[arpanjha]

We petrolhead T-Bhpians have various informed data for running costs for our cars, motorbikes and now even EVs. But does anyone have a fair idea for running costs for a commercial vehicle (mainly a commodity transporting Truck).

I am looking for this data for below reasons:
1. Come to a generalized idea at how much or by what margin % does transportation cost add up to the product's final cost. (Including the taxation portion)
2. How varied are running costs of commercial vehicles w.r.t. commodity, for example, how much does carrying vegetables cost vis-à-vis carrying steel or similar trends.
3. Maybe this is naive, but how different is the figure when compared to personal vehicle expenses.
4. Does cost per km vary w.r.t. inter city haulage, and long range haulage?

I am looking for a cost per km which includes fuel, maintenance, approximate manpower costs, tolls etc.

Mods, I could not find a suitable existing thread, if there is one, please merge this with the same.

[TheARUN]

I've never come across such a thread, thanks for starting this

I've been researching this as a pet subject for years. I would be able to explain this in a great detail but suffice to say for now, the thumb rule for a truck is Rs.50 per kilometre.

There is a place called Sankagiri near Salem in Tamil Nadu. Everybody in the town is somehow or the other connected to the trucking business. So much so that Ashok Leyland till a few years back sold a model called 'Sankagiri Express'.

The business model they follow there is the Owner rents the truck out to the Driver. The Driver gets paid 17 paise per kilometre and the truck is out running loads for 15+ days at a time. After 15+ days the truck comes back, the Driver hands over the earnings to the Owner minus his 17 paise per kilometre. There are many in-between calculations, eg. Pooja charges are deductible at 100Rs. per day. Loading and un-loading charges have to be paid by the Driver from his 17 paise. FastTag charges are borne by the owner. The Driver keeps and account of all expenses, fuel, commission paid to get load etc.

For long distance inter-city busses, the thumb rule is Rs.2 per Kilometer for the fare per passenger. Eg. Bangalore to Hyderabad is 600 kilometres so the fare per passenger should be 1,200 rupees per passenger

Its extremely complicated and time consuming to calculate the exact expenses

E.g. Tyres. Trucks come with steel belted radials from the show room, they get exchanged immediately for tubeless tyres. The good branded ones cost 35,000 a pair when I checked last, many use 'Chinese tyres' that cost 22,000 a pair. Tyres last from anywhere between 75,000 to 90,000 and then get retreaded to last another 40,000 kilometres. A tyre can be retreaded twice. Some tyres burst and last only 20,000 - 40,000 kilometres when new, some cannot be retreaded. Some can be retreaded only once, so very difficult to calculate the cost overall

Also, fuel expenses vary according to the terrain. On highways its 3+kmpl on ghat sections its, 1.5liters per kilometre. Depends on which route the truck gets load for

Trucking in the olden days used to be a 6 wheel affair, then with the 2213 from TATA it moved to 10 wheels, for sometime tractor tailers dominated, nowadays its the multi axle trucks, with anything from 10 to 20 tyres with 3 to 6 axles. There are all types of configurations, twin steer to 2 lift axles. Right now the winner is the Ashok Leyland 3520, with 2 twin steer axles in front and 8 tyres at the back in 2 axles, 1 drive and 1 dummy axle

Typing this while at work so kindly excuse

[Hispaniola]

Being from an Aftermarket company, expenses like axle shaft repairs, driveshaft repairs, clutch replacement etc are also very high. Quality repairs cost a lot. Trucks in mining activities have huge repair cost due to very frequent wear and tear of parts. Sourcing lower quality parts from here and there and retrofitting cheaper parts rather than OE parts results into major cast saving for truck owners.

I don't know how much it holds true in today's time but 10-15 years back, I heard a relative of mine say that all the earnings in first few years goes into EMIs and other costs and major savings come in form of the resale value of truck.

[arpanjha]

Wow @TheARUN, you have gathered a great lot of information, i’m sure we can build 2-3 models of cost per km based on types of terrain, types of load, types of vehicles new or old, avg run of range.
@Hispaniola yes there are so many costs beyond fuel, that is why I wanted to start this thread to bring out the potential cost points and then maybe form a few cost models.

[GutsyGibbon]

Originally Posted by TheARUN

I've been researching this as a pet subject for years. I would be able to explain this in a great detail but suffice to say for now, the thumb rule for a truck is Rs.50 per kilometre.

