A truck can be on the road every day and still lose money. The invoice shows what the customer paid. It does not show what the trip cost. Trip costing closes that gap and it takes less time than most owners expect.
Know your cost per kilometre
Every trip carries three layers of cost. Only the first one is obvious.
| Cost layer | Examples | How to charge it to a trip |
|---|---|---|
| Running costs | Fuel, driver and turnboy allowances, parking, loading fees | Actual amount for that trip |
| Wear costs | Tyres, servicing, repairs, spares | Last year's spend divided by kilometres driven |
| Fixed costs | Insurance, licences, tracking, loan repayments, office | Annual cost divided by trips in a year |
Cost the round trip, not one way
Quotes often cover the loaded leg only. If the truck comes back empty, the fuel and driver time for the return belong to the same job. Price on the round trip and treat any return load as extra margin.
A worked example
An illustrative 900 km round trip, loaded one way:
- Fuel: 300 litres at KES 170 = KES 51,000
- Driver and turnboy allowances: KES 8,000
- Wear at KES 12 per km: KES 10,800
- Share of fixed costs: KES 15,000
The trip costs KES 84,800. Charge KES 100,000 and it earns KES 15,200. Charge KES 80,000 because a competitor did and the truck pays to work.
Three places the margin leaks
- Fuel. Compare litres bought with kilometres on the tracker for each truck. A consumption rate that drifts week after week needs a question asked.
- Waiting time. Days held at a site, depot or border cost allowances and lost trips. Put a daily waiting charge in the contract.
- Missing invoices. Fuel, spares and repairs without an eTIMS invoice cannot be deducted for income tax. Use stations and garages that issue them and ask drivers for an invoice before an advance is cleared.
Five steps for this month
- Work out wear cost per kilometre from last year's repair and tyre spend.
- Cost your last ten trips on a round trip basis.
- Check each truck's fuel use against its tracker kilometres.
- Add a waiting time clause to your standard quote.
- Make an eTIMS invoice a condition of clearing every driver advance.
Run trucks, vans or a fleet?
We set up trip costing, fuel and allowance controls and eTIMS ready records for transport and logistics businesses across Kenya.
Book a Free Finance Health Check