TruckProfitFixed vs. Variable Costs: Why the Distinction Matters
Splitting expenses into fixed and variable isn't just a bookkeeping category — it changes how a specific number should be used. This guide covers the distinction and two strategic implications that follow from it.
The one-question test
Ask of any expense: does this change if I drive 500 more miles this month? If no, it's fixed. If yes, it's variable. A truck payment doesn't change whether you drive 5,000 or 15,000 miles — fixed. Tire wear scales with how much you drive — variable.
Why each category belongs where it does
- Truck/trailer payment (fixed) — a loan or lease amount set by contract, unrelated to usage.
- Insurance (fixed) — a premium set by policy term, not by miles driven within that term.
- Permits and licensing (fixed) — an annual or quarterly fee independent of mileage.
- Maintenance and repairs (variable) — wear-driven; more miles means more service intervals.
- Tires (variable) — tread wears down proportionally to distance driven.
Implication 1: fixed cost per mile shrinks as you drive more
Because fixed costs stay the same in total, spreading them over more miles lowers the fixed cost per mile. The variable cost per mile stays roughly constant regardless of mileage. Here's the same $2,550 in monthly fixed costs spread over four different mileage levels:
| Monthly miles | $2,550 fixed cost ÷ miles | Fixed cost per mile |
|---|---|---|
| 8,000 | 2,550 ÷ 8,000 | $0.319 |
| 10,000 | 2,550 ÷ 10,000 | $0.255 |
| 12,000 | 2,550 ÷ 12,000 | $0.213 |
| 15,000 | 2,550 ÷ 15,000 | $0.170 |
The same truck, same fixed costs, same driver — but a materially different fixed cost per mile depending purely on how many miles get driven that month. This is why a cost-per-mile figure from a light month can look worse than reality, and vice versa.
Implication 2: marginal decisions should weigh variable cost, not the full blend
If you're deciding whether to accept one additional load on a truck that's already scheduled to run this month regardless, your fixed costs are already committed either way — the truck payment and insurance don't change based on this one decision. The true marginal cost of that specific load is closer to your variable cost per mile plus fuel, not your full blended cost per mile.
This reasoning applies narrowly, to an isolated marginal decision on an already-committed truck — it is not a justification for pricing every load at variable cost. Do that consistently and the fixed costs never get covered.
Common miscategorization mistakes
- Treating maintenance as fixed just because you budget the same amount every month — the actual driver is mileage and wear, even if your budgeting is smooth.
- Forgetting that a truck payment is fixed even during a slow month with few miles — it still needs to be paid.
Next step
The Cost Per Mile Calculator already outputs your fixed and variable cost per mile separately. See How to Calculate Your Trucking Cost Per Mile for a worksheet to build your own numbers, or the Load Profit Calculator to apply this to a specific load.