Calculate the operating cost assigned to each shipment on a routed fleet run. The model combines time-based vehicle and driver costs, distance-based fuel and maintenance costs, route charges, and dispatch overhead, then divides the total by completed shipments. A separate cost-per-mile result helps distinguish expensive routes from routes that simply carry too few shipments.
The main result spreads the entered route-period cost over completed shipments. It rises when cost increases or shipment density falls.
Use consistent cost boundaries. If insurance, depreciation, benefits, or dispatch labor are already included in a rate, do not enter them again in overhead.
Eight vehicles for 8 hours cost $1,152 for vehicles and $1,792 for drivers. Mileage costs $691.20; fees and overhead add $500. Total cost is $4,135.20. Divided by 240 shipments, the result is $17.23 per shipment.
Include them if you want a fully loaded labor cost, but do not also place the same benefits in overhead.
Convert the relevant lease and ownership expenses into an hourly vehicle rate for the analyzed operating period.
A shorter route can still cost more per shipment if fixed time, dispatch, or vehicle costs are spread across fewer completed shipments.
Include their costs in the route total, while the denominator should match your chosen definition—normally completed shipments for delivered-unit cost.
Cost per shipment can still be calculated, but cost per mile is reported as not applicable because division by zero has no useful meaning.
| Variable | Meaning | Unit |
|---|---|---|
| V × H | Fleet operating hours | vehicle-hours |
| Cᵥ | Vehicle hourly cost | currency/hour |
| Cᴅ | Driver hourly cost | currency/hour |
| M × Cₘ | Distance cost | currency |
| N | Completed shipments | shipments |