Whats the formula

[yurkym]

Ok for starters we dont haul cheap freight. we run for between 1.45 and 2.20 a mile. Now how do we figure out our CPM?

We think we know but there are so many variables. Do we add our costliest month with the month we made the most or do we average. I have always been good with my numbers and money but some of this stuff is kicking my butt.

We can run for a month with the only "repairs" is a service, then the next we blow a steering tire, an injector , and something else. Is there a formula you use or after a year run the average?

[solo379]

Yes, you "average" all the numbers, and those numbers, should include all
possible expenses, for as long, as you'll keep the truck.
Including "depreciation" and "replacement cost".
Don't be afraid to overestimate" a bit it wouldn't hurt you!

[allan5oh]

Every tax year I figure out my CPM. From there I "budget" what I expect my next year to be. 2008 will be a good year for me, no more truck payments :P. There really is no point in taking a "sample" of less then a year. Even year to year repairs/maintenance can fluctuate a lot. Tires are a good example of this.

The problem with figuring out CPM is that it can fluctuate so much. I never try to put a "hard" number on fuel cost for example, it's impossible to. Sure you can do it for the past, but who knows how much fuel is going to cost in the future?

I also like to do a "worst case scenario". Maybe I only get 8,000 miles a month, my fuel mileage drops to 6.5 and the fuel price goes up? What happens then? Always prepare for the future.

I've found doing these calculations, the best thing you can do for your net worth and well being is drive an older, well maintained truck. Depreciation absolutely kills. On top of that, the newer trucks get much less fuel mileage.

[yurkym]

So my CPM will always be different.at this point if I average it would be about 70cpm, but last month it was about 58cpm.so in other words find a constant after say 14 months?

[GMAN]

If your costs are running from $0.58-0.70 per mile, then you are leaving some things out. What about your truck payment, base plates, permits, and insurance? Driver pay should also be considered, even if you are the driver. You have taxes that need to be paid, such as payroll or self employment taxes. Do you put money aside for such expenses as pm's, tires, overhaul or other major expenses. You can calculate expenses by the month, but it is best to take a look for an entire year for the big picture. You are correct in that expenses can vary month by month, but it should be fairly accurate to see the numbers for the entire year. Although not as accurate, you could eliminate or not include any payroll costs, if you are the driver.

[rank]

Yep. What they said.

I figure ours at $1/mile + whatever we pay the driver.

I depreciate the trucks down to zero over 5 years and the trailers over 10 years. i.e. a $60,000 truck costs $12,000/yr or $.12/mile if you drive 100,000 miles.