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As an Owner Operator or the head of a transportation operation knowing your numbers is the most important thing you must know well. Mastering Trucking Costs Per Mile will not only help you better understand your business, but it will also help you grow your business.
Calculating cost per mile is not as difficult as it may seem and by repeating the process over-and-over again you will become a Master of Knowing Your Numbers. As in any business there are two factors that you must know…Fixed Costs and Variable Costs.
Such costs could include:
Knowing these costs will help you figure annual, monthly, and cost per mile and make you a more profitable trucking business.
Variable Costs are expenses associated to the costs while the truck is operating.
Once we know the Variable Cost, we add that to the Fixed Cost, and we can figure out your Trucking Cost per mile.
This should be calculated monthly in order to really Master Trucking Cost Per Mile. To do this you take the Odometer reading from the end of the month and subtract that from the Odometer reading from the beginning of the month, which will give you the total miles per month.
Let’s look at a hypothetical Logging Truck Operation and see the numbers at work!
ABC Logging is a single truck operation based out of Alabama and they are looking to Master their Numbers. They own a single truck and since they are in the logging business they don’t have to worry about cargo insurance (who insures logs) and the company they are hauling for provides the trailer at no cost to the trucker. The numbers below are based on a local radius operation that runs 50,000 miles annually.
(per mile cost is calculated by dividing annual cost by mileage of 50,000)
Now that you’ve Mastered – Trucking Costs Per Mile you will need to keep evaluating the costs per month. The two biggest factors effecting Trucking Costs Per Mile is fuel and trucking insurance costs. Fuel costs need to be monitored monthly and insurance costs need to be evaluated yearly.