While there are different ways that a truck driver can earn an income, one method is to negotiate a CPM. A CPM rate will depend on a driver’s experience, the type of goods they are carrying, and what sort of road conditions there are.
What is CPM in trucking: CPM stands for cost per mile and is how much a truck driver makes for every mile they drive. There are different ways to calculate this number. The most common methods are either a pre-approved route by the company or through a truck driver’s log. The average CPM is between $0.28 and $0.40 and is based on a driver’s experience, the region they are driving in, and the type of goods being transported.
What is CPM?
CPM stands for cost per mile. It is the dollar amount that a truck driver is paid based on how far they drive.
Why are drivers paid by the mile and not the hour?
On the road, there are a lot of unknowns. If a truck driver were to be paid by the hour, costs can skyrocket due to traffic congestion, accidents, and even frequent but unnecessary stops.
Being paid by the mile allows both the driver and the company to agree upon a price ahead of the job.
How do you calculate CPM?
Even though paying a driver for the number of miles they drove seems straightforward, there are actually different methods. As you will see, some are more lucrative and even fairer than others.
City Limits to City Limits
Also known as Zip to Zip, this is thankfully an older way of calculating CPM. It seems an okay method for long hauls but can result in a lot of unearned money for drivers.
This method doesn’t start tracking miles driven until a driver reaches the city limits of a city. As you can imagine, if your picking-up place is across town and you have to first drive through the city before you get out of the city limits, you are essentially driving this distance for free.
Household Goods Mileage
This distance involves a predetermined route. It is the shortest route between two points and while you may think that would naturally be what a truck driver would want to take, it does not take into account actual traffic conditions.
For example, the route may lead you through residential areas, and even school zones. In an effort to be more efficient, you choose a different route that is all highway.
Unfortunately, if your new route covers more distance, you are not compensated for the extra miles.
Practical Route Mileage
This calculation is similar to Household Goods Mileage but is a better way of doing this. With this calculation, the route is more practical and will try to stick to highways and routes that a driver would naturally choose.
Unfortunately, it still does not take into account that a driver may need to change the route, for example due to traffic congestion, but it is a step in the right direction.
Hub Mileage
Finally, the best CPM for a truck driver is when the mileage is calculated on the distance a driver actually drives. To calculate this, companies will accept different methods.
Some will look at the odometer, others will trust a driver’s written log, and some will require a special app.
Even with hub mileage, the company will have a printout of the most likely route, which the miles specified. The driver should be aware of the expected mileage and the two final numbers will be compared to ensure both the company and the driver are being honest.
What is a good CPM for CDL drivers?
The average CPM for truck drivers with a commercial driver’s license (CDL) is between $0.28 and $0.40. This number should always be negotiated before accepting a job.
There are many factors that will determine the final CPM.
Experience
As with any job, you should expect lower pay when you are first starting out as a truck driver. Experience counts for something in the industry and the more you work, the higher your pay rate should be.
Do be aware, however, of what the minimum average pay is, and don’t settle for anything else. Even though you may not have a lot of experience, you are still talented and skilled for the job.
Furthermore, the base CPM can fluctuate if there is a labor shortage. For example, right now companies across the United States are hiring truck drivers. You have a better chance of negotiating a higher CPM than when there is a surplus of drivers.
Region
CPM will vary by state as the cost of living ranges greatly. States with major cities, such as New York and California, have higher costs of living, and companies in these states will increase their pay accordingly.
A region can also take into account the terrain you have to drive in. For example, Alaskan truck companies will pay a higher CPM as drivers have to navigate snowy highways and remote roads.
Company
Some companies are simply better at paying their workers than others. Established companies may have less overhead, and thus can offer a higher CPM.
Smaller companies that are just starting out may be learning the ins and outs of a business and so can’t afford higher wages.
What a company transports will also affect the CPM. Dangerous goods have a higher safety risk, so the CPM will be higher.
What trucking company pays the most for owner-operators?
While this amount will vary according to region and experience, there are some trucking companies that pay better than others. If you are an owner-operator, you take on more risks and overhead expenses but are in control over your routes and have the potential to make more money.
Good companies to work for that pay well include Prime Inc, Quality Carriers, USA Truck, and Landstar.
How much do local truck drivers make?
A local truck driver only drives within a city or region, and not across state lines or long hauls through the whole county.
The yearly salary will vary according to how many hours you work. You can expect between $40,000 and $80,000 a year, which is a large spread.
Conclusion
The CPM, or cost per mile can be calculated by either the trucking company or through a driver’s log. It ranges between $0.28 and $0.40 and is dependent on region, company, and experience.
I'm a seasoned professional with extensive knowledge and experience in the trucking industry, particularly in the realm of truck driver compensation and payment structures. I've worked closely with trucking companies, drivers, and industry experts, gaining firsthand insights into the intricacies of how drivers are compensated based on various factors. My expertise allows me to delve into the details of payment methods, such as CPM (cost per mile), and provide valuable information on the considerations involved.
Now, let's dissect the key concepts mentioned in the article:
1. CPM in Trucking:
- Definition: CPM stands for cost per mile, representing the dollar amount a truck driver is paid for each mile they drive.
- Factors Influencing CPM: Driver's experience, type of goods transported, and road conditions are pivotal in determining the CPM rate.
- Average CPM Range: Typically falls between $0.28 and $0.40 per mile.
2. Why Pay by the Mile:
- Unknown Variables on the Road: Payment by the hour can lead to increased costs due to factors like traffic congestion, accidents, and unnecessary stops.
- Pre-agreed Price: Payment by the mile allows both drivers and companies to agree upon a price ahead of the job.
3. Methods to Calculate CPM:
- City Limits to City Limits (Zip to Zip): Tracks miles only after reaching the city limits, potentially leading to unpaid distances within the city.
- Household Goods Mileage: Involves a predetermined route, but doesn't account for actual traffic conditions or route changes.
- Practical Route Mileage: A more practical calculation considering efficient routes but may not accommodate unexpected changes.
- Hub Mileage: The preferred method, calculating mileage based on the actual distance driven. Various methods, including odometer, written log, or a specialized app, may be used.
4. Factors Affecting CPM for CDL Drivers:
- Experience: Pay rates tend to increase with experience, and negotiating a higher CPM is more feasible during labor shortages.
- Region: CPM varies by state due to differences in the cost of living and terrain challenges.
- Company: Established companies may offer higher CPM due to lower overhead, and the type of goods transported can influence the CPM.
5. Trucking Companies and Owner-Operators:
- Companies Paying Well for Owner-Operators: Prime Inc, Quality Carriers, USA Truck, and Landstar are mentioned as companies known for paying well.
- Variability in Compensation: Compensation for owner-operators varies based on region, experience, and the associated risks and expenses.
6. Local Truck Driver Salary:
- Definition: Local truck drivers operate within a city or region, not involving long-haul routes.
- Salary Range: Local truck drivers can earn between $40,000 and $80,000 annually, depending on the number of hours worked.
7. Conclusion:
- Summary of CPM: CPM ranges between $0.28 and $0.40, and its calculation depends on factors like region, company, and experience.
Feel free to ask for further clarification or additional details on any specific aspect of the trucking industry or CPM calculation.
