The cost per delivery formula is route cost divided by drops. Put in one day on one of your own routes and it splits that cost out per drop, per case and per mile.
The driver
$
Wage plus payroll taxes and benefits, not the rate on the offer letter.
hours
Clock in to clock out, including the pre-trip check and the load.
The truck
miles
Dock back to dock, so the empty miles at both ends are counted.
mpg
A loaded straight truck on close city stops lands near 8.
$
What you pay at the pump or on a fuel contract.
$
Lease or depreciation, insurance, maintenance and plates, divided by route days.
What the route delivers
drops
Stops the driver makes in the day. Cost per drop doubles as a delivery price calculator: it is the floor any delivery charge has to clear.
cases
Total cases loaded for the day. This is how to calculate freight cost per unit: route cost over the cases that route carries.
days
A weekday route usually runs 21 or 22 days a month.
Cost per drop
$27.18
$380.50 of route cost across 14 drops
Total cost for the day
$380.50
$224.00 driver, $61.50 fuel, $95.00 vehicle
Cost per case
$0.91
$380.50 across 420 cases, about 30 a drop
Cost per mile
$3.17
Across 120 route miles
Fuel for the route
$61.50
15 gallons at $4.10 a gallon
Monthly cost of the route
$8,371
At 22 route days a month
The drop costs $27.18 whether it is 10 cases or 50. At 10 cases that is $2.72 a case against a $0.91 average, which is what a delivery minimum is actually for.
A wrong case on the truck is a second trip at full route cost.
VoiceOrder Solutions gives every account an order guide tied to your own pricing and SKUs, and confirms the order before it reaches the pick list.
Estimates only. A route level distribution cost calculation, so it does not carry warehouse overhead, admin, or the cost of a redelivery.
$27.18
What one drop costs on a 14 stop route
$2.72
Route cost a case when a drop is only 10 cases
$0.91
Route cost a case across all 420 cases on the truck
Sound Familiar?
A stop costs the same whether the truck leaves 10 cases or 50
Route cost gets budgeted by the month and spent by the stop. Most distributors never split it the second way.
Delivery is free, we build it into the price.
It is in the price somewhere. At $27.18 a drop, the big orders are quietly paying for the small ones, and nobody has priced that choice.
That stop is small, but it is still profit.
A 10 case drop carries $2.72 of route cost a case against a $0.91 average. Check the gross margin on those cases before you keep the stop.
We can add a stop, the truck is out anyway.
The driver hour and the truck day do not stretch for free. Eight hours and $95.00 of truck are exactly what makes a drop cost $27.18.
How It Works
How to use the delivery cost calculator
Three groups of inputs and one real day. The day total is the number everything else divides.
1
Cost the driver and the truck
$28.00 an hour over 8 hours is $224.00 of driver. Add $95.00 for the truck day, lease, insurance, maintenance and plates included.
2
Add the miles and the fuel
120 miles at 8 mpg burns 15 gallons, so $4.10 a gallon is $61.50. The day lands at $380.50.
3
Split the day by drops, cases and miles
14 drops makes it $27.18 a delivery, 420 cases makes it $0.91 a case, and 120 miles makes it $3.17 a mile.
What You See
What the calculator shows you
Cost per drop
What one delivery costs before a case comes off
A $380.50 day across 14 drops is $27.18 a stop. That figure holds whether the drop is 10 cases or 50, which is why it is the floor a delivery charge has to clear.
A cost per drop is only useful if it changes a minimum, a price, or which stops stay on the route.
Set the minimum above $27.18
Charge for delivery, or price it in
Rank accounts by cases a drop
Work the lightest stops first
Cost a redelivery properly
Give reps the per drop number
Fill the truck before adding a day
Recost the day when fuel moves
Hold one minimum across reps
Six Levers
What actually moves the cost of a drop
Three of these set the cost of the day. The other three decide how far that day has to stretch.
Driver hours
$28.00 an hour over 8 hours is 58.9% of the day. A $45.00 driver takes the same route to $516.50 and the drop to $36.89.
The truck day
$95.00 of lease, insurance, maintenance and plates is 25.0% of the day, and it is spent whether the truck runs 60 miles or 120.
Fuel and mpg
120 miles at 8 mpg is 15 gallons, so $61.50 at $4.10. That is 16.2% of the day, so fuel is rarely where the answer is.
Drops in the day
The same $380.50 over 14 stops is $27.18 each. Fewer stops in the day means a dearer stop, with nothing else changing.
Cases per drop
420 cases averages 30 a drop. A drop of 10 cases costs $2.72 a case, three times the route average, and 50 cases costs $0.54.
Order accuracy
A wrong case is a second trip, and a second trip costs the full $27.18 again. Order accuracy is a route cost, not an office cost.
See how VOS gives every account its own order guide
VoiceOrder Solutions builds each customer an order guide tied to your own SKUs and pricing, and captures orders 24/7, so an after-hours order is waiting when the pick list is built instead of sitting in voicemail.
Add the driver, the fuel and the truck for one day, then divide by the stops. A $28.00 driver over 8 hours is $224.00, 120 miles at 8 mpg is $61.50 of fuel at $4.10, and the truck day is $95.00. That $380.50 across 14 drops is $27.18 a delivery.
Where should a delivery minimum be set?
Above the margin a stop has to earn, not at a round number. At $27.18 a drop, an account buying at a 20% margin has to order $135.90 of product before the stop pays for itself. Set the minimum so the smallest order on the truck still clears that.
Should you charge customers for delivery?
Either charge for it or price it in, but do it knowing the number. At $0.54 a case, a 50 case drop absorbs the stop without anyone noticing. At $2.72 a case, a 10 case drop does not, so that is where a delivery charge or a minimum belongs.
What does a light drop do to your margin?
It takes it a case at a time. The same $27.18 stop spread over 10 cases is $2.72 a case against a $0.91 route average. If the gross margin on those cases is under $2.72, the delivery costs more than the order earns.
Should you drop an account that orders too little?
Change the frequency or the minimum before you drop it. An account taking a stop every week at 10 cases can take one every other week at 20 cases, and the route cost falls from $2.72 a case to $1.36 with the same volume sold.
How do you count the truck's fixed cost in a delivery cost?
As a cost per route day, not a cost per mile. Take the lease or depreciation, insurance, maintenance and plates for the year, then divide by the days the truck actually runs. At $95.00 a day that is 25.0% of a $380.50 route before the truck leaves the yard.
What is the cost per case on a delivery route?
Route cost over the cases that route carries. $380.50 across 420 cases is $0.91 a case, and $3.17 a mile across 120 miles. Load 840 cases on the same day and the case cost falls to $0.45, while the cost per drop stays at $27.18.
Get the order right before the truck is loaded
VoiceOrder Solutions digitizes and confirms every order before it reaches the pick list, so a wrong quantity does not come back as a second trip to the same stop.
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