Calculate Your Own Cost-Per-Mile:
The Cost of Trucking
$1.38 The average per mile operating cost for the trucking industry
$180,000 The average total yearly cost of operating a commercial truck
The largest operating expense is diesel fuel. A commercial truck can easily consume more than $70,000 of diesel fuel per year.
Driver Salary is the second largest operating cost. Standard commercial truck driver salaries are based on the distance driven, per mile. Although drivers spend a fair amount of time in docks and traffic, their operating costs are only derived from miles traveled. 26% of overall expenses ($0.36 per mile)
Repairs & Maintenance – issues with air line/hoses, alternators, wiring, and brakes are all common in commercial trucks, and can cost $15,000 annually ($0.12 per mile)
Insurance – There are more than 9 different types of insurance policies for the industry. Multiple insurance policies can cause coverages to cost over $6,500 a year ($0.05 per mile)
Tires – Retreading is less expensive than new tires and is a large portion of this cost. Although mere pennies per mile, an average tire can cost over $250 and annual tire expenses can exceed $4,000 ($0.03 per mile), enough to purchase 16 new tires annually, but still not enough to replace every tire of an 18-wheeler.
Permits, Licenses, and Tolls – Required permits and licenses for the industry and equipment, as well as continuous travel on toll roads, are cause for this expense $3,600 annually ($0.02 per mile)
Coffee – Truck stops sell more coffee than convenience stores. The average commercial truck driver spends more than $0.004 per mile on coffee, resulting in over $600 a year on coffee per industry driver.
There are additional expenses that are harder to quantify on a per mile basis, such as the expense of finding loads, either by paying commission or salary to a dispatcher, or using freight matching services. Other expenses, such as freight factoring services that help trucking companies receive faster payment on invoicing, are only used by some trucking companies.
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Many thanks for the inf0 and the for the subsequent comments. There are lots of national trucking companies these days that are putting the squeeze on newly trained drivers to lease their trucks at rates that just don’t make any sense what-so-ever but these guys are grateful to have a job, mostly uninformed about what they are getting into and anxious to “be their own bosses”. Hopefully, this information and the comments will help them become better informed.
Thanks for the well put together information on trucking costs. It is a big help in computing my start up costs and putting together my business plan. I agree with Howard that new truck drivers like myself are easily taken advantage of by the larger fish. Like working for the company store if you ask me…
There’s a lot of good info here in a great visual format. I’d like to add the fact that many owner operators will go through brokerage firms like ch Robinson, access America or others to find loads. As a broker I can say this is a huge hassle for operators and can take up a major portion of every day. If you’re thinking of starting up be prepared to multitask constantly, be assertive, and work day and night. (And for gods sake use a broker that does not get paid on commission)
Thanks for the feedback! Do you mind writing more about why owner operators should avoid brokers who get paid on commission?
Because they will take as much money as possible off the top of the load pay. This business model is one component that has screwed up the trucking business.
what about TQL!
TQL in my opinion is the worse broker I have ever seen before that company will uses the fine print in its rate conformations alloing them to shop a load around for a cheaper carrier
As Steve requests, I would also like to learn more about why not to use a broker that works on commission. Please enlighten us!!
Thanks!
You should use anyone who fits into your business plan that is the easiest for you to manage. If you need to make say $500.00 per day to pay for all expenses, including your salary, then by all means use that person. Brokers provide a source of income for you at a minimal fee. They usually work on a 10% commission. Do the math. Would you be willing to spend all day making $150.00 on a load, or getting a shipping number, and driving. You make money when the rig has a live load, or loaded miles. If you calculate the time taken away from loaded miles, you will be shocked! Your job is to drive, so if someone is willing to provide you with revenue, then by all means let them do it. You have the benefit of either taking a load ,or turning one down. If you have the means to dispatch yourself, then do it. Most guys simply don’t have the time. The smart drivers have a woman back at the ranch, working the deals. Sometimes that can cost more than 10% so be careful who you get into business with LOL!
lol who need a logic, math and $? Go for loaded miles lol how many times did i hear it and still don’t know how so many people can even make themselves to say something like that.
fairly accurate, but I would bump the repairs/maintenance to .25+ cpm for 2007 and newer trucks. Personally I’m at .43 cpm repairs on Q1 of this year and have averaged over $50,000 for the last three years in repairs.
