Guide

How to calculate your true cost per mile

Cost per mile (CPM) is the single most important number in your trucking business. It tells you the lowest rate you can accept on a load and still make money. Get it right and every booking decision gets easier. Get it wrong — or never calculate it — and you can run hard all year and still come up short.

The basic formula

CPM is just your total business costs divided by the miles you ran:

The trap is in "total costs." Most drivers count fuel and a few obvious bills, miss the rest, and end up with a CPM that's far too low. Here's everything that belongs in the number.

1. Fixed costs (you pay these even if the truck sits)

• •Truck and trailer payments (or lease)
• •Insurance — liability, physical damage, occupational
• •Permits, plates, and annual fees
• •ELD, load board, and phone subscriptions
• •Accounting or association dues

2. Variable costs (they rise with the miles)

• •Fuel — usually your single biggest expense
• •Maintenance and repairs (set money aside before they happen)
• •Tires — track them as their own line; they're a big recurring hit
• •Tolls, scales, and parking

3. Don't forget you

Your own pay and your taxes are real costs of doing business. If you don't build them into your CPM, you're quietly working for free. Add a reasonable salary for yourself and set aside for quarterly taxes.

Put it together

Add up every cost above for a period — a month is a good start — then divide by the miles you actually drove in that period. The result is your true cost per mile. Any load paying below that number loses you money, no matter how good the line-haul looks.

Next, read what a good cost per mile looks like, or see a worked example in the live Net CPM report.