Cost Per Mile

For Owner Operators the cost of running a truck can be intimidating at first. There are many expenses plaguing these business owners and in order to combat that, the driver needs to have a thorough understanding of the specific fixed and variable costs they come across each month. By determining these costs, they can extract a revenue value that is necessary to cover the cost of operations and still produce reasonable profit.
When calculating cost per mile, there are a couple of things you need to keep in mind. The first is that you want to consider your costs within an extended period of time. Measuring cost daily, can give you some useful information, but determining patterns and variability month to month in your expenses can provide you with much more insightful data. Next is determining what cost you have in operation. Fuel, insurance, truck payments, maintenance, etc. are all examples of common costs to owner operator’s. Personal expenses should be included as well. Meals, showers, etc. are all expenses that seem minor at first, but add up very quickly. You will need to find your cost per mile. This is calculated by dividing your costs by the mileage you ran in the same measured time period. For example, if in one month you ran 10,000 miles and your cost in that month was $5,000, your cost per miles would be $0.50/mi.
Finally, compare your rate per mile to your cost per mile. The difference is your profit per mile. You can increase your profit per mile by cutting down expenses where possible or finding ways to achieve better fuel economy. If you are still struggling to make ends meet, you may need to evaluate the rate per mile you are requesting when booking freight. All in all, the cost of operation for an owner operator may be high, but there is no reason one can’t be successful and profitable. All it takes is planning and a basic understanding of business management.

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