Trip profitability is a key survival metric in logistics. We detail the calculation formula, hidden costs, and the impact of automation on profit.
Calculation of trip profitability in TMS
Today, in 2026, the freight transport market is one of the most competitive and dynamic sectors of the economy. Rising fuel prices, the introduction of new environmental tolls in Europe, and constant changes in the labor market force transport companies to operate under conditions of minimal margins. In such a situation, making an error in calculating the cost of a trip by even 5% can turn a potentially profitable trip into a loss-making one.
Many carriers still determine the price intuitively, relying on experience or average rates on freight exchanges. However, this approach is fundamentally flawed. Exchange rates do not take into account the specifics of your fleet, the level of wear of a particular truck, and the actual expenses of your company. In this large expert article, we will analyze in detail, step by step, how to correctly calculate the profitability of a trip, what hidden costs logisticians most often forget, and how modern TMS (Transport Management Systems) help automate this process and protect the business from financial losses.
What is trip profitability and why is it important?
Trip profitability is an indicator of the financial efficiency of a specific transport operation. It reflects the ratio of the net profit received for the trip to the total amount of expenses for its execution.
The calculation formula is very simple:
`(Revenue from the trip - Total costs) / Total costs * 100% = Profitability (%)`
But the difficulty lies not in the formula, but in correctly calculating the total costs. They are divided into direct (variable) and indirect (fixed) costs. If a logistician only considers fuel and the driver's salary, they do not see the real picture, and the company loses thousands of dollars in profit every month.
Step 1. Calculation of direct (variable) costs
Direct costs arise only when the vehicle is performing a trip. If the truck is parked at the base, these costs do not exist.
1. Fuel costs (Diesel and AdBlue)
Fuel accounts for 30% to 40% of the total cost of transportation. To correctly calculate these costs, you need to consider:
* Base consumption rate of the specific truck.
* Load factor: every ton of cargo increases fuel consumption by an average of 0.35 - 0.4 liters per 100 km.
* Terrain and weather conditions: driving through mountainous areas (e.g., the Alps) or in winter requires the use of an increasing multiplier (usually +5-10%).
* Dead miles (empty run): these are the kilometers from the base to the loading location or from the unloading location to the next loading. These kilometers are not paid by the client, but fuel is consumed on them.
* AdBlue costs: calculated as 4-6% of the volume of diesel fuel consumed.
Fuel calculation example:
The vehicle will drive 1000 km with a cargo of 20 tons. The base rate is 25 L/100 km. With cargo - 32 L/100 km. Total consumption = 320 liters. At a price of 1.5 EUR/liter, fuel costs will amount to 480 EUR.
2. Driver's salary and daily allowance
Driver remuneration models vary, but all of them must be included in the cost price:
* Payment per kilometer (e.g., 0.15 EUR/km).
* Rate per trip (fixed).
* Daily allowance (per diem), which is paid for every day spent on the trip, including weekends, if the driver is in the cabin.
* Payroll taxes (a frequently forgotten expense item).
3. Road tolls, eco-taxes, and bridges
In Europe, road tolls can make up a significant part of the expenses - sometimes up to 25% of the trip cost.
* Eurovignette or systems like Toll Collect (Germany), Viapass (Belgium).
* Tolls for bridges, tunnels (e.g., Mont Blanc), or ferry crossings.
* Fees based on the ecological class (Euro-5, Euro-6). Since 2023-2024, toll rates in Germany have been strongly tied to CO2 emissions, making older trucks highly unprofitable.
4. Additional expenses on the trip
* Paid parking lots.
* Payment for customs procedures (T1, EX1, declaration processing).
* Loading/unloading fees (if done by third-party loaders or if a pallet jack is needed).
Step 2. Calculation of indirect (fixed) costs and depreciation
The company incurs fixed costs regardless of whether the trucks are driving or parked. These costs must be "spread" over each kilometer driven or each day the vehicle is working. Without this step, your profitability calculation will be completely incorrect.
