Add a per-mile profit objective above operating cost
Target rate per mile estimates the gross RPM required to cover an entered operating CPM, preserve a desired profit amount per mile and absorb percentage-based revenue fees. It answers “what rate supports this target?” rather than “what is the market paying?”
The desired profit-per-mile input is a business planning target. It should not be confused with owner draw, tax reserves or a guaranteed margin unless those items have been deliberately incorporated into the assumptions.
When this calculation is useful
- Turning a known operating CPM into a negotiation target.
- Testing whether a desired profit-per-mile goal is realistic under current fee arrangements.
- Comparing a target with a separate break-even floor.
Protect cost and profit after fees
- Operating CPM
- Operating cost per mile before the percentage fees entered in this form.
- Desired profit per mile
- Desired business profit for each modeled mile, entered as a dollar-per-mile amount.
- Revenue fees %
- Combined dispatch, factoring or similar charges that apply to gross revenue.
Formula
(Operating CPM + desired profit per mile) ÷ (1 − revenue fee percentage ÷ 100)
Cost and desired per-mile profit are added first. That required retained amount is then divided by the share of revenue remaining after the entered fees.
This differs from simply adding profit to the gross break-even result. Percentage fees rise with the gross rate, so the target must solve for them at the same time.
Example: targeting $0.38 profit per mile
Use $1.62 operating CPM, a $0.38 profit target and 7% combined revenue fees.
- $1.62 + $0.38 = $2.00 that must remain per mile.
- The retained revenue share is 0.93.
- $2.00 ÷ 0.93 = $2.1505.
Result: Estimated target gross RPM is about $2.15.
Decision use: Compare this target with true RPM across all required miles, not only the rate displayed for loaded miles.
Use a floor and a target in negotiation
A freight offer between break-even and target may still cover modeled cost but miss the selected profit goal. That difference gives a concrete basis for a counteroffer instead of an arbitrary increase.
A target is not automatically attainable on every lane or schedule. It is an internal decision threshold based on the business model entered.
Common mistakes
- Using loaded RPM while the target CPM reflects all miles.
- Treating desired profit per mile as the same thing as profit margin percentage.
- Leaving percentage fees inside cost CPM and entering them again.
Limits and assumptions
- Time, utilization, tolls and load-specific direct expenses are not modeled.
- The calculation does not predict broker acceptance or current freight availability.
Review the broader calculation and sourcing principles on the Torz Freight methodology page.
Related calculators and guides
Torz Freight connects My Truck assumptions to Load Desk, Load Compare, negotiation, Trip Desk actuals and Money Desk. A quick calculation is most useful when its assumptions are checked against completed work.