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Maximizing Trucking Profits with Cost per Mile





For trucking companies and independent truckers alike, managing costs and maximizing profits are vital for long-term success. One of the key metrics that can significantly impact your bottom line is the Cost per Mile (CPM). Mastering the CPM in trucking can help you make informed decisions, optimize your operations, and ultimately boost your profitability. In this blog post, we will delve into what CPM is, factors affecting it, and strategies to effectively manage and reduce it while maintaining the highest level of service.




Understanding Cost per Mile (CPM)


Cost per Mile (CPM) is a fundamental financial indicator used in the trucking industry to measure the average expenses incurred for each mile traveled. It is calculated by dividing the total operating expenses by the total number of miles driven during a specific period.


Cost per Mile = Total Expenses / Total Miles




Factors Affecting Cost per Mile

  • Fuel Costs

  • Maintenance and Repairs

  • Insurance Costs

  • Driver Wages

  • Equipment Payments

  • Tolls

  • Registration and Permits

  • Communications Services

  • Office and Parking Space



Strategies to Master the Cost per Mile

  1. Fuel Price: Whichever fuel provider you are currently using, try to renegotiate a fuel discount. Utilize the relationship you've built with them, emphasize your history of on-time payments. If you are a new carrier with a small fleet, outline your plans for future expansion as a key point to support your request for an increased discount. Additionally, it's beneficial to shop around for better deals. Reach out to different truck stops and inquire about the offers they have available. You can also explore online third-party companies that provide fuel cards and assess what they can offer you. By taking these simple steps, you may be able to significantly reduce your fuel costs.

  2. Fuel Efficiency: Limiting the speed of your trucks is a crucial strategy for increasing fuel efficiency. Traveling at 75 miles per hour consumes approximately 27% more fuel compared to driving the same distance at 65 mph. Slowing down to 55 mph can result in using 20% less fuel than at 65 mph, making it a highly effective method to save on fuel consumption. Furthermore, encouraging drivers to reduce idling time can also have a significant impact on overall fuel efficiency. On average, every hour of idling burns about 1 gallon of fuel.

  3. Preventive Maintenance: A major way you can significantly reduce repair costs is by implementing a preventive maintenance program. Scheduling regular maintenance tasks such as oil changes, fuel filter replacements, air filter replacements, battery service, DEF service, and transmission fluid replacements ahead of time can help avoid overpriced and costly on-road repairs. Additionally, it can reduce truck downtime, ensuring your fleet stays operational and productive. The first step in establishing a preventive maintenance program is creating a comprehensive list. That list should include all your equipment, including make, model, year, tire size, engine model, and transmission model for each truck in the fleet. By maintaining this detailed information, it becomes easier to track and manage the maintenance needs of each individual truck. This proactive approach will ultimately lead to improved fuel efficiency, extended equipment lifespan, and significant cost savings for your company.

  4. National Tire Accounts: When it comes to repairs, especially on the road, tire issues are the most common problem you'll experience. A single tire replacement on the road can cost upwards of a thousand dollars in some cases. That is why you should consider signing up for a national tire account to earn significant discounts. Additionally, many companies offering national tire discounts also provide the option to save on roadside assistance. By practicing preventive maintenance and having national accounts, you can save significantly on your CPM expenses.

  5. Insurance Savings: Auto liability, cargo, physical damage, occupational insurance, workers’ comp, general liability…just to name a few! Insurance probably takes the biggest chunk of a truck's revenue. There are many ways you can save on insurance, but usually, it will take more time and effort. Having a low SMS (Safety Measurement Score), passing road inspections, avoiding any violations, and hiring drivers with clean records will help you immensely when it comes to insurance renewal. Moreover, while shopping around for insurance, consider all the available options—don't just settle for the first "Scheduled Insurance" quote you receive. Explore revenue-reported policies, mileage-reported policies, and the potential savings from combining all insurance policies into one.

  6. Office Space and Truck Parking: Explore more affordable locations, consider downsizing office space, and evaluate whether you require all existing truck parking spots. If certain spots are consistently unused, discontinuing them can help reduce costs.

  7. Driver’s Wages: If your company is facing profitability challenges even after maximizing the RPM (Rate per Mile) and lowering CPM wherever possible, the last step should be considering renegotiating deals with drivers. If they decline, be prepared for the possibility of them leaving. While this can be challenging, it is often a better option than continuing to operate at a loss.




Mastering the Cost per Mile in trucking is a crucial aspect of running a successful and profitable trucking business. By understanding the components that contribute to the CPM and implementing effective strategies to manage and reduce it, trucking companies and truckers can optimize their operations and stay competitive in the industry. Remember, continually analyzing your CPM will pave the way to maximizing your profits and ensuring long-term success in the trucking business.



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