Knowing your cost per mile determines whether you make money or lose it on every load. Owner-operators who track this number accurately can negotiate better rates, identify expense problems before they drain profits, and make smarter decisions about which loads to accept. This guide shows you exactly how to calculate your cost per mile and use it to protect your bottom line.
Cost per mile (CPM) shows how much it costs to operate your truck for every mile driven. To calculate cost per mile, divide your total operating expenses by the total miles driven during the same time period.
Cost per mile formula: Total Expenses ÷ Total Miles = Cost Per Mile
Key takeaways:
- Know your break-even point - calculate CPM to understand the minimum rate you need to accept loads without losing money on fuel, maintenance, and fixed costs.
- Track both fixed and variable costs - insurance and truck payments stay constant while fuel and maintenance change with miles driven, affecting your CPM calculation accuracy.
- Update calculations monthly - fuel price changes and maintenance spikes require regular CPM reviews to keep your rate negotiations based on current operating costs.
- Include deadhead miles in total mileage - unpaid miles between loads increase your actual CPM and must be factored into rate calculations for accurate profitability.
Table of contents
- What is cost per mile in trucking?
- Why owner-operators must know their cost per mile
- How to calculate cost per mile
- Cost per mile calculation example
- How to calculate fuel cost per mile
- Common cost per mile mistakes
- Tools that make cost per mile tracking easier
- Frequently asked questions
What is cost per mile in trucking?
Cost per mile is the total amount it costs to operate your truck divided by the miles you drive. This number includes both fixed costs like insurance and variable costs like fuel. Owner-operators use CPM to determine their break-even rate, negotiate better freight rates, plan fuel stops, and make maintenance decisions that protect profitability.
Why owner-operators must know their cost per mile
CPM gives you the information needed to run a profitable trucking business:
- Know your true break-even rate
- Avoid running loads that lose money
- Negotiate freight rates with confidence
- Spot cost leaks in fuel, tires, and maintenance
- Plan cashflow more accurately month to month
How to calculate cost per mile
Follow these steps to calculate your true cost per mile as an owner-operator.
Step 1: Choose your timeframe
Pick a consistent period for tracking costs and calculating CPM.
- Monthly works best for most owner-operators
- Quarterly helps identify trends
- Always stay consistent when comparing numbers
Step 2: Track your fixed costs
Fixed costs stay consistent within your chosen timeframe, regardless of miles driven.
Examples:
- Truck payment or lease
- Insurance
- Permits and licenses
- ELD, TMS, and accounting software
- Owner pay, optional but recommended for break-even analysis
Some fixed costs may change annually but should be treated as fixed within the chosen period.
Step 3: Track your variable costs
Variable costs change based on miles driven and load requirements.
Examples:
- Fuel
- Maintenance and repairs
- Tires
- Tolls and scales
- Driver wages, if applicable
- Per diem expenses
- Factoring fees
Fuel is usually the highest variable cost and often represents roughly 25 to 40% of total operating expenses, depending on rates, lanes, and equipment. Fuel efficiency drops during the winter months when stations switch to winter blend diesel fuel.
Step 4: Track total miles driven
Accurate mileage tracking directly affects your CPM calculation.
- Use odometer readings or ELD data
- Include both paid miles and deadhead miles
- Verify accuracy against trip logs
Step 5: Add up total expenses
Combine all fixed and variable costs for your chosen timeframe.
- Fixed costs + variable costs = total expenses
- Use one clean total number for the period
Step 6: Apply the cost per mile formula
Total Expenses ÷ Total Miles = Cost Per Mile
This formula gives you the baseline number needed for rate negotiations and profitability analysis.
Step 7: Review and adjust monthly
Regular review helps you spot problems before they become expensive.
- Compare CPM month over month
- Watch for spikes in fuel, maintenance, or tires
- Adjust routes, fuel stops, or rates as needed
Cost per mile calculation example
This example shows the basic CPM math using simplified numbers for demonstration purposes.
Example figures:
This example is simplified to show the math, not to reflect industry averages. Your actual CPM will vary based on equipment, routes, and operating costs.
How to calculate fuel cost per mile
Fuel cost per mile helps you estimate trip costs before accepting a load.
- Fuel cost per mile formula: Price Per Gallon ÷ Average MPG = Fuel Cost Per Mile
- Example: $3.50 ÷ 7 MPG = $0.50 per mile
Calculate your potential savings on every gallon with the OTR Fuel Savings Calculator to see how fuel discounts affect your bottom line.
Common cost per mile mistakes owner-operators make
Avoid these calculation errors that underestimate your true operating costs:
- Ignoring deadhead miles
- Underestimating maintenance and tire costs
- Forgetting permits, insurance, or software expenses
- Mixing timeframes when tracking costs
- Failing to update CPM when fuel prices change
Many of these challenges stem from broader trucking industry challenges that make accurate tracking more difficult for owner-operators.
Tools that make cost per mile tracking easier
Fuel cards automatically record fuel purchases and provide detailed transaction data for accurate fuel cost tracking. The OTR Fuel Card saves an average of $0.50 per gallon at 2,500+ in-network locations while providing real-time transaction monitoring through the
OTR Mobile App.
Carriers who want flexible payment options can ask about fuel credit options available when paired with factoring. Factoring helps stabilize cashflow while you wait for brokers to pay. With non-recourse factoring from the best freight factoring companies, protection applies when you haul for brokers approved to factor with OTR.
Frequently asked questions
What is a good cost per mile for owner-operators?
CPM varies based on freight type, region, fuel prices, and equipment. The important number is your personal CPM, which determines your minimum acceptable rate for profitable loads.
Does cost per mile include owner salary?
Yes, if you want a true break-even and profitability number. Owner pay in your CPM calculation shows whether your business generates enough revenue to support you financially.
Should I calculate cost per mile weekly or monthly?
Monthly provides the most accurate picture, weekly works for estimates. Fixed costs like insurance spread more accurately across monthly timeframes.
How often should I update my cost per mile?
Update CPM at least monthly or whenever fuel prices change significantly. Major maintenance expenses or new equipment purchases also require CPM recalculation.
Know your cost per mile before you accept the load
Cost per mile is your profit protection number. If a rate does not beat your CPM, the load is not worth running. Knowing your numbers helps you run your trucking business with confidence and control.
Ready to reduce your operating costs and improve your CPM? The OTR Fuel Card provides average savings of $0.50 per gallon with discounts up to $2.25 per gallon at in-network locations. Pair it with True Non-Recourse Factoring for reliable cashflow that keeps your business moving forward.
Get started today to start controlling costs and protecting your profits.
