - because to me, this is THE MOST CRITICAL step every owner of one truck or 500 trucks MUST KNOW!

    For instanance I know, that we have a sprinter that will have a cost per mile average of .67-cents per mile based upon driving 1,500 miles per week for 50 weeks.

    On the other hand, our straight truck will have a cost per mile average of $1.23 per mile based upon driving 1,500 miles per week for 50 weeks or an average of $1.13 per mile driving an average of 2,000 miles during 50 weeks.

    These figures represent truck payments, insurances, phones, permits, projected food cost, tolls, repairs, maintenance cost and all the other typical items you would use on a spread sheet to figure out these figures.

    These figures represent our cost before we pay ourself (or a driver) any salary.

    Without these figures you really do not have a grasp on what your operation is doing, weather you have one truck running under a carrier's authority or you have your own authority with several trucks.

    Do you know yours?
    Greg McClain

  2. Tractor Drivers and O/Os
    Premium Transportation Logistics
    Semi Drivers Weekly Pay + Benefits Apply here for Premium Transportation Logistics LLC Company Tractor OR Owner Operator positions! https://intelliapp2.driverapponline.com/c/premiumtrans WORK WEEK BASED ON 7 DAYS AND MAY INCLUDE WEEKENDS (Home time off is generally every other weekend. May be more depending on freight volumes and where driver lives). PAY INCREASE AFTER 90 DAY PROBATIONARY PERIOD. BONUS WEEKS OFFERED AS INCENTIVES. INCREASE DEPENDENT ON PERFORMANCE REVIEW. DRIVERS ARE PAID WEEKLY VIA DIRECT DEPOSIT. EMPLOYEE STATUS (W-2) MEDICAL INSURANCE (Driver pays portion of premium. Driver eligible after probationary period). HOLIDAY PAY 401k RETIREMENT PLAN VACATION PAY PERFORMANCE REVIEW AFTER 90 DAYS, AND AT LEAST ONCE A YEAR THEREAFTER. Prefer drivers are based in the Tri-State area. To obtain additional info please call Recruiting & Safety at 419-861-3430 ext. 207. Ask for Brian.
     

  3. 1,249889,31481,7
  4. #2
    Senior Member
    Join Date
    Sep 2005
    Location
    .
    Posts
    121

    Re: Knowing your cost per mile

    Good Post. I do know mine but it is amazing that most drivers do not. I try and keep it simple when I explain to drivers. Just add your fuel and divide by mileage and your cost and that is your running number, Add tolls, food, whatever and use the same formula. you would be surprised to see the faces of the guys who run 60/40 and split the FSC with an owner on how much it actually costs them to run. They think twice about accepting that 1.20 per mile load.

  5. 2,249894,31481,7
  6. #3
    LDB
    LDB is online now
    14K Member LDB's Avatar
    Join Date
    Sep 2004
    Location
    Texas, U.S.A.
    Posts
    14,728

    Re: Knowing your cost per mile

    This has been discussed many times with good debate over what's included. I do not include food because eating isn't a cost that's only required because of being out in the truck. I do that at home too. I don't include my cell phone because I'd have it no matter what I was doing. Those costs are part of my personal budget not truck budget.
    It's okay if you disagree. I can't force you to be correct.

  7. 3,249895,31481,7
  8. #4
    Senior Member
    Join Date
    Sep 2005
    Location
    .
    Posts
    121

    Re: Knowing your cost per mile

    Leo, my point was that you can add just about anything to calculate costs. I do not figure food... just fuel, oil, insurance, maintainance etc. I can tell you in each of the 4 categories I track what my costs are and guess what... they have all gone up a bunch Have a nice holiday.

  9. 4,249896,31481,7
  10. #5
    Senior Member
    Join Date
    May 2003
    Posts
    7,724

    Re: Knowing your cost per mile

    The obvious benefit of knowing your cost per mile is knowing your cost per mile. An additional benefit is it helps keep your eye on the ball.

    It is easy to get sidetracked with general talk about fuel prices, market trends, what other drivers are doing, what carriers are doing, etc. What may seem to be a business conversation yields no useful information at all.

    More to the point is the money you are making (or not making) relative to the money you spend to operate your truck or your fleet owner's truck. Cost per mile puts the business spotlight where it can be most useful; directly on you.

    Truck stop lunch counter visits, CB comments and telephone chats with like-minded people may provide some comfort. Taking the time and effort to calculate your cost per mile will provide the information you need to make profitable business decisions.
    Expediter 2003-2013. Straight truck. The husband half of a husband/wife team.

