Cost Per Mile and Its Traps

Cost per mile is the number fleets compare on, and it is comparable only when several things are held constant.

What it should contain

Fuel or energy.

Maintenance and repair, scheduled and unscheduled.

Tyres.

Depreciation or finance, apportioned.

Insurance, tax and licensing.

Downtime, where you have the figure, stated separately so the comparison can be made with and without it.

The four traps

Mixing vehicle types. A fleet average across vans and heavy vehicles describes nothing.

Excluding standing costs, which makes a little-used vehicle look cheap per mile when it is the most expensive thing you own per year.

Using book depreciation rather than actual disposal proceeds, which flatters or punishes depending on the accounting policy.

Comparing across work types. Urban multi-drop and trunk work produce different figures for identical vehicles, and the difference is the work.

The companion measure

Cost per operating hour, for vehicles where distance is a poor proxy for use.

Urban delivery, plant, refrigerated units running at a standstill.

A vehicle with low mileage and high engine hours is being worked hard and cost per mile will say the opposite.

Report both where the fleet has both types, and say which applies to which.

Making comparisons that mean something

Like vehicles, like work, like period.

Within those, differences are real and worth investigating.

Across those, differences are arithmetic.

Most fleet reporting compares across and concludes about people or sites, which is how a vehicle type problem becomes a depot performance conversation.

The trend matters more than the level

A fleet's absolute cost per mile depends on the work, the geography and the vehicle mix.

Its direction depends on how the fleet is managed, which is the thing you control.

Track by cohort — vehicles of the same age and type — over time, which separates ageing from management.

The measure behind the measure

How much of the figure is unscheduled?

Scheduled cost is predictable and can be planned.

Unscheduled cost is the one condition monitoring is supposed to reduce, and tracking it separately is how you find out whether any of this is working.

Report cost per hour alongside

For vehicles where distance is a poor proxy.

Urban delivery, plant, refrigerated units running at a standstill.

A vehicle with low mileage and high engine hours is being worked hard, and cost per mile will say the opposite.

Report both where the fleet has both types, and state which applies to which.

A practical configuration prompt

During configuration, use accounting time tracking tools to prompt questions about identifiers, ownership and output. Treat the page as a starting point and document each assumption.