Calculate Cost Per Mile (CPM)
The best way to calculate the CPM is by dividing the costs into two categories: variable costs (VC) and fixed costs(FC). Variable costs vary based on the number of miles you drive, while fixed costs stay the same. We recommend to calculate your CPM at least quaterly, but it can be done monthly or semiannually.
Variable Costs (VC)
- Fuel
- Maintenance and repairs
- Driver pay
- Dispatching/Factoring
- Lodging
- Miscellanous
Fixed Costs (FC)
- Truck & Trailer payment
- Truck insurance
- IRP
- Subscriptions
- Parking
CPM = VC / miles + FC / miles
Example - 3 month CPM: $38,500 / 31,400 miles + $15,333 / 31,400 miles = $1.22 + $0.48 = $1.70
Therefore, in order to make a profit, the rate needs to be higher than $1.70 per mile.