How to Calculate Your Break-Even Rate Per Mile

Your break-even rate is the lowest rate per loaded mile you can accept on a trip without losing money. Know it before you call the broker, and you'll never have to guess whether a counteroffer is good enough.

Why it isn't the same as your cost per mile

Your cost per mile (CPM) is what it costs to move the truck one mile, loaded or empty. A broker pays per loaded mile. When you run empty to the shipper, you pay for miles nobody pays you for. So the rate per loaded mile has to be higher than your CPM to cover the whole trip.

The one time they match is a trip with zero deadhead. Every empty mile pushes your break-even rate above your CPM.

The formula

Break-even rate per loaded mile = CPM × (total miles ÷ loaded miles)

Total miles = loaded miles + deadhead miles. The flat-rate version is simpler: break-even flat rate = CPM × total miles. Both give the same answer. One is per mile, the other is for the whole trip.

Worked example

Your CPM is $1.85. That covers fuel, payment, insurance, maintenance, and what you pay yourself. A broker offers a 620-mile load. The shipper is 110 miles from where you're parked.

• Total miles: 620 + 110 = 730
• Trip cost: 730 × $1.85 = $1,350.50. That's your break-even flat rate.
• Mile factor: 730 ÷ 620 = 1.1774
• Break-even rate: $1.85 × 1.1774 = $2.178 per loaded mile

Anything below $2.178 a loaded mile, or $1,350.50 flat, and this trip loses money. At exactly that rate, you cover every cost, including your own wage if it's in your CPM, and nothing more.

How deadhead moves the number

Here's the same $1.85 CPM on a 500-mile load, with different amounts of deadhead:

Every 50 empty miles adds $0.185 a loaded mile to what this load has to pay. On a short load, the effect is bigger, because the same empty miles are spread over fewer paid ones.

Adding a profit margin

Break-even is the floor, not the goal. You need something left over for repairs you didn't plan for, slow weeks, and growing the business. There are two common ways to set a margin.

Dollars per mile

Decide how much profit you want on every mile you run, empty ones included. Say $0.50.

• Target flat rate: ($1.85 + $0.50) × 730 = $1,715.50
• Target per loaded mile: $1,715.50 ÷ 620 = $2.767

Percent of the rate

Decide what share of the rate you want to keep. Say 20%. The math here trips people up. A 20% margin isn't cost plus 20%. It means 20% of the rate is profit, so cost is the other 80%.

• Target flat rate: $1,350.50 ÷ (1 − 0.20) = $1,688.13
• Target per loaded mile: $1,688.13 ÷ 620 = $2.723
• Check: $1,688.13 − $1,350.50 = $337.63, which is 20% of $1,688.13

Cost plus 20% would only be $1,620.60, which is a 16.7% margin. If you think in percent, make sure you and your spreadsheet mean the same thing.

Don't forget the miles after delivery

If a load drops you somewhere with little freight going out, you may have to run empty to find the next one. You can add those expected empty miles to the deadhead on the load that puts you there. The math is the same. Put the extra miles in the deadhead field and see how much more the load has to pay.

Common mistakes

• Comparing the posted rate straight to your CPM. A $2.10 load looks fine next to a $1.85 CPM, until you see the break-even above is $2.178 with 110 miles of deadhead.
• Leaving your own pay out of your CPM. Then break-even means working for free.
• Using an old CPM. Fuel, insurance, and repair costs move. Redo your CPM every quarter.

Run your own numbers in the break-even rate calculator. Need your CPM first? Use the cost per mile calculator. To check a real load with tolls, lumper fees, and extra pay, use the load profit calculator.