How do I calculate cost per drop for a delivery operation?
Cost per drop is the total cost of running a route or fleet in a period divided by the number of drops delivered. Total cost includes fuel, driver wages, vehicle finance or depreciation, maintenance, tyres, tolls, insurance and a share of overhead.
Example: a route costing 12,000 currency units in a week with 400 drops gives 30 per drop.
It matters because pricing, route design and customer profitability depend on it.
Commonly misread:
- Counting only fuel and driver cost, so the figure looks lower than it is.
- Treating all drops as equal; a drop of one parcel and a drop of ten pallets have different costs.
- Ignoring failed deliveries and returns trips, which add cost without a completed drop.
Track it by route, vehicle and customer, and consider weight or volume as a second measure.
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