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How to calculate the break-even freight rate for a truck trip

The break-even freight is the lowest amount a trip can pay without losing you money. This guide shows how to work it out properly, including the costs that are easy to forget, and how to price for a real margin.

Updated 31 October 2026 · 8 min read · Figures are worked examples, not market rates

Why most break-even numbers are too low

When a load is offered, the usual check is quick: diesel plus tolls plus the driver's trip money, compared with the freight. If the freight is higher, the truck goes.

That check leaves out three things that are real costs of the trip, even though no one hands over cash for them on the day:

1. The empty kilometres. A truck that runs 750 km loaded often runs another 200–300 km empty to get back or reach the next load. That diesel is paid for by this trip.
2. Wear. Tyres, servicing and repairs build up with every kilometre. If you don't set money aside per km, the bill arrives later and wipes out the profit of trips that looked fine.
3. Fixed costs. The driver's salary, insurance, permits and road tax are paid whether the truck runs or not. Each trip has to carry its share.

Then there is commission. If the broker takes a percentage of the freight, the cost rises with the rate you charge, which changes the arithmetic. More on that below.

Step 1: Add up the direct cost of the trip

Direct costs are the ones that only happen because this trip happens. In the example below the truck runs 750 km loaded and 250 km empty, so the cycle is 1,000 km. These are example figures: use your own diesel price, mileage and toll amounts.

Watch out: use the mileage your truck actually gives when loaded on this kind of route, not the brochure figure. A truck that does 4 km/l rather than 4.5 km/l uses about 12% more diesel. On this trip that is roughly ₹2,500.

Step 2: Give the trip its share of fixed costs

Add up the costs you pay every month regardless of trips: driver salary, insurance, permits, road tax, parking and any office costs. Divide by the number of trips the truck actually completes in a month, not the number you hope for. (Our guide on how many trips a truck can really do in a month shows how to count this honestly.)

So the full cost of this trip is ₹36,000 + ₹6,000 = ₹42,000.

Leave the EMI out of this figure. An EMI is a loan repayment, not an operating cost, and putting it into the trip cost mixes two different questions. Check the EMI against the month as a whole instead. See why a profitable truck can still run short of cash.

Step 3: Allow for commission

Suppose the broker takes 2.5% of the freight. It is tempting to add 2.5% to your cost: ₹42,000 × 1.025 = ₹43,050. But the commission is 2.5% of the freight, not of your cost. At ₹43,050 the broker takes ₹1,076, and you are left with ₹41,974, which is ₹26 short.

The correct way is to divide:

Break-even freight = full trip cost ÷ (1 − commission rate)

Spread over the 750 loaded kilometres, the break-even is about ₹57.4 per loaded km. A load paying less than that loses money on this route, with this truck, even if it covers the diesel.

Step 4: Price for the margin you actually want

Break-even is a floor, not a price. The business also needs to earn something for its risk, its time and its growth. This is where the most common pricing mistake happens.

A margin is profit as a share of the freight. A markup is profit as a share of cost. They are not the same. To make a 20% margin you cannot multiply cost by 1.2. You have to divide, and commission comes off the same freight:

Freight for target margin = full trip cost ÷ (1 − target margin − commission rate)

The markup method quotes ₹2,534 less per trip. At 8 trips a month that is about ₹20,000 a month of margin you thought you were charging but never received.

When no price works: if commission and other freight-linked charges add up to more than what is left after your target margin, the formula's bottom line becomes zero or negative. That means no freight rate reaches the target, because each extra rupee is eaten by the charges that grow with it. Lower the target or renegotiate the percentage before you quote.

Quick checklist before you accept a load

• Fuel counted for loaded and empty kilometres, at your truck's real mileage.
• Tolls for the full route, both directions if the truck returns empty.
• Driver allowance, loading and unloading, and any detention charges you will bear.
• A per-km reserve for tyres and maintenance.
• A fixed-cost share based on trips you actually complete in a month.
• Commission handled by dividing, not by adding a percentage.
• If the quote includes GST, remove the GST before comparing it with your break-even.