1. Vehicle depreciation
A truck wears out and loses value with every kilometer driven. If you do not set aside money for depreciation on every trip, then in 5 years, when the truck needs to be replaced, the company simply will not have the funds for it.
* Example: A truck and a semi-trailer cost 120,000 EUR. The operational life until sale is 5 years (or 600,000 km). The residual value is 40,000 EUR. Therefore, the machine loses 80,000 EUR over 600,000 km. Depreciation is 0.13 EUR for every kilometer driven.
2. Maintenance and repair (M&R)
This includes the costs of tires, oils, filters, brake pads, and unpredictable breakdowns. Experts recommend setting aside a fixed amount for M&R for each kilometer (e.g., 0.05 - 0.08 EUR/km depending on the age of the vehicle).
3. Insurance
All insurance policies (Liability, Casco, Green Card, CMR insurance, cargo insurance) need to be divided by 12 months and then by the number of working days of the machine.
* Example: The total cost of insuring the machine is 3600 EUR per year (300 EUR per month). If the machine works 20 days a month, the insurance cost is 15 EUR per day. For a 5-day trip, you must add 75 EUR to the expenses.
4. Administrative expenses (Office, communications, software)
The office's work must also be paid from the profits of the trips:
* Salaries of dispatchers, logisticians, accountants, and the manager.
* Office rent, communication services, internet, GPS tracking, subscriptions to transport exchanges, payment for CRM/TMS systems.
All these costs are divided by the number of vehicles in the fleet and by the number of working days. Typically, this adds another 20-40 EUR of expenses for each day of the trip.
Step 3. Forming the final price (Rate)
Having gathered all the expenses together, we get the cost price of the trip.
Cost of the trip = (Direct costs) + (Depreciation per km * mileage) + (Fixed daily costs * trip duration)
Only after this can you add the desired profit.
For example, your cost price was 1500 EUR. You want a profitability margin of 15%. Then the rate for the client should be: 1500 * 1.15 = 1725 EUR.
The impact of "empty runs" on the rate
The biggest killer of profitability is empty mileage. If you are offered a good rate of 2 EUR/km for a 500 km trip (1000 EUR), but you have to drive 200 km empty to the loading location, your real rate is not 2 EUR, but 1.42 EUR/km (1000 EUR / 700 km total mileage). Always calculate the round trip!
How to automate this process using TMS?
Calculating every trip manually in Excel is a path to errors. A logistician can forget to add the cost of a ferry crossing, fail to account for weekends for the driver's daily allowance, or simply make a mistake with zeros. Moreover, calculating a complex round trip with three unloading points in Excel takes from 15 to 30 minutes.
Implementing a specialized industry TMS (Transport Management System) completely solves this problem. In modern ecosystems (such as the CarGoPro platform), the process looks like this:
Standards database: The system already contains filled digital profiles of each truck (with its fuel consumption rate) and data on the company's fixed daily expenses.
Smart routing: The logistician simply enters the loading and unloading points. The system automatically integrates with maps, calculates the mileage (taking into account truck restrictions), and calculates the number of toll roads.
Instant financial forecast: In 1 second, the TMS provides a complete calculation: fuel costs, driver's salary, depreciation, and administrative expenses.
Minimum margin control: The system highlights the trip in red if the rate offered by the client is below the break-even point. The logistician physically cannot accept a loss-making cargo without the manager's approval.
Summary
In 2026, victory in the logistics market goes not to the companies that simply drive a lot, but to those who know how to calculate accurately. Profitability is the compass of your business.
For the effective growth of the company, it is necessary to stop determining rates "by eye" or adapting to exchange dumping. Use a scientific, mathematical approach to pricing: carefully calculate variable and fixed costs, always include depreciation, and, most importantly, automate these processes using professional TMS solutions. This will free up the time of your logisticians to search for profitable contracts and protect your profit from the impact of the human factor.