The unorganized, and small business owner operators do not have the tools and techniques to track the costs and associate with number of miles driven, which are loaded miles and empty (deadhead) miles. The operators often miss Loads to collect and never had comprehensive understanding on costs per mile.
LoadMiles is built with this essential feature in mind to help the small businesses understand the costs, track the sales and collections. So which costs should be considered in ‘Cost per Mile’?
Trips’ Profit Sheet:
| Per Mile | Load Profit | |
|---|---|---|
| Load Miles | 2,525 | |
| Dead Miles | 50 | |
| Total Miles (A) | 2,525 | |
| Load Price (B) | $2.18 | $5,625 |
| Driver Pay | $0.63 | $1,631 |
| Dispatcher Pay | $0.11 | $281 |
| Fuel | $0.49 | $1,262 |
| Tolls | $0.03 | $78 |
| Total Direct Costs (C) | $1.26 | $3,252 |
| Gross Margin (D=B-C) | $0.92 | $2,373 |
| Trips' share of monthly cost (G=F*A/E) | $0.57 | $1,468 |
| Cost per Mile (X=C+G) | $1.83 | $4,720 |
| Profit (Y=B-X) | $0.35 | $905 |
| Monthly Miles and Cost Estimate | Per Mile | Load Profit |
|---|---|---|
| Estimated Team miles per month (E) | 20,000 | |
| Insurance | $0.09 | $1,800 |
| Depreciation (K=H-I/J) | $0.38 | $7,600 |
| Safety, maintenance and Overheads | $0.10 | $2,000 |
| Total Overheads per Month / Mile (F) | $0.57 | $11,400 |
| Truck and Trailer Cost Estimate and Useful life | ||
|---|---|---|
| Truck and Trailer Cost (H) | $220,000 | |
| Residual Value (I) | $30,000 | |
| Estimated Truck Miles (J) | 500,000 |
Variable Costs:
- Fuel charges: Fuel is a major expense and often costs as much as driver pay. The fuel charge varies by place and State where you refill and significantly influences per mile cost. The more you drive, the more is the cost. Tracking the costs over the routes helps establish relationship and provides insights on finding profitable routes. Fuel Cost per Mile: Total Fuel cost / Total Number of Miles
- Driver Pay: The Trucking industry work environment differ substantially from regular industries in terms of hours of service, payrates and work schedules. The driver’s wages are usually linked to performance and often dependent on Load price, per mile or per hour.
- Dispatcher Pay: The dispatcher is similar to a factory foreman. The dispatcher manages booking the loads, scheduling, coordinating, follow-up, and delivery management.
- Tolls and Special permits: When applicable, these charges also play a role in influencing the per mile cost and should be tracked.
- Fuel Taxes (IFTA): Fuel taxes are based on amount consumed.
Fixed Costs:
- Insurance: The insurance agents provide the quote based on estimate of monthly miles. Calculate the standard cost per mile and absorb any gain or loss based on actual miles.
- Depreciation: Truck and equipment is depreciated based on the number of miles driven; the greater the number of miles driven, the larger the depreciation. Residual value and estimated useful life are assumptions and could impact cost of depreciation. Depreciation = (Cost of the equipment – Residual value) / Estimated Miles
- Administration: The costs of doing business along with all the associated overheads that are fixed, should be tracked and absorbed with the number of miles driven.
- Safety, Registrations, Taxes and Compliance: These additional costs should also be tracked as they significantly influence per Mile Cost.