Does this cover liability insurance? Who pays for that? The driver or the truck owner. In the US it is recommended that they buy coverage for $1M to $5M, as the damage that they can cause is huge. Ends up costing $30k to $50k per year.
When I see big accidents involving trucks on the "Accidents in India" thread, I cant help but wonder who pays for the damages.

[Mr.Boss]

Most of the points were already touched by Arun, let me add few more variables.

Commercial segment is something which couldn't be taken into 2 or 3 baskets like passenger cars. Every single application has got it's own expense and business model. Few examples,
- tankers always run one way with load and return journey is always empty
- Highway and long haul trucks go with rated load but mining trucks are mostly over loaded. So the wear & tear is obviously different
- Manpower and other expenditures depends on how big the fleet is. Bigger fleets operate with their own service centres and even I know a few cases where some of the regular failure parts (including bigger casting parts) were locally manufactured by them
- Toll charges vary for 2 axle and multi axle vehicle

List goes big enough.

Originally Posted by GutsyGibbon

Does this cover liability insurance? Who pays for that? The driver or the truck owner.

Owner, obviously

[sagarpadaki]

Originally Posted by TheARUN

The business model they follow there is the Owner rents the truck out to the Driver. The Driver gets paid 17 paise per kilometre and the truck is out running loads for 15+ days at a time. After 15+ days the truck comes back, the Driver hands over the earnings to the Owner minus his 17 paise per kilometre. There are many in-between calculations, eg. Pooja charges are deductible at 100Rs. per day. Loading and un-loading charges have to be paid by the Driver from his 17 paise. FastTag charges are borne by the owner. The Driver keeps and account of all expenses, fuel, commission paid to get load etc.

17 paise per km is too less for the driver . It's not even peanuts. So a truck driver on road for 15 days covering average 300km in a day will earn 15x300x0.17 =765 Rupees. That amount won't even be sufficient to pay for his food during his 15 days on the road.

Did you mean 1.7 rupees/km? That translates to 7650 rupees which is kind of plausible but still very less

[GutsyGibbon]

Originally Posted by Mr.Boss

Owner, obviously

The insurance has no factor such as the driver's age, driving history, and driving record? That removes the incentive to look at drivers with good driving history, the owner would hire the cheapest available driver for his beat up truck. A guy causing horrendous accidents can keep getting back on the road. That cant be true, is it?

[sunilch]

Originally Posted by sagarpadaki

17 paise per km is too less for the driver . It's not even peanuts. So a truck driver on road for 15 days covering average 300km in a day will earn 15x300x0.17 =765 Rupees. That amount won't even be sufficient to pay for his food during his 15 days on the road.

Did you mean 1.7 rupees/km? That translates to 7650 rupees which is kind of plausible but still very less

Originally Posted by TheARUN

The business model they follow there is the Owner rents the truck out to the Driver. The Driver gets paid 17 paise per kilometre and the truck is out running loads for 15+ days at a time. After 15+ days the truck comes back, the Driver hands over the earnings to the Owner minus his 17 paise per kilometre. There are many in-between calculations, eg. Pooja charges are deductible at 100Rs. per day. Loading and un-loading charges have to be paid by the Driver from his 17 paise. FastTag charges are borne by the owner. The Driver keeps and account of all expenses, fuel, commission paid to get load etc.

There is some wrong figure in your data for sure.

With an average speed of 40 KMPH, the driver can at max cover 480 Kms in one day while driving for 12 hour (I know they do so at times), per day works out as rs 81.6.

Rs 1.7 / Km looks a better figure to be honest.

Even an auto rickshaw driver in a large city such as Mumbai pays rs 500-800 or so as rent per day and makes more than this for sure so as to eat and maintain family.


However, there is a catch - the driver may not be handing all the earnings back to the owner. This is where extra loads (and overloading) come into picture. All the earnings here are with the driver and his helper. I know this because I have seen this myself. This is very common among drivers. This is not possible with tankers and hence you will see tanker drivers mostly on salary.

[anandhsub]

Originally Posted by TheARUN

the thumb rule for a truck is Rs.50 per kilometre.

The Driver gets paid 17 paise per kilometre and the truck is out running loads for 15+ days at a time.

Is it 17 Rs per km? Surely driving has to be a significant chunk of the cost per km especially given some costs are paid by the driver himself.

I remember reading somewhere that the owner also gives a lumpsum amount for the fuel charges and not based on whats actually consumed and that's one of the reasons truckers try to drive at optimum speeds and maximize the fuel efficiency so that they also get whatever they have saved on fuel as a bonus.

