How do I work out route profitability for a delivery or haulage business?
Route profitability is the revenue earned on a route minus all costs of running it, over the same period. Costs include fuel, driver time, vehicle costs, tolls, maintenance and a fair share of overhead. Dividing the profit by revenue gives a route margin.
It matters because some routes quietly lose money while the fleet overall appears profitable.
Commonly misread:
- Using revenue per route without matching the actual costs of the vehicles and drivers used.
- Leaving out the return leg when it runs empty.
- Ignoring waiting time at customer sites.
- Spreading overhead evenly, which can make short routes look worse or better than they are.
You need billing data matched to tracking and fuel data per trip. Review route profit monthly and check whether poor routes can be repriced, re-sequenced or dropped.
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