  11. 5,249904,31481,7
  12. #6
    18K Member greg334's Avatar
    Join Date
    May 2005
    Posts
    20,280

    Re: Knowing your cost per mile

    Get an accountant.

    If you are going to be in this business as a business with trucks and all that, line up the professionals to advise you.

    Leo, I do include food on the road to a point and also my cell phone bill. I take a percentage of the cost of the food off the top of the total cost of food because it is far less for me to eat at home than it is on the road - the remainder is rolled into the overall operating cost of the truck. There is no need for me to have a cell phone or an air card at home, so it is rolled directly into the CPM as a needed expense.

    Now here is something that I have been asked, what do you do with those pesky accessorial fees? Are they counted against the actual operating cost of the truck or are they counted as part of the labor cost?

  13. 6,249909,31481,7
  14. #7
    Senior Member terryandrene's Avatar
    Join Date
    May 2004
    Location
    St. Peters, MO
    Posts
    2,928

    Re: Knowing your cost per mile

    Knowing your forecast CPM for an anticipated truck purchase, and your month to month CPM as you conduct your expedite business is one of the most important items needed to maintain an adequate profit margin.

    How you determine your CPM is often disputed. I don't believe the use of monthly payments alone is an accurate factor. If it was, your CPM would drop dramatically upon completion of loan payments.

    I use the cost of the truck over it's life cycle as an expediter. and for the purpose of discussion, I'll say five years and use the same 75,000 miles per year as used by mcclainlogis. A $50,000 Sprinter, financed at 6% for 5 years would have a total cost of $58,000. The Sprinter could be sold for $15,000 at the end of five years (the average price of 6 Sprinters listed in the EO classifieds). The Sprinter would have cost $43,000 or $8,600 annually, or 11.5 cents per mile. If, at some time you decide to keep the Sprinter in operation for six years, your CPM would be 9.5 cents.

    These CPM are a sharp contrast to using just payments which would be 15.5 cents for the first five years and 00.0 cents thereafter.

    Like Leo, I don't use food in my calculation because I would eat regardless. If you want to be a purist, add the difference between home cooked and restaurant cooked. Since we get a substantial tax deduction for standard meal allowance, the difference between home and restaurant isn't worth the time and effort to calculate.

    Unlike Leo. I deduct the base price of my cell phone as a must have business accessory.
    Terry and Rene'


    Cargo Van Owner/Operators.
    FedEx Custom Critical 1989 - 2008

  15. 7,249910,31481,7
  16. #8
    Senior Member
    Join Date
    Jan 2008
    Posts
    1,715

    Re: Knowing your cost per mile

    Quote Originally Posted by greg334 View Post
    Now here is something that I have been asked, what do you do with those pesky accessorial fees? Are they counted against the actual operating cost of the truck or are they counted as part of the labor cost?
    Are you talking about the accessorial 'revenues'? The added on things? Or are you talking about a fee you get charged, an expense?
    ".. please be careful when assuming things in this industry. Very few things will be a "pleasant" surprise."
    jansiemoo, May 19, 2011

  17. 8,249914,31481,7
  18. #9
    Senior Member
    Join Date
    Jun 2006
    Posts
    259

    Re: Knowing your cost per mile

    I downloaded a free cost per mile spread sheet from OOIDA. Its worth a try.

    Cost Per Mile Worksheet
    Last edited by EagleRiverWI; 05-25-2008 at 11:35 AM.

  19. 9,249915,31481,7
  20. #10
    Senior Member
    Join Date
    Jan 2008
    Posts
    1,715

    Re: Knowing your cost per mile

    I have a stupid question.
    If those 'cost per mile' or 'cents per mile' sheets are used, an expectation of miles driven must be given.
    If you're new, you won't necessarily know what to expect as far as miles offered, deadhead, etc.
    Even if you're not new, things can change..
    So how are these forms accurate?
    ".. please be careful when assuming things in this industry. Very few things will be a "pleasant" surprise."
    jansiemoo, May 19, 2011

  21. 10,249918,31481,7
  22. #11
    Senior Member
    Join Date
    Mar 2006
    Posts
    550

    Talking Re: Knowing your cost per mile

    Quote Originally Posted by mcclainlogis View Post
    Someone, on one of my other threads, brought up the cost per mile factor.

    I thought we could start another thread and maybe discuss this issue - because to me, this is THE MOST CRITICAL step every owner of one truck or 500 trucks MUST KNOW!

    For instanance I know, that we have a sprinter that will have a cost per mile average of .67-cents per mile based upon driving 1,500 miles per week for 50 weeks.

