I used to worry constantly that I was not figuring our CPM correctly. What if I was doing this wrong? I asked questions of everyone I knew and even attended a conference with just this thought in mind – I am finally going to learn how to figure my CPM right! Never mind that I was paying all of our bills and our savings was growing I still might be doing something wrong. Wow, was I in for a surprise. The correct answer is there is no RIGHT way. I knew exactly what our expenses are for the truck, I know how many miles we drive, and I know how much we make that is all I needed to know. There is no magic formula to know your CPM. When I first started I knew what I needed to pay us, what our fixed expenses were and then as time went on I learned what our other expenses would be. I keep a spreadsheet by the month for our fuel costs and update from month to month what our CPM is for fuel (miles/gallons). I figure all of our expenses, including what I pay us and what I put back for replacement cost and maintenance for the truck. I have always used a budget to keep track of our expenses. At the end of each month and at the end of the year I run a profit and loss statement from Quicken. From the P/L statement I take our miles and can easily figure our costs. I do the same for the year to get a broader picture of what our running costs are.
The longer I have our business the easier I have found it to keep track of our cost per mile.
My bottom line on what I finally learned was have a budget and when you make more then you have budgeted for save it as you will need it in a short month.
Bob & Linda Caffee
Leased to: FedEx Custom Critical
Saint Louis MO
Expediters 5 years been out here on the road ten years
isn't just trucking, it's a lifestyle;
Expediting isn't just a lifestyle, it's an adventure;
Expediting isn't just an adventure, it's a job;
Expediting isn't just a job, it's a business.
Comments - Tell us what you think below
03 Feb 2010, 15:21
04 Feb 2010, 13:27
You are correct in saying that there is no RIGHT way to figure CPM. At first look if a person figures all their expenses then divide it the miles driven, the higher the miles the less per mile, ie 120,ooo vs 220,000 miles will yield a lower CPM but then other costs will rise, maintenance and truck replacement.
CPM is only one way I figure our expenses. CPD (Cost per Day) is just as important. You can go BROKE hauling $3.00 per mile freight. We had a load the company sent us all the time when we were at home. They called on Monday for a pickup on Tuesday for a delivery on Wednesday. It took nearly all day to get the load off the truck and we ended up nearly 200 miles to the nearest express center. The load paid about $800.00 and went about 270 miles. That revenue barely covered our CPD.
So any time people talk about CPM you also need to figure in CPD also.
04 Feb 2010, 15:24
CPD in the expedite world to me can quickly become more important the PPM in the expedite world. The five dollar a mile load that only goes a few miles in the afternoon very seldom pays enough for per day pay.
Great point thanks for bringing that up!