Operating Cost per Mile

jotunheim

New member
I have not been able to find a very good source to find an operating cost per mile for the NCV3 based Sprinters. Anyone have a spreadsheet that allows default assumptions to be in place, and then adjust for mileage and fuel price to get a general operating cost per mile?

We operate a fleet of 5 trucks and am trying to figure out what to charge customers per mile or zone, and at what point to impose a fuel surcharge if fuel rises rapidly, such as now when we are not able to adjust contracts fast enough.

Edmunds had one a few years ago, but I think it was pulled as I cannot find it anymore. At the time, the 2007 or 2008 Sprinters were at about $0.73 cpm to operate if you include vehicle cost, depreciation, insurance, maintenance, opportunity cost, etc.

If it is any help, we run the 3500 144" series trucks..

Thanks!

Jason
 

robertgrosz

Soapchef
Just my 2 cents worth. We run 3 shuttles, my van being a 06 2500. We do 350-400 miles a day more or less and average about 23.5 miles per gallon diesel. One year is about 120,000 miles, and we averaged about $100 a week in normal maintenance. 120,000 miles = $5200 in repairs, tires, etc. alternators (4x) etc... At least those are the hard costs, your insurance and fuel will vary, but that is pretty close.

I also have a chevy express van and E350. I find that the parts outlast the additional cost, and the parts seem to be getting easier to get. Brakes and rotors are about 30% more, but they are bulletproof which i can't say about my F*$%.

Robert
 
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jotunheim

New member
Well, with a little guesswork this is what I put together in a preliminary fashion.

We haven't had our Sprinters long enough to know the cost of maintenance, so I went with approximate costs on the previous vehicles we had (Dodge 3500 dually pickups).

I am also not sure if I should be adding the acquisition cost along with the depreciation cost, but did purposely leave out a "salvage value" to make this a worst case scenario.

Let me know what you think.
 

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hkpierce

'02 140 Hi BlueBlk Pass
Well, with a little guesswork this is what I put together in a preliminary fashion.

We haven't had our Sprinters long enough to know the cost of maintenance, so I went with approximate costs on the previous vehicles we had (Dodge 3500 dually pickups).

I am also not sure if I should be adding the acquisition cost along with the depreciation cost, but did purposely leave out a "salvage value" to make this a worst case scenario.

Let me know what you think.
Financing is your cost of acquisition debt, "profit" is your cost of your own equity, and depreciation is your investment recovery.

I don't understand the "Repair" costs for the first three years as that should be under warranty. However, if you consider it opportunity cost - may be [lost revenue], but that is normally [my experience only - I am not an accountant] a regulatory accounting and financial analysis approach, not IRS/GAAP accounting.

I see no management/administrative/overhead expenses.

I see no costs for your parking lot/garage/etc.

I see no targeted pre-tax return.

Your fuel costs assume a 5-year lease/pricing type arrangement. The fuel formula probably needs to be set to the same time units as your pricing, as that was the original question you asked.
 

tonman

2007 Dodge Sprinter 170wb
I drive a 2007 doing service work running on paved and gravel roads in ontario, our maintanance costs have been quite high mind you it is a ideal truck to work out of since I m 6'3" right now it is at 135000 km We have replaced the front brakes twice the rear once ty rods 4 sets of tires tons of light bulbs parking sensors the u joints are seized up rigt now to fix this you need new drive shafts totalling $2700.00 so in short the money you save in feul you will definitely spend on maintenance. and that this van is rusting already hm frustrating!
 

jotunheim

New member
Financing is your cost of acquisition debt, "profit" is your cost of your own equity, and depreciation is your investment recovery.
Financing cost was interest only portion at 4%, the best rate that I could find around here. Principal was and should not be included as an expense. I didn't include any profit analysis, as we set our charge per mile based on a percentage of our CPM, which right now we try to set at a 40% premium. My biggest question is that I think I may be double counting with expensing both depreciation over the 5 years AND having the acquisition cost, besides assuming zero salvage value.

I don't understand the "Repair" costs for the first three years as that should be under warranty. However, if you consider it opportunity cost - may be [lost revenue], but that is normally [my experience only - I am not an accountant] a regulatory accounting and financial analysis approach, not IRS/GAAP accounting.
I agree; my assumption is high and most of this would probably go away. However, any repair items not included in 100K powertrain coverage but after the 36K basic warranty would not be covered. In any case, these amounts could be reduced.

I see no management/administrative/overhead expenses.
I assumed these would be the same for any vehicle were to acquire, and I am not sure how this would be quantified other than just have a miscellaneous charge every year.

