The trucking industry runs on tight margins, and setting your rates correctly can be the difference between thriving and barely scraping by. Many owner-operators and small fleet owners struggle with pricing, often underestimating costs or failing to account for critical factors like deadhead miles. Understanding how to calculate your cost-per-mile and ensure you’re charging enough is essential to long-term profitability.

Understanding Your Cost-Per-Mile

Your cost-per-mile is the foundation of your pricing strategy. If you don’t know what it costs to run your truck, you can’t set rates that ensure profitability. Your total cost-per-mile includes both fixed and variable expenses.

Fixed costs are those that don’t change, such as truck payments, insurance, permits, and accounting fees. Whether your truck moves or sits, these costs remain. Variable costs, on the other hand, fluctuate depending on how many miles you drive. Fuel, maintenance, tires, and tolls all fall under this category.

To calculate your cost-per-mile, take your total monthly expenses and divide them by the miles you run. If you spend $12,000 a month to operate and run 10,000 miles, your cost-per-mile is $1.20. That means any load paying less than that is a financial loss before you even consider profit.

Factoring in Deadhead Miles

Many truckers make the mistake of only considering loaded miles when setting rates, ignoring deadhead miles—the empty miles driven between loads. Since you’re still burning fuel and racking up maintenance costs while deadheading, these miles must be included in your rate calculations.

If a load pays $2.00 per mile for 500 miles but requires a 200-mile deadhead to pick up, your effective rate isn’t $2.00 per mile. Instead, you need to divide the total payout by 700 miles, not 500. Suddenly, that $2.00 per mile load is actually paying you only $1.43 per mile, which might not even cover costs.

To compensate, factor an additional charge for deadhead miles into your rates or negotiate with brokers and shippers to minimize the distance between loads. Smart planning and using load boards strategically can also help reduce unpaid miles.

Pricing for Profitability, Not Just Survival

Breaking even isn’t enough. You need to set rates that allow for profit, not just covering costs. Many truckers operate with a razor-thin margin, leaving them vulnerable to unexpected repairs, fluctuating fuel prices, or slow payment cycles.

To ensure profitability, add a percentage markup over your cost-per-mile. If your cost is $1.20 per mile, charging $1.50 might keep you afloat, but it won’t allow for growth or cushion against setbacks. Instead, aim for a target profit margin—whether it’s 20% or more—so you’re not constantly running on fumes, both financially and physically.

Understanding market trends is also key. Rates fluctuate based on supply and demand, seasonality, and freight lanes. Research what other carriers are charging for similar hauls in your region, and don’t be afraid to walk away from loads that don’t pay enough.

Avoiding Rate Pitfalls

Newer owner-operators often make the mistake of underbidding just to get loads, thinking they can make it up in volume. The problem? Running cheap freight doesn’t get better with volume—it just wears down your truck faster while keeping you in a cycle of low pay.

Another mistake is failing to adjust rates when costs rise. If fuel prices spike or insurance premiums increase, your rates need to reflect that. Keeping outdated pricing will slowly erode your margins until you find yourself in the red.

Finally, don’t assume that brokers always have your best interests in mind. While many are fair, others will push for the lowest rate possible. Knowing your costs and having a minimum rate you won’t go below ensures you don’t get taken advantage of.

The Bottom Line

Setting trucking rates that actually make money requires knowing your costs, factoring in deadhead miles, and pricing for long-term success. Treat your business like a business, not just a job. With smart rate-setting strategies, you can ensure every mile you drive is putting money in your pocket—not just covering expenses.