    On the other hand, our straight truck will have a cost per mile average of $1.23 per mile based upon driving 1,500 miles per week for 50 weeks or an average of $1.13 per mile driving an average of 2,000 miles during 50 weeks.

    These figures represent truck payments, insurances, phones, permits, projected food cost, tolls, repairs, maintenance cost and all the other typical items you would use on a spread sheet to figure out these figures.

    These figures represent our cost before we pay ourself (or a driver) any salary.

    Without these figures you really do not have a grasp on what your operation is doing, weather you have one truck running under a carrier's authority or you have your own authority with several trucks.

    Do you know yours?
    Add GOOD TIME MANAGEMENT.

    How does time management affect your bottom line? This is controlled by none other than the person stopping and going. This must be entered into the equation because it will vary your cost per mile. Think about it.

  23. 11,249919,31481,7
  24. #12
    Senior Member terryandrene's Avatar
    Join Date
    May 2004
    Location
    St. Peters, MO
    Posts
    2,928

    Re: Knowing your cost per mile

    pjjjjj.

    The CPM calculations are only as accurate as your last entry. In order for stay current you must frequently recalculate. People that haven't yet bought their first truck must research the industry as a whole and their preferred carrier specifically. Talk to recruiters and ask each of them for the mileage average you need to know; talk to owners of that carrier for their opinion of average mileage. You'll need to have a forecast cost per mile to know if the truck type and carrier will provide the revenues you need to maintain a profitable business.

    After you have a forecast CPM, you will continually adjust your working CPM as you develop real time figures for your particular circumstances; no two operators are likely to have identical CPM, so you need to develop your own data.
    Terry and Rene'


    Cargo Van Owner/Operators.
    FedEx Custom Critical 1989 - 2008

  25. 12,249924,31481,7
  26. #13
    Senior Member
    Join Date
    Jun 2006
    Posts
    259

    Re: Knowing your cost per mile

    Quote Originally Posted by pjjjjj View Post
    I have a stupid question.
    If those 'cost per mile' or 'cents per mile' sheets are used, an expectation of miles driven must be given.
    If you're new, you won't necessarily know what to expect as far as miles offered, deadhead, etc.
    Even if you're not new, things can change..
    So how are these forms accurate?
    On the downloadable worksheet you can lower the miles used, but you also will have to subtract a percentage of fuel and maitenance (variable expenses). New people will have to estimate on some things. It is a free and interesting tool to experiment with your numbers to see how low or high miles affect your cost. Look for the Excel links on the bottom to download.

  27. 13,249926,31481,7
  28. #14
    Senior Member
    Join Date
    Jan 2008
    Posts
    1,715

    Re: Knowing your cost per mile

    Thanks.
    So in effect, a real cpm can't be determined accurately until after the fact.
    How often would you adjust your figures to meet with reality? Monthly? Weekly? Quarterly?
    ".. please be careful when assuming things in this industry. Very few things will be a "pleasant" surprise."
    jansiemoo, May 19, 2011

  29. 14,249927,31481,7
  30. #15
    Senior Member
    Join Date
    Jun 2006
    Posts
    259

    Re: Knowing your cost per mile

    Quote Originally Posted by pjjjjj View Post
    Thanks.
    So in effect, a real cpm can't be determined accurately until after the fact.
    How often would you adjust your figures to meet with reality? Monthly? Weekly? Quarterly?
    You don't have to adjust your figures after a month (or week) in the business. You can use actual figures. On the OOIDA sheet you can take a month and multiply your variable costs by 12 to get your yearly totals.

  31. 15,249931,31481,7
Page 1 of 4 123 ... LastLast

Similar Threads

  1. How Many Know Their Cost Per Mile?
    By ATeam in forum General Expediter Forum
    Replies: 5
    Last Post: 09-12-2008, 01:19 AM
  2. Cost Per Mile
    By arkjarhead in forum The Newbies Paradise Forum
    Replies: 5
    Last Post: 02-16-2008, 06:21 AM
  3. What is your cost 2 run per mile?
    By DreamTeam44 in forum General Expediter Forum
    Replies: 39
    Last Post: 02-05-2008, 11:50 AM
  4. Mile cost
    By terryandrene in forum The Newbies Paradise Forum
    Replies: 3
    Last Post: 07-16-2006, 11:29 AM
  5. Cost Per Mile
    By RichM in forum General Expediter Forum
    Replies: 9
    Last Post: 02-26-2005, 10:12 PM

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
ExpeditersOnline.Com Copyright © 1999-2011 On Time Media, LLC. All Rights Reserved.
ExpeditersOnline.com © is a registered trademark of On Time Media, LLC

Search Engine Optimization by vBSEO 3.6.0 PL2