Big trucks take big bucks and if your gonna play the game you had better know your numbers
A couple of other comments regarding factors that impact this cost module. Trailer ratio – if you are a regional fleet, then you most likely keep a 3:1 trailer ratio – so you need to build that into your truck and trailer cost. For example – if 1 trailer equates to .06/mi, then 3 trailers equates to .18 per mile.
Driver wages in your scenario seem low. This can depend on your geographical location. For example, our small fleet is based in upstate NY. Long Haul dedicated drivers are paid .40-.42 +, and regional drivers paid .50-.52_. We figure our employment costs of benefits and Workers Comp is 33%. So if a driver is paid .42 per mile, our real cost of the driver is .56 per mile.
Tolls vary from state to state. Our fleet is based in upstate NY – where we have tolls everywhere! We average $900/mo per truck for tolls which equates to roughly .09/mile! Plus the .025/mile for licensing and IFTA taxes. So we are paying .115 per mile compared to your scenario of .02 per mile.
You also need to figure in a cost for your overhead. This includes your building, energy, phones, internet, computers, office support, etc. We usually figure a number of $150 per day per truck, which equates to roughly .31 per mile.
You also haven’t figured any cost for driver turnover. I am not talking about the cost to advertise and interview… but about the cost of empty trucks sitting in your yard. This is a real expense for every fleet in the country. We haven’t yet figured a cost for this. We have a fairly low turnover rate of 40% as compared to the national average that is over 80%… however it is much too high for my liking. Over the past 6 months, we have averaged 10% of our fleet sitting idle in the yard.
If you add all of this up, our cost per mile in NY is closer to $2.10 per mile!!
Excellent insight, Jason! Thanks for taking the time to help others understand the additional costs of running a trucking company beyond the factors outlined in the article.
Jason- freight sucks out of NY so if your paying 2.10/mile and only getting about 1.70 its easy to see that your going to be out of business in no time!! you better start cutting costs my friend.
All I wanna know is where you are getting those tires for 250 dollars…????
Made in China .
You need to update this post . Market changed 680 degree since then. just one example: For new companies insurance is up to 19k. in Chicago lets say in Indiana this number is 12k. there is no way you can pay 6000 a year insurance…
I am actively pursuing the purchase of a new truck for $159,900 and planning on getting a trailer along with my own authority. Intially I am planning on running off of load boards until I have been in business for at least 6-8 months just to get established. What I need to know is would I be better served with a flatbed,dry van or reefer? And what is the difference in per mile pay for each trailer.
You have the perfect recipe for GOING BROKE
I need to compose a rate sheet for fuel delivery. What should I charge per mile for regular gasoline and diesel/transmix? I’m a female and has no idea on how to charge. Start at the 1st 15 miles up to 500 miles. What is the average starting price per mile and price increase every 5 miles thereafter?
2,00 per mile
To be realistic you won’t find quality drivers that work for the rate of 0.36$/mile!!! Make it 0.45 to 0.50… If you are looking to save money by having poor drivers you will lose by having the equipment in the shop more!!! It will end up costing you 0.5$/mile no matter how you go!
With the regulations compelling digital records, how much do you get charged for telematics reports per month per driver? I’ve heard as much as $14 per driver per month
This estimate is actually on the low end today’s tire prices are about $400+ and average driver pay $0.45+ so on average total operating cost is about $1.65+
Thank you Jason for that great insight. My motto is I know trucking makes money but tell me how I will loose money. Erica
Do not become an owner opertaor unless you can make $2 per mile……your buying a job not a busnuess. Not worth it at all and it is a stupid decision to be honest .
I can agree with all the comments here in part if not all, except the last one by Omer, I’ve been. A one truck owner operator since 2010 and have mad a profit every year.
Great advice and comments by everyone though, thanks for helping to keep truckers strong and moving forward.
I think the biggest thing is that these numbers are just your operating expenses does not include any profit for the company even if you are a sole operated. You have to figure in profit which does not include your personal earnings. If you aren’t slapping at least some type of percentage on tops of everything you r just getting by
I think the biggest thing is that these numbers are just your operating expenses does not include any profit for the company even if you are a sole operated. You have to figure in profit which does not include your personal earnings. If you aren’t slapping at least some type of percentage on tops of everything you r just getting by
So I live around 150 miles from the nearest gas terminal. Cost of trucking is 1.86/mile. Gas in the terminal city is 2.20/gal. I pay 260 for gas that cost 2.07 per mile to get here?