What is the cost per mile for a transportation company?

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The Dojo Business Team

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We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch transportation companies. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the transportation market.

How do I total miles driven across my fleet for a period?

Total miles equals the sum of all vehicle miles recorded during the chosen period.

Pull odometer or telematics exports and sum the “miles driven” column for every asset; choose a consistent week or month window and lock the cutoff date. In 2025, a long-haul truck typically logs about 1,700–1,900 miles per week, so a 15-truck fleet would target ~25,500–28,500 weekly miles.

Record both total miles and “revenue miles” (dispatched/loaded) to measure utilization and deadhead separately.

Use unique unit IDs and reconcile against fuel transactions to catch anomalies.

You’ll find detailed market insights in our transportation company business plan, updated every quarter.

How do I compute total fuel consumed and the average price paid?

Fuel cost per mile = (total gallons × average price per gallon) ÷ total miles.

Export fuel card invoices or telematics fuel logs, sum gallons, and compute a weighted average price for the same period; exclude DEF and non-fuel items. Example: 45,000 miles, 6.8 mpg → 6,618 gallons; at $4.25/gal, fuel cost per mile = (6,618 × 4.25) ÷ 45,000 = $0.62/mi.

If you track liters, convert consistently (1 US gal = 3.785 L) and use the same currency base for benchmarking.

Flag outliers (very low/high prices) to find fraud or mis-coded purchases.

What is the fleet’s average fuel economy (mpg or L/100 km)?

Fleet mpg = total miles ÷ total gallons; L/100 km = (100 × liters) ÷ km.

In heavy-duty transportation, 2025 fleet averages commonly fall between 6–8 mpg (≈ 30–40 L/100 km), depending on route profile, load, speed, and aerodynamics. Calculate by period and by unit so you can isolate problem vehicles quickly.

Benchmark tractors of similar age and spec against each other to surface maintenance or driving-behavior gaps.

Tie driver coaching to mpg variance to capture easy savings.

How do I allocate driver wages and benefits per mile?

Driver cost per mile = (wages + benefits + payroll taxes + bonuses) ÷ total miles.

Typical 2025 ranges are $0.49–$0.83 per mile, depending on region, experience, and bonus structure. If you also pay hourly for detention or local work, include those hours in the same period total to avoid understating cost per mile.

For team runs or slip-seating, assign costs to the asset or dispatch number and then to miles to keep the math simple.

Reconcile against TMS payroll exports each period to prevent drift.

What do maintenance and repairs add per mile?

Maintenance cost per mile = (parts + labor + vendor services + tires) ÷ total miles.

Expect $0.09–$0.40 per mile depending on equipment age, warranty coverage, and duty cycle. Separate Preventive Maintenance (PM) from unplanned repairs; a rising unplanned/PM ratio is an early warning that reliability is deteriorating.

Use a standardized VMRS code set so you can target the systems driving most spend.

This is one of the strategies explained in our transportation company business plan.

How should I factor insurance into cost per mile?

Insurance cost per mile = total premiums (auto liability, cargo, physical damage, etc.) ÷ total miles.

In 2025, many transportation companies land between $0.06–$0.18 per mile. Pay attention to deductibles and losses; frequent small claims raise premiums faster than occasional large ones, so invest in safety tech and training to shrink your loss ratio.

Allocate any mid-term audit adjustments back to the periods they cover to avoid spikes that distort decisions.

Review coverages at renewal and right-size based on current routes and cargo types.

Which licensing, permits, and compliance costs belong in cost per mile?

Include registrations, IFTA/IRP fees, toll transponders, permits, and compliance program costs.

Because these are largely fixed, allocate them by dividing the period’s total compliance spend by total miles. Tracking them separately highlights how efficient your revenue miles are at absorbing fixed burdens.

Keep expirations in a single calendar to prevent last-minute premium fees or downtime that quietly inflates per-mile cost.

