True RPM vs the Posted Rate: A Worked Example

Why this matters. The rate on a rate confirmation is usually a rate per loaded mile. Your truck, your fuel and your driver's day were spent on every mile, including the empty ones you drove to reach the pickup. A load can look fine at the posted rate and still leave very little per mile driven. Working out the second number takes five minutes and a calculator.

Example data

All figures here are invented to show the arithmetic. They come from the pre-filled example in our load profit calculator. They are not averages, benchmarks or what any carrier earns. We publish no market rates, so there is no "good" number here. The only fair comparison is with your own cost per mile.

The load

Example data: a load pays a line haul of $1,850. It runs 612 loaded miles, and the truck drove 83 empty miles to reach the pickup, so 695 miles in all. Diesel is $6.20 a gallon at 6.8 mpg. The driver is paid $0.62 per loaded mile. Other per-mile cost (tires, maintenance, wear) is $0.22 per mile driven, and tolls and other per-load costs are $85.

Three versions of the same load

Example data: one load, three per-mile numbers
Measure	Formula	Result
Rate per loaded mile (posted)	$1,850 / 612	$3.023
Revenue per all mile	$1,850 / (612 + 83)	$2.662
Profit per all mile	$598.98 / 695	$0.862

Source: worked example on the load profit calculator. The per-mile figures are our own arithmetic on those inputs.

The first number is what the broker quoted. The second is what the truck earned for the distance it drove. The third is what is left after the costs that moved with the load.

Where the money went

Example data: cost lines for the same load
Line	Working	Amount
Revenue	Line haul	$1,850.00
Fuel	695 miles / 6.8 mpg x $6.20	$633.68
Driver	$0.62 x 612 loaded miles	$379.44
Other per mile	$0.22 x 695	$152.90
Tolls and other	Per load	$85.00
Total cost	Sum of the four lines	$1,251.02
Profit	$1,850.00 - $1,251.02	$598.98

Note that the 83 empty miles still burned fuel and wore tires. They bought no revenue. That is the empty-mile drag: the gap between $3.023 and $2.662 is 36 cents on every mile you were paid for.

This profit is before fixed overhead such as truck payments, insurance and permits. To judge whether the week made money, compare it with your cost per all mile, which includes those. The cost per mile calculator works that out from a month of your costs and miles.

Three loads, one posted rate

Averaging makes it worse, not better. The true rate per mile guide uses a second invented example: a week of three loads that each pay exactly $3.00 per loaded mile.

Example data: same loaded rate, different weeks
Load	Revenue	Loaded mi	Empty mi	Per loaded mi	Per all mi
A	$1,500	500	100	$3.00	$2.50
B	$1,200	400	200	$3.00	$2.00
C	$900	300	50	$3.00	$2.57
Week	$3,600	1,200	350	$3.00	$2.32

Source: true revenue per mile guide, invented numbers. The week row divides total revenue by total miles ($3,600 / 1,550), not an average of the three rates.

With invented weekly costs of $3,250, the cost per all mile is $2.10 and the week's profit is $350, or $0.23 per all mile. Load B earned $2.00 per mile driven, below that $2.10. Every rate confirmation said $3.00. None of them showed it.

Divide totals by totals

The plain average of the three per-all-mile figures above is about $2.36. The right figure is $2.32. The average is too high because the short load C counts as much as the long ones. When you review a week or a month, add up revenue and add up miles, then divide.

What to do with it

Count every mile you drove. Use odometer or ELD miles, not the miles on the rate con, when you work out cost.
Count only revenue you were paid. Unpaid detention is a cost, not revenue.
Rank loads by profit per all mile. The order will not match the order of the posted rates.
Turn your cost into a floor. The minimum rate tool converts your cost per mile into a number to quote against.
Price the empty miles. The deadhead tool does it for one load.

The formulas, with fixed and variable costs and a full week, are in the true revenue per mile guide, and the shorter version is how to calculate revenue per all mile.

Common mistakes

Dividing by the miles on the rate con. That is fine for checking a quote. For cost, use the miles you drove.
Leaving the empty-mile field blank. A blank looks like zero and hides the problem.
Skipping fixed costs. A load can cover fuel and driver pay and still not cover the truck.
Judging one load as the whole picture. Use a month of loads, and re-run the figures when fuel or insurance changes.

If you want a number to ask drivers for, the odometer or ELD miles from the last drop to the pickup are the ones that matter. A guess skews every figure after it.

Check your own loads

An audit does this for 20 loads at once. We compare each load's posted rate with its rate per all mile and show the gap. Get a free audit to see which of your last 20 loads earn less per mile driven than they quote.