Break-Even Rate
The break-even rate is the minimum rate per mile a carrier must charge to cover all operating costs without making a profit or loss. Any rate above break-even generates net income.
In Depth
Your break-even rate equals your total monthly costs divided by your total monthly miles. If you spend $18,000/month and drive 10,000 miles, your break-even is $1.80/mile.
Knowing your break-even rate is critical when evaluating loads. Never accept a load below break-even unless there is a strategic reason (empty repositioning, maintaining a shipper relationship).
Usage Example
Example: 'My break-even is $1.92/mile. I won't take loads below $2.20/mile — I need margin for repairs and time off.'
Related Calculators
Related Terms
Cost Per Mile
Cost per mile (CPM) is the total operating cost divided by total miles driven in a given period. It includes both fixed costs (insurance, truck payment) and variable costs (fuel, maintenance) per mile.
Rate Per Mile
Rate per mile (RPM) is the gross revenue a carrier earns per mile driven. It is calculated by dividing the total load rate by total miles (loaded + deadhead) and is the most common profitability metric in trucking.
Operating Ratio
Operating ratio is total operating expenses divided by gross revenue, expressed as a percentage. A ratio of 85% means $0.85 of every dollar earned goes to expenses, leaving a 15% profit margin.
Frequently Asked Questions
How do I calculate my break-even rate?
Divide total monthly expenses by total monthly miles. Use the TruckLeap Cost Per Mile Calculator for a detailed breakdown.