Bundle small items (drug testing pool, ELD subscriptions) so they are not overlooked.

How do I allocate depreciation or lease payments per mile?

Depreciation/lease cost per mile = period depreciation expense or lease payments ÷ total miles.

Example: a $24,000 two-year lease = $1,000/month; at 10,000 miles/month, that is $0.10/mi. Newer equipment often lowers maintenance but raises depreciation/lease per mile—model both to find the true total cost curve for your transportation company.

Use straight-line depreciation for planning unless your accountant specifies another method for tax purposes.

Re-estimate residual values annually to keep numbers realistic.

Which administrative and overhead items should be included?

Overhead per mile = (office payroll, rent, software/ELD/TMS/telematics, utilities, accounting, legal, marketing) ÷ miles.

In 2025, a reasonable planning range is $0.06–$0.30 per mile, influenced by scale and outsourcing. Tie software and communication costs to active tractors so overhead rises and falls with the size of your transportation company.

Monitor overhead as a percent of revenue to ensure growth is profitable, not just bigger.

We cover this exact topic in the transportation company business plan.

What is utilization (load factor) and how does it change cost per mile?

Utilization measures how much of your fleet’s time and capacity generates revenue.

Track (a) loaded miles ÷ total miles and (b) hours under dispatch ÷ total available hours. As utilization rises, fixed costs are spread over more revenue miles, pulling total cost per mile down; deadhead and idle time push it up.

Improve by tightening routing, reducing empty backhauls, and matching equipment to lane demand.

Get expert guidance and actionable steps inside our transportation company business plan.

What is the fixed vs. variable cost breakdown per mile?

Fixed costs do not change with miles in the short term; variable costs scale with activity.

What are the most up-to-date industry benchmarks for cost per mile, and how do I compare?

In October 2025, many transportation companies report total operating cost per mile near $1.10–$1.50.

Can you show a worked example for a transportation company’s cost per mile?

Yes—here is a simple monthly example for a 10-tractor operation.

Which levers reduce fuel cost per mile fastest in a transportation company?

• Cap highway speeds and enforce cruise-control usage across the fleet.
• Install aero aids (skirts, tails), low-rolling-resistance tires, and maintain tire pressure.
• Reduce idle time with APUs or auto-start policies tied to temperature thresholds.
• Spec the right axle ratios and powertrains for your primary lanes and average gross weights.
• Coach drivers with scorecards that reward mpg, smooth braking, and optimized shifting.

How often should a transportation company recalculate cost per mile?

Recalculate every week for operations control and monthly for financial reporting.

Weekly cycles catch fuel and utilization shifts quickly; monthly cycles align to payroll, insurance, and lease bills. Always lock the same period dates for miles and expenses so the denominator and numerator match.

Automate a dashboard that rolls up by asset, driver, lane, and customer so you can act on outliers immediately.

It’s a key part of what we outline in the transportation company business plan.

What data quality rules should I enforce before trusting the number?

Validate miles, fuel, and payroll sources before publishing cost per mile.

Require unit IDs on every transaction, ban manual overrides without notes, and reconcile fuel gallons to expected mpg bands. Investigate any truck that falls outside the 6–8 mpg range or shows inconsistent odometer movements.

Close each period with a simple checklist: miles, fuel, payroll, insurance accruals, lease/dep, maintenance, overhead.

Small data errors compound; a tight close process protects decisions.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. FreightWaves – Understanding Total Operating Cost per Mile
2. Fleetio – Cost per Mile & Total Cost of Ownership
3. Truckstop – How to Calculate Cost per Mile
4. Webfleet – Truck Diesel Use per Mile
5. Geotab – Increase Fleet Fuel Efficiency
6. Wikipedia – Fuel Economy in Automobiles
7. SambaSafety – Fleet Fuel Efficiency Tips
8. Solera Fleet – Fleet Management Costs Guide
9. Fleetio – Trucking Cost Analysis
10. Spring Free EV – Fleet Mileage