I see no costs for your parking lot/garage/etc.
NA, as we own the property the the vehicles operate out of. Someone that did have this could add these "miscellaneous" costs to a new row I suppose.

I see no targeted pre-tax return.
I am not sure I understand this. As I mentioned above, I did not do a profit analysis in the spreadsheet as I was just trying to get an accurate idea of the actual cost to operate.

Your fuel costs assume a 5-year lease/pricing type arrangement. The fuel formula probably needs to be set to the same time units as your pricing, as that was the original question you asked.
Well, I assumed that fuel would rise about X% (I think I put 4%) a year but who really knows right? Thank you for your comments! :cheers:
 

piper1

Resident Oil Nerd.
At $4/gal...mine is 28cents per mile for the running costs, so that does not include payments (or depreciation), insurance or any other fixed costs (costs you have whether you drive it or not. When I add those it goes up to 45.5/mile and I put away 3 cents per mile for repairs...48.5 cents.

That MB spreadsheet above......that was funny.....quite a lot of assumptions by MB to get the desired truth there.:rolleyes:
 

hkpierce

'02 140 Hi BlueBlk Pass
...My biggest question is that I think I may be double counting with expensing both depreciation over the 5 years AND having the acquisition cost, besides assuming zero salvage value.
That is what I said it would be.

Note that negative salvage works in conjunction with depreciation. But the depreciation scheudule you are using is premissed on GAAP standards, which is historical cost pricing. In short, it does not take into account replacement costs which, as the real world shows, increases over time. Thus, at the end of 5 years, you will not have recovered enough money through depreciation to replace your vehicle. Thus I would leave negative salvage out of the equation as a means of guessing the new vechical acquisition cost difference.

I assumed these would be the same for any vehicle were to acquire, and I am not sure how this would be quantified other than just have a miscellaneous charge every year.

NA, as we own the property the the vehicles operate out of. Someone that did have this could add these "miscellaneous" costs to a new row I suppose.
Two things: 1) You put down opportunity cost in your spreadsheet, but then ignore the opportunity costs of overhead and property? That is inconsistent valuation of resources.

2) Even if you value property as a sunk cost (and therefore to be ignored), that property is still generating costs that must be covered by your income stream. Those costs include property taxes, business taxes, insurance, utilities, etc.

Same goes with your overhead costs. Your office equipment, software, accounting, withholding, workman's comp, licenses, health, phone, paper, etc. are all costs that must be covered by the income stream of your investment. And, it should include salaries - even your own. If you are not working here, then you would be working somewhere else.

You may have other income streams from other investments that already cover these costs. From a cash-flow viewpoint, that simply means that you are achieving economies of scale. But it does not mean that the new investments are not incurring these costs.

I am not sure I understand this. As I mentioned above, I did not do a profit analysis in the spreadsheet as I was just trying to get an accurate idea of the actual cost to operate.
You should not make an investment without having an expected return on that investment. This, after all, is the simplest example of opportunity cost - what return can you achieve from an alternative investment. You cannot make that comparison if you do not account for it. Further, note that profit on your investment is separate and apart from your time value. Profit is the return on "dollars". Salary is the return on your time.
 
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doug57

New member
jotunheim, I like your spreadsheet:thumbup:. I agree with you that you are including cost of vehicle twice. Best to leave off acquisition cost. Keeping it simple is best. Depreciation would be the estimated loss on resale from one period to the next, not including sales expenses since you are not actually selling it. Your declining value seems reasonable. I agree with leaving off opp cost since you are not comparing this investment to other uses of the $. You want your rough cost per mile which I think you have accomplished here so you can determine your pricing. I might suggest you separate your assumptions so that you can make changes more easily as well as make it easier to understand. You could even have different mileage per year since years with more repairs may require time out of service. You will want to be very careful with mileage as the more you estimate the less you charge/make per mile. Counter intuitive to the profit motive. When setting a price per mile we have to be competitive but not too low. Comparing your computed rate to your customers to the going rate should give you a good idea where you want your final charge to fall. see suggestions - https://docs.google.com/spreadsheet/ccc?key=0As4XhMqXtdWidE1jMm04OUxLdnBGVy1RRU1tZDR5WHc
 

SledMyers

New member
Hey guys,

I currently work with a forwarder but looking into getting into owning assets. I'm creating a cost analysis proforma which the info on this thread has been really informative. My only question is if anyone has experience hiring drivers, and how you might account for that cost and what standard driver rates might be per mile or salary.
 

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