[praruaaa4]

Originally Posted by TheARUN

The business model they follow there is the Owner rents the truck out to the Driver. The Driver gets paid 17 paise per kilometre and the truck is out running loads for 15+ days at a time. After 15+ days the truck comes back, the Driver hands over the earnings to the Owner minus his 17 paise per kilometre.

Hi Arun, I'm from Sankagiri and own a transport fleet. One correction is the driver is not paid 17paise per kilometre. It's based on percentage basis of the freight charge. The average is 14% to 17% of the total freight collected. Let's say 1 Lakh is the freight amount charged for carrying material from point A to B then the driver earns 14k to 17k depending on the agreed % (all the expenses are paid by the vehicle owner and what the driver earns is taken home fully. There are other models were driver is paid fixed salary irrespective of the freight collected. As you move towards North the model changes where the driver is given a fixed amount per trip and driver has to take care of all the expenses including fuel and toll (this the business model in North).

Originally Posted by Mr.Boss

- Toll charges vary for 2 axle and multi axle vehicle

Toll charge on average for multi axle truck is around ₹5/km.

Originally Posted by anandhsub

I remember reading somewhere that the owner also gives a lumpsum amount for the fuel charges and not based on whats actually consumed and that's one of the reasons truckers try to drive at optimum speeds and maximize the fuel efficiency so that they also get whatever they have saved on fuel as a bonus.

Fixed fuel is given to segments where the source and destination remains the same. Example in cement segment where the route remains same the fuel quantity is fixed as the diesel theft by drivers is very high. So fuel in litres is fixed irrespective of the driver. Usually there is a margin of 10L plus or minus

[Mr.RaghavDhir]

Hi
A very interesting thread indeed. the cost per KM of a truck depends on multiple factors such as truck types

• The material they carry (volumetric [candies] or dense loads [auto parts])
• Age of the truck (maintenance and EMI costs vary accordingly)
• Size of the fleet of the fleet owner ( a larger fleet owned by an owner impacts maintenance costs by up to 15%)
• Truck Make ( Some trucks brands deliver a slightly higher mileage, wouldn’t want to name any brand to avoid controversy though this difference is of set to an extent in the capital cost)
• Geographical lanes in which the trucks operate (diesel prices very across the country so do tolls and traffic fines/penalties. This is a major factor as tolerance for overloading/Over dimensions vary across the country there by limiting the maximum loaded weight of a truck. Rajasthan-Gujrat border is the most stringent in the country for this )
• Type of market the truck services (if a truck services big brands they have very high compliance requirement from the truck such as tyre depth, specific truck floor requirements, truck body requirements eg. Glass manufacturers such as Saint Gobain require very strong truck sides which requires additional reinforcements and investment from the fleet owner)
• Type of customers a truck services (customers were waiting periods are high the monthly running is low hence a lower denominator and a higher cost)
• Seasonality (Diwali season in North, pre Diwali season for paint customer increases loading and unloading waiting periods as these are sales peaks, though these do not have a very high impact when averaged out over the year) to name a few.

Typically for a 32 feet multi axle truck within its EMI period costs are as follows. Of course these are very general calculations and will vary greatly with the above calculations.

[sid_deb]

The unit to consider for trucks is per ton per km, commonly known as PTPK. Given the tonnage varies considerably depending on the size of the truck.

PTPK can vary anywhere between INR 1.5 - 3.5 depending on the fuel prices, road conditions, etc.

[praruaaa4]

Originally Posted by sid_deb

The unit to consider for trucks is per ton per km, commonly known as PTPK. Given the tonnage varies considerably depending on the size of the truck.

PTPK can vary anywhere between INR 1.5 - 3.5 depending on the fuel prices, road conditions, etc.

PTKM is considered for Government tenders like LPG, Fuel, Milk, etc.

For general market trucks the rates are based on the market demand and varies everyday based on the truck availability at that point of time in that location. For consignments where the volume is big and weight is low PTPK is not possible. Similar case for high weight and low volume case also.

For commercial contracts the rates are quoted and paid on per ton to destination basis.

Originally Posted by Mr.RaghavDhir

Hi
A very interesting thread indeed. the cost per KM of a truck depends on multiple factors such as truck types
...

You are spot on breakup cost for container operations however from my experience the second highest cost after Fuel is Tyre expense.

[Mr.RaghavDhir]

Originally Posted by praruaaa4

You are spot on breakup cost for container operations however from my experience the second highest cost after Fuel is Tyre expense.

Correct. My calculation was for Steel belt radials in the front and Nylons/Retreads in the rear. For Radials all round this calculation changes.