Why Calculate Trucking Cost Per Mile?  

This article was published on: 03/28/22 by the Robert Hall

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When you want to understand how much value you’re getting out of your fleet and your contracts, you need to know your trucking cost per mile. Your variable and fixed costs play a role in your expenses per mile, and you’ll likely want to be more aware of how much you’re spending for every mile your drivers travel. By knowing your expenses at this granular level, you can better understand your primary costs and make more accurate bids for new contracts.

Find out more about what trucking cost per mile calculators are and why they matter. You might also be interested in learning how to calculate cost per mile and the ways fleet management software can help.

What Is Included in a Trucking Cost Per Mile Calculation?

A trucking cost per mile calculation examines your expenses to determine how much it costs to operate and maintain your fleet’s vehicles on a per-mile basis. Typical items involved in calculating cost per mile include fuel, maintenance, driver and non-driver compensation, insurance and variable driving expenses. By figuring out your cost per mile, you have a much more detailed view of what expenses are affecting your bottom line. 

Why Do Trucking Cost Per Mile Calculators Matter?

When you employ a trucking cost per mile, you can better define your return on investment for every job your fleet handles. Alongside helping you identify your ROI, it enables you to make more accurate bids on the loads you hope to haul. Since trucking companies often operate on thin margins, you need a comprehensive idea of your total cost of ownership to take steps to reduce it.

Understanding Cost Per Mile

As you attempt to determine your costs per mile, it’s crucial to understand what factors go into calculating them. Figuring out your costs per mile starts by assessing your expenses. You can place these into two categories — variable costs and fixed costs. Fixed costs refer to expenses that occur regularly without any changes. Primary types of fixed costs include insurance, taxes and permits. 

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In contrast, variable costs refer to expenses that fluctuate based on factors like your fleet’s use, efficiency and size. Significant sources of variable expenses include maintenance and fuel, as an area’s gas prices can change without warning, and unexpected repairs can spring up from time to time. Other variable costs can also include tolls, drivers’ wages and replacement parts. 

02 How To Calculate

How to Calculate Trucking Cost Per Mile 

Calculating your cost per mile is a reasonably straightforward equation after you determine your variable and fixed costs. All you have to do is add these two numbers, then divide the answer by your miles traveled. The total will be your cost per mile.

Why Companies Turn to Fleet Tracking Software to Help Them Determine Their Trucking Cost Per Mile

While the equation for calculating your cost per mile is simple, many companies struggle to make reliable calculations. One significant reason for this inaccuracy is a company’s inability to determine its overall variable costs. If you lack a central location for storing your data and the capabilities to record costs, you’ll probably have incorrect information about your variable cost totals, thus leading to imprecise calculations about your trucking costs per mile.

Since correct information about variable and fixed costs is critical to receiving accurate results, your trucking company might want to consider using fleet tracking software. With this solution, trucking companies can keep more accurate records by using devices to track their fleet and place all the gathered data in a centralized platform. 

Fleet managers can use the software to track all their trucking costs and analyze them to see where they could improve. Centralized data also helps companies quickly calculate their fixed and variable costs and receive more accurate trucking cost per mile results. Some software programs even allow users to automate many central processes to make the calculation process faster and more accurate.

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How Truck Tracking Software Can Reduce Costs

While it’s critical to calculate your cost per mile, you probably also want to lower your expenses. Besides helping you more easily calculate your expenses, fleet management software makes it easier for you to reduce your overall costs, resulting in a lower cost per mile. Review some of the top ways you can use fleet management software to minimize your expenses below.

  • Improve fleet safety: Keep track of your drivers’ habits by using fleet management software. If a driver constantly speeds or exhibits other dangerous behaviors, your team can address the issue and ensure your drivers always operate their trucks safely. Improving in this area can reduce variable costs from accidents, tickets and repairs.
  • Optimize routes: When drivers take longer or more dangerous paths to get to their destination, your fleet’s expenses will increase. Fleet management software helps you optimize your fleet’s routes by giving you the tools to plan the best paths for drivers to take. By getting to destinations faster and ensuring drivers go on the safest routes, you can reduce expenses related to fuel, delivery delays and accidents.
  • Reduce fuel costs: Fleet management software can also control fuel waste to reduce your fuel costs. This software can identify when a truck idles for extended periods or a driver operates their vehicle in a way that increases fuel consumption. By having this information at your disposal, you can identify drivers who tend to waste gas and help them engage in best practices to reduce fuel waste.
  • Eliminate unauthorized use: Some drivers like to take advantage of their company’s trucks by using them on side jobs. When drivers use your vehicles for unauthorized trips, they raise the chance of accidents occurring and the truck needing maintenance sooner than you planned. Fleet management software often connects with real-time GPS tracking devices, letting you see where your trucks are and ensure drivers only use them for authorized activities.

Choose Track Your Truck for Your Fleet Tracking Needs

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Since accurately calculating your cost per mile can help you plan for the future and get more value from your fleet, you might be interested in fleet management software. At Track Your Truck, we make tracking your expenses easy with our software and GPS tracking devices. Our innovative vehicle tracking system makes it simple for you to spot inefficiencies and excess costs. Reduce your expenses, increase your ROI and get more value for every mile your drivers travel.

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Learn more about our fleet management software today. If you have any questions, please free to request a demo or a free quote.