Cost Per Mile (CPM)

A common metric used to calculate the total cost associated with operating a vehicle for each mile.

What does CPM Include?

  • Fixed Costs: These expenses remain constant regardless of the distance traveled, such as:some text
    • Lease/purchase payments
    • Depreciation
    • Insurance premiums
    • Licensing and permits
    • Parking fees
    • Salaries of fleet personnel (pro-rated)
  • Variable Costs: These expenses fluctuate based on the number of miles driven, such as:some text
    • Fuel costs
    • Routine maintenance costs (oil changes, tire rotations)
    • Replacement parts
    • Minor repairs

Strategies to Lower Your CPM

  • Optimize Maintenance: Implementing a preventive maintenance program can minimize breakdowns, extend vehicle lifespan, and potentially reduce repair costs.
  • Fuel Efficiency Practices: Encouraging fuel-efficient driving habits, route optimization, and utilizing fuel-saving technologies can significantly impact fuel costs, a major factor in CPM.
  • Negotiate Contracts: Negotiating better deals on fuel purchases, vehicle leases, and maintenance services can contribute to lower overall fleet costs.
  • Monitor Tire Health: Proper tire inflation, maintenance, and timely replacements can improve fuel efficiency and reduce tire-related expenses.
  • Reduce Idle Time: Minimizing idling time through route optimization and driver training can help lower fuel consumption.

Benefits of Tracking CPM:

  • Improved Cost Control: By monitoring CPM, you can identify areas where costs are exceeding expectations and take corrective actions to optimize spending.
  • Informed Budgeting: Accurate CPM data helps in creating realistic budgets for fleet operation, allocating resources efficiently.
  • Performance Benchmarking: Comparing your CPM with industry averages or internal benchmarks helps assess your fleet's efficiency and identify areas for improvement.
  • Route Optimization: Analyzing CPM data can help identify routes that contribute to higher costs due to factors like fuel consumption or traffic congestion. This can lead to route optimization strategies for improved efficiency.

Bidding & Pricing: For companies offering delivery or transportation services, understanding CPM helps in setting competitive and profitable pricing based on actual operational costs.

Tracking CPM allows for improved cost control, informed budgeting, performance benchmarking, route optimization, and competitive bidding.