Cost per mile
Also called CPM
Cost per mile is your total operating cost divided by total miles driven, and it is the break-even figure every rate decision should be measured against.
Last reviewed · by the fleetchart dispatch desk
A complete cost per mile includes fixed costs that accrue whether the truck moves or not — truck payment, insurance, permits, software, accounting — and variable costs that scale with distance, chiefly fuel, maintenance, tyres and tolls.
Two things push most calculations wrong. The first is forgetting irregular expenses: tyres, major services and annual filings do not arrive monthly but they arrive. Amortising them across the year keeps good months from looking better than they are. The second is leaving out owner compensation and self-employment tax, which makes the business look profitable while the owner is unpaid.
Once the figure is honest it changes how you work: you have a floor to negotiate from, and you can tell instantly whether a rate clears it.