What is Cost Per Mile (CPM)?

Cost Per Mile (CPM) is the foundational metric of the trucking and delivery industry. It represents exactly how much money it costs a trucking company (or owner-operator) to drive a vehicle exactly one mile.

If you do not know your CPM to the penny, you cannot run a profitable trucking business. Freight brokers will constantly offer you loads at "$1.80 per mile." If your CPM is $1.95, accepting that load means you are losing 15 cents for every mile you drive.

Fixed vs. Variable Costs

To calculate an accurate CPM, you must separate your costs into two categories:

• Fixed Costs: These are expenses you pay even if the truck never moves. This includes your truck lease/payment, commercial auto liability insurance, health insurance, and annual permits (like IFTA).
• Variable Costs: These expenses only happen when the wheels are turning. This includes diesel fuel, DEF fluid, tires, oil changes, tolls, and scale fees.

The Danger of "Deadhead" Miles

Deadheading is driving a truck with an empty trailer. If you drive 500 miles to deliver a load, and then drive 200 miles empty to pick up the next load, your actual driven miles for that trip is 700.

Many new truck drivers only divide their revenue by the 500 loaded miles, tricking themselves into thinking they are profitable. You must divide your costs by Total Miles Driven (including empty deadhead miles) to find your true CPM. Fuel burns whether the trailer is empty or full.