As the title asks, do you? Do you know how to correctly figure out your Operating Cost Per Mile? That number is going to vary carrier to carrier and year to year when you figure it correctly.
You’ll have fixed costs, then varying costs. Fixed would be truck/trailer payment, insurance, UCR, load boards, to name a few. Then you have varying costs like fuel, tires, tolls, lights, food, service/maintenance, office supplies, tax services, etc. I’ve had several tell me their Operating Cost Per Mile and know right away they haven’t figured it all up. Either from not knowing better, or don’t feel it is an expense for the business.
Some feel if they don’t have a truck or trailer payment, they won’t need to factor that in. My question is, what happens when it comes time to replace them, or have major repairs? Paying yourself is a big one. How about your phone service, or internet service if you utilize it on the road? Paper for the printer if you use one. Also keep in mind, dead head is an expense. I have had a few try to tell me it isn’t over the years. Once you figure that all up correctly… Look at your RPM you’re getting and do some simple math. I’ll forget a few things that should be factored in here, so don’t use just what I’ve mentioned here.
I.E. You take a load that pays $2 mile going 1100 miles 1 pick/1 stop no tarp.
Say your Operating Cost Per Mile is $1.44($.84 business costs +$.60 driver pay) likely higher for most due insurance these days 10%/$.20 for your dispatch service(yuck) 5%/$.10 for factoring if you do that. On a 1100 mile run that pays $2,200 to the truck. $220 to your dispatch service. $110 for factoring.
Now your Operating Cost Per Mile @$1.44 comes to $1.584 Now, at the end of that 1100 mile run, the business has made $286.00 for 1 ½ days work. At the end of the week, the business profited $858. This number will in reality be a bit lower as some will have a higher OCPM, and incidentals along the way like taxes which again will vary carrier to carrier.
Are there any “good” worksheets or templates that can help figure all that out? Math is NOT my strong suit!
I can provide the intel on what needs to be factored but you will have to do the math as the numbers will not be the same for every truck. Total miles varies to have a one size fits all spread sheet. Roughly figure your total miles for the year. You’ll also need to know what all expenses you have, again, it isn’t the same for everyone but most are the same. Fuel, tires, oil changes, other services to the rig, chains, straps, dunnage, load boards, tolls,truck washes, lumper fees, truck/trailer payment and/or a repair fund, insurance, etc. Any and all cost involved with the business should be factored into this equation. Take each of those costs, divide it by the number of miles driven, and that will give you your operating cost for that particular expense. You could also add up all expenses and divide that by the number of miles driven and end up with a cost per mile total. Myself I like to know each and every expense break down in an attempt to reduce costs in areas and maximize my ROI.