Delivery Cost Calculator

Delivery route cost and time estimation combines vehicle operating costs, driver wages, and distance/time calculations to determine whether a delivery operation is profitable and how to optimize route efficiency.

Total delivery cost formula: Total Cost = (Distance × Cost per Mile) + (Time × Hourly Driver Cost) + Fixed Costs

Cost per mile breakdown: Cost per Mile = Fuel Cost + Depreciation + Insurance + Maintenance

• Fuel: (Distance ÷ MPG) × Fuel Price per Gallon
• Depreciation: ~$0.08–$0.15/mile for vans; higher for heavy trucks
• Insurance: ~$0.05–$0.10/mile (annual premium ÷ annual miles)
• Maintenance: ~$0.05–$0.12/mile

IRS standard mileage rate (2024): $0.67/mile (covers all vehicle costs; commonly used for reimbursement and tax deduction)

Delivery time formula: Total Route Time = Driving Time + Stop Time × Number of Stops + Loading Time

What each variable means:

• Driving time = Total route miles ÷ Average speed (consider traffic; 20–30 mph in urban areas, 45–55 mph on suburban routes)
• Stop time = time at each delivery: unloading + customer interaction + documentation; typically 5–15 minutes per residential stop, 15–30 minutes per commercial stop
• Load factor — partial loads waste capacity; full truck utilization maximizes efficiency
• Route optimization — a poorly planned 15-stop route might add 30–40% extra miles versus an optimized sequence; route optimization software (Circuit, OptimoRoute) typically saves 15–25% in fuel and time

Reference: delivery cost benchmarks:

• Small van, suburban route: $0.60–$0.90/mile total cost
• Cargo van, urban route: $0.80–$1.20/mile
• Box truck: $1.00–$1.80/mile
• Last-mile delivery cost (e-commerce): $8–$15 per package average

Worked example: 10-stop route. Total distance: 85 miles. Cargo van averaging 22 MPG. Gas $3.50/gallon. Driver: $22/hour. Average stop time: 10 minutes. Drive time: 2.5 hours.

• Fuel cost = (85 ÷ 22) × $3.50 = 3.86 × $3.50 = $13.52
• Vehicle costs (depreciation + maintenance + insurance) ≈ $0.22/mile × 85 = $18.70
• Driver wage = (2.5 hours driving + 10 stops × 10min/60 = 1.67hr) × $22 = 4.17 × $22 = $91.67
• Fixed overhead allocation (insurance, dispatch software) = $15 (estimated daily allocation)
• Total route cost = $13.52 + $18.70 + $91.67 + $15 = $138.89 for 10 deliveries
• Cost per delivery = $13.89

If charging $18/delivery: profit = $4.11/delivery × 10 = $41.10 route margin — viable but thin. Adding 2–3 more optimally routed stops increases margin significantly.