Owner-Operator Math: What $3/Mile Actually Means

The broker offers $3.00 per mile for a 500-mile load. That’s $1,500 gross. Sounds decent, right?

But what’s your actual profit? If you don’t know your cost per mile, you can’t answer that. And many owner-operators don’t know their real numbers.

What Goes Into Cost Per Mile

Your cost per mile (CPM) includes everything it takes to move your truck:

Fixed costs (same whether you drive or not):

• Truck payment
• Insurance (liability, cargo, physical damage)
• Permits and licenses
• Health insurance (yours)
• Parking/yard fees
• ELD subscription
• Accounting/bookkeeping

Variable costs (increase with miles):

• Fuel
• Maintenance and repairs
• Tires
• Tolls
• Scale fees
• Lumpers

Often forgotten:

• Depreciation (if truck is paid off)
• Self-employment taxes
• Reserve fund for breakdowns
• Your actual pay

Breaking Down Real Numbers

Let’s calculate for a typical owner-operator running 10,000 miles/month:

Fixed Costs (Monthly)

Expense	Amount
Truck payment	$2,200
Insurance	$1,200
Permits/IFTA	$150
Health insurance	$600
Parking	$150
ELD/software	$50
Accounting	$100
Total Fixed	$4,450

Fixed CPM: $4,450 ÷ 10,000 = $0.445/mile

Variable Costs (Per Mile)

Expense	Per Mile
Fuel (7 MPG @ $4/gal)	$0.57
Maintenance reserve	$0.10
Tires (prorated)	$0.03
Tolls/scales	$0.02
Total Variable	$0.72/mile

Total Operating Cost

Total CPM = Fixed + Variable
Total CPM = $0.445 + $0.72 = $1.165/mile

Running 10,000 miles at $1.165 CPM costs $11,650/month in expenses.

What About Your Pay?

Operating cost isn’t profit. You need to pay yourself.

If you want to make $70,000/year (about what a company driver earns):

Required pay: $70,000 ÷ 12 = $5,833/month
Pay per mile: $5,833 ÷ 10,000 = $0.58/mile

Total required rate:

Break-even + Pay = $1.165 + $0.58 = $1.75/mile minimum

Back to That $3/Mile Load

Now we can evaluate:

• Gross: $3.00/mile × 500 miles = $1,500
• Operating cost: $1.165 × 500 = $583
• Net before pay: $1,500 - $583 = $917

Per-mile profit: $1.84/mile

That’s actually a good load. Your profit covers pay and builds reserve.

The Problem With Low Rates

What about a $1.50/mile load?

• Gross: $1.50 × 500 = $750
• Operating cost: $583
• Net before pay: $167

Per-mile profit: $0.33/mile

At 10,000 miles/month of $1.50 loads, you’d net $3,300—less than half of $70k/year pay target. You’re essentially working for minimum wage while destroying your truck.

Why Many O/Os Fail

They take loads based on gross revenue, not profit margin. Common mistakes:

Only counting fuel: “I get 7 MPG, fuel is $4, so my cost is $0.57/mile. A $2.00/mile load gives me $1.43 profit!”

No—you forgot insurance, payment, maintenance, and everything else.

Ignoring fixed costs: “The truck is parked anyway, I might as well take a cheap load.”

Your fixed costs accrue whether you move or not. Every mile needs to cover its share.

Not paying yourself: “I made $8,000 last month!”

Before or after paying yourself? Operating income isn’t personal income.

Deadhead Economics

Empty miles kill profitability. If you deadhead 100 miles to pick up that 500-mile load:

• Total miles: 600
• Total gross: $1,500
• Effective rate: $2.50/mile (not $3.00)

Always calculate your revenue per total mile, including repositioning.

Fuel Is Your Biggest Variable

At 7 MPG and $4/gallon, fuel is $0.57/mile. At 6 MPG and $5/gallon, fuel is $0.83/mile.

That swing of $0.26/mile is huge over 10,000 miles ($2,600/month difference).

Fuel efficiency matters:

• Proper tire pressure
• Speed management (55 vs 65 costs ~15% more fuel)
• Idle reduction
• Aerodynamic devices

The Minimum Rate You Should Take

Calculate your floor:

Minimum Rate = Operating CPM × 1.5

For our example: $1.165 × 1.5 = $1.75/mile

Below this, you’re not making reasonable money. The 1.5x multiplier accounts for:

• Deadhead miles
• Downtime
• Reserve building
• Actual profit/pay

Some experienced O/Os use 1.8x or 2x as their minimum.

What Successful O/Os Do

Know their numbers: They track every expense and know their true CPM.

Set minimums: They won’t take loads below their threshold.

Factor in all miles: Revenue per total mile, not per loaded mile.

Build reserves: $10-20k cash reserve for breakdowns and slow periods.

Choose lanes wisely: Consistent routes reduce deadhead and build relationships.

Calculate Before You Accept

That $3/mile load? Great. That $1.80/mile load? Depends on your CPM. That $1.20/mile load? Almost certainly a loss.

Know your numbers. Run them on every load. Your business depends on it.