The Day Rate Trap: What Your Truck Really Costs Per Hour

A truck can be busy five days a week and still struggle to turn a profit.

The problem isn't always the day rate. It's how much of the truck's available time is spent generating revenue, and how much is lost to unpaid waiting, empty running and downtime.

Two trucks charging the same daily rate can deliver very different financial results. One might complete its jobs efficiently, recover waiting charges and secure a paying backload. The other might spend hours at a loading dock and return to the depot empty.

Both are working. But they're not necessarily earning the same money.

For Australian fleet operators, understanding what each truck costs per revenue-generating hour can reveal problems that daily rates and cost-per-kilometre figures don't always make obvious.

At a Glance

• 55 available hours, 34 revenue hours: A truck may be available for 55 hours in a week but spend only 34 on revenue-generating work.
• $191 per revenue hour: In our illustrative example, a truck costing $6,500 a week needs to recover approximately $191 for every revenue-generating hour.
• $118 versus $191 per hour: Dividing costs by all available hours can make the hourly figure look considerably lower.
• $1,100 difference: Two trucks charging the same $1,400 day rate can finish the week with very different revenue.

Beyond the Day Rate

A $1,400 day rate might look reasonable on paper.

But that figure doesn't tell you how much time the truck spends earning, waiting, travelling empty or sitting unused.

Some costs continue regardless of whether the vehicle is completing paid work. Finance repayments, insurance, registration and depot overheads don't disappear because a truck is delayed at a customer's site.

Other costs, including fuel, tyres and servicing, depend more heavily on how the vehicle is used.

This is why two trucks operating at the same day rate can deliver different margins.

Cost-per-kilometre and daily costing remain important. They help operators price work, manage expenses and understand operating costs.

But they don't tell the whole story.

A truck can cover plenty of kilometres and still underperform financially if too much of its working week is tied up in activities that aren't generating additional revenue.

The missing piece is time.

What a Truck Really Costs Per Revenue Hour

To understand the cost of a truck's revenue-generating time, start with two figures:

1. The truck's total weekly operating costs.
2. The hours allocated to revenue-generating work during that week.

Divide the first by the second.

For this calculation, revenue hours are the hours spent completing work covered by paying jobs. Depending on the operator's pricing arrangements, these may include:

• Loaded travel on a paid job.
• Loading and unloading included in a paid service.
• Return journeys covered by the agreed job price.
• Waiting or standing time that can be charged to the customer.

An important distinction: revenue-generating time isn't always separately billable time.

A customer might pay a fixed price for a delivery that includes loading, travel and unloading. Those activities contribute to the paid job, even if they're not invoiced individually.

The aim is to use a consistent method to understand how much vehicle time is committed to earning revenue.

One Semi-Trailer, One Week

Consider a semi-trailer operating general freight routes across Sydney and regional NSW.

The following is an illustrative weekly operating-cost example, rather than an industry benchmark.

The fuel calculation uses the Australian average for articulated trucks, 53.1 litres per 100 km (ABS Survey of Motor Vehicle Use) and an assumed net diesel cost of $2 per litre after applicable fuel tax credits. Actual fuel costs, tax credit entitlements and operating expenses vary.

Now consider how the truck's hours are used.

The truck is available for 55 hours during the week, but only 34 hours are allocated to revenue-generating work.

Cost per available hour: $6,500 ÷ 55 = $118.18

Cost per revenue hour: $6,500 ÷ 34 = $191.18

That's approximately $73 more per hour when costs are allocated only to the time spent generating revenue.

The truck hasn't suddenly become more expensive to operate. The weekly cost is the same.

What changes is how many hours are available to recover that cost.

The $191 figure is a cost-allocation measure, not necessarily the hourly rate the operator should quote. Pricing still needs to account for job structure, expected demand, additional costs and the profit margin required.

But the comparison makes one thing clear: when fewer hours contribute to revenue, each of those hours carries a greater share of the truck's operating costs.

Where