How to Calculate Cost per Mile

The cost to keep your truck operating is one of the most important financial calculations for any trucking business. Yet, many drivers and owner-operators don’t track it, which can lead to pricing loads too low or running at a loss.

If you’ve never calculated your cost per mile before, don’t worry—you don’t need accounting software to do it. This guide will walk you through how to figure out cost per mile and why it’s essential for your profitability.

Table of Contents:

1. Why you should calculate cost per mile
2. How to calculate cost per mile
3. Step 1: Calculate how many miles you expect to drive
4. Step 2: Calculate your fixed expenses
5. Step 3: Calculate your variable costs
6. Step 4: Include salary expenses
7. Step 5: Calculate your cost per mile
8. Ways to lower your cost per mile

Why you should calculate your cost per mile

Knowing your cost per mile (CPM) helps you:

• Identify areas to cut costs.
• Set fair transport rates to stay profitable.
• Adjust for fluctuating fuel costs and expenses.
• Plan for future growth and unexpected costs.

Without this calculation, you could be losing money on every load without realizing it.

How to calculate cost per mile in trucking

Calculate your CPM with this formula:

Total expenses ÷ Total miles = Total cost per mile

To figure this out, you’ll need information from previous trips:

• Expense receipts from food, fuel, lodging, and other expenses from the previous month
• List of monthly payments, such as truck fees, permits, and insurance
• An odometer reading from the first day and final day of the previous month

Step 1: Calculate how many miles you expect to drive.

Odometer information helps you figure out how many miles you drive in a given month, whether paid or unpaid. Use this formula:

[End-of-the-month odometer reading] – [Beginning-of-the-month odometer reading] = Total miles driven

For example, if your mileage was 67,426 at the beginning of the month, and 75,968 at the end of the month, here’s what you would calculate:

75,968 – 67,426 = 8,542 miles

Now it’s time to figure out your total expenses.

Step 2: Calculate your fixed expenses.

Your expenses break down into fixed costs, variable expenses, and salary costs.

Fixed costs, or fixed expenses, are what you pay each month, whether you drive 10 miles, 1,500 miles, or not at all. They include:

• Truck payments
• Insurance (collision, liability, health)
• License plates 
• Permits

You usually pay fixed costs monthly, quarterly, or yearly. But to calculate your cost per mile, you need to know the monthly total for each fixed cost. If, for example, your annual license plate fee is $1,800, divide that amount by 12 months. This totals $150 per month.

Your fixed costs might look something like this:

Step 3: Calculate your variable costs.

Variable costs or operating expenses are based on how often and how far you drive and fluctuate from month to month. These include:

• Fuel costs
• Meals
• Broker fees
• Repairs and maintenance
• Lodging
• Tires

While some variable costs go up the more you run your truck, others can go down the longer you’re on the road.

Here are example variable costs:

Step 4: Include salary expenses.

Whether you run a fleet of trucks or are an owner-operator, you pay or draw a salary plus related expenses. Salary expenses can include:

• Wages
• Payroll fees
• Benefits
• Employment taxes 

For example, if you pay yourself $4,500 a month, this is your salary expense.

Step 5: Calculate your cost per mile.

Using the above example numbers, let’s figure out your cost per mile. First, calculate your total expenses by adding fixed costs, variable costs, and salary costs:

Fixed Costs ($2,875) + Variable Costs ($4,950) + Salary ($4,500) = $12,325 Total Expenses

Next, divide the total expenses by your total number of miles (8,542).

$12,325 ÷ 8,542 = $1.44 per mile

If your cost per mile seems high, look for ways to reduce costs—like finding more efficient routes or minimizing idle time.

Ways to Lower Your Cost per Mile

1. Optimize Fuel Efficiency

• Maintain speeds between 56-62 mph for better fuel economy.
• Reduce idling time.
• Keep up with regular maintenance (oil changes, tire pressure, etc.).

2. Book High-Paying Loads

• Use the Truckstop loadboard to find the most profitable hauls.
• Reduce deadhead miles by combining multiple loads in one trip.

3. Cut Unnecessary Expenses

• Negotiate better fuel discounts.
• Use cost-saving meal and lodging programs.
• Regularly review and adjust your insurance plan.

Knowing how to figure out cost per mile is essential to running a profitable trucking business. By tracking expenses, improving fuel efficiency, and finding high-paying loads, you can lower costs and increase profits.

Want to boost your earnings? Use Truckstop to find the best-paying loads and maximize your miles today. Schedule a free demo.