Why you must know your exact cost per kilometre
Cost per kilometre is the single most important number in your whole transport business. Without it, you don’t know whether a trip makes a profit or a loss, you can’t negotiate rates, and you can’t compare vehicles against each other. Many firms run “by feel”, then wonder at month-end where the margin went.
When you know your real cost per kilometre, you can:
- set rates that actually make a profit, not just revenue;
- turn down unprofitable trips instead of accepting them “just to keep the truck rolling”;
- compare the profitability of vehicles and drivers;
- negotiate with customers from a position of clarity, with the numbers in front of you.
Fixed costs vs variable costs
The first step is to split your expenses into two categories. Fixed costs occur no matter how many kilometres you drive, while variable costs rise in proportion to distance travelled.
| Cost category | Type | Examples |
|---|---|---|
| Vehicle lease / depreciation | Fixed | Monthly instalment, truck depreciation |
| Insurance | Fixed | Motor liability, comprehensive, CMR insurance |
| Driver wage + contributions | Fixed | Salary, base per diem, taxes |
| Administrative costs | Fixed | Office, accounting, software, phones |
| Fuel | Variable | Diesel, AdBlue |
| Tyres | Variable | Wear per kilometre |
| Maintenance and repairs | Variable | Services, parts, workshop |
| Road charges | Variable | Vignette, toll, per-km charges |
A common mistake is to forget fixed costs entirely — especially depreciation and the administrative share. They “hide”, but they eat your margin just as fast as diesel does.
The cost-per-kilometre formula
The basic formula is simple:
Cost per kilometre = (Total monthly fixed costs + Total monthly variable costs) ÷ Kilometres driven in a month
The steps are:
- Add up all the vehicle’s monthly fixed costs.
- Estimate the variable costs per kilometre and multiply by the monthly kilometres.
- Add the two sums to get the total monthly cost.
- Divide the total cost by the kilometres to get the cost per kilometre.
A worked example
Let’s take a 40-tonne tractor unit running roughly 10,000 km per month. The values below are indicative and will differ by fleet, route and market.
| Cost item | Monthly value |
|---|---|
| Lease / depreciation | €1,200 |
| Insurance (liability, comprehensive, CMR) | €350 |
| Driver wage + contributions | €1,800 |
| Administrative costs (per vehicle) | €200 |
| Fuel (€0.40/km × 10,000) | €4,000 |
| Tyres (€0.03/km × 10,000) | €300 |
| Maintenance and repairs (€0.07/km × 10,000) | €700 |
| Road charges (€0.02/km × 10,000) | €200 |
| Total monthly cost | €8,750 |
Cost per kilometre = €8,750 ÷ 10,000 km = €0.875/km.
That means any trip paid below €0.875/km, for this vehicle, loses you money — even when it “feels” like you’re earning.
How to set the right rate for a trip
Cost per kilometre is your floor, not your selling price. On top of it you add the profit margin you want.
If you want a 15% margin over cost:
- Cost: €0.875/km
- Price with margin: €0.875 × 1.15 = ≈ €1.01/km
Two adjustments make the difference between profit and loss:
- Empty (deadhead) kilometres. If 15% of your kilometres run without freight, your real cost per loaded kilometre is higher. Price against the kilometres that actually earn revenue.
- Waiting and handling time. Loading, unloading, customs or long stops are costs that never show up as kilometres. Build them into the rate.
For international trips, also add the exchange-rate differences between the currency you sell in and the one you pay your costs in.
Common mistakes in cost calculation
- Ignoring depreciation and administrative costs.
- Using one average cost for the whole fleet, even though an old truck and a new one have very different costs.
- Forgetting empty kilometres and calculating everything on total kilometres.
- Not updating the cost when fuel, road charges or wages rise.
- Negotiating on gut feel rather than the real numbers per vehicle and per trip.
For how rising road charges add pressure to your margin, see our article on the 2025 Romanian vignette price increase.
How a TMS helps you track the real cost
Working it out in a spreadsheet is fine at first, but it gets hard to maintain once you have several vehicles, routes and currencies. A transport management system automates the heavy lifting and shows you real profitability rather than estimates.
With Routena you can:
- automatically calculate the cost per kilometre for each vehicle;
- record the selling prices (customer) and purchase prices (supplier) on every trip;
- see the margin per trip, including normalised into your accounting currency for jobs invoiced in different currencies;
- track KPIs and reports on costs, revenue and trends over time.
So instead of finding out at month-end that you worked at a loss, you see each trip’s profitability before and after you accept it. If you also want to get the fleet data that feeds these costs in order, see our fleet record-keeping guide, and for the bigger picture of a TMS, what a TMS is.
Frequently asked questions about cost per kilometre
What is the average cost per kilometre for a 40-tonne truck?
As a guide, in Europe the operating cost frequently sits between €0.80 and €1.10/km, depending on fuel, wages, routes and load factor. Always calculate it for your own fleet rather than using a generic average.
Which costs should be included in the calculation?
All of them: lease/depreciation, insurance, the driver’s wage, the administrative share, fuel, tyres, maintenance and road charges. Fixed costs are the ones most often forgotten.
How do empty kilometres affect the cost?
Kilometres without freight raise the real cost per loaded kilometre. If you run a lot of empty distance, you have to recover those costs through the rate on the kilometres that earn revenue.
How often should I recalculate the cost per kilometre?
At least quarterly, and whenever the price of fuel, wages or road charges changes significantly.
Conclusion
Cost per kilometre isn’t an accounting exercise you do once a year — it’s your daily decision-making tool. When you know it exactly, for each vehicle, you set fair rates, refuse unprofitable trips and negotiate from strength.
And when you track it automatically, with prices, margins and currencies centralised in a TMS like Routena, you turn profitability from a month-end surprise into a decision you make before every trip. Book a demo and see how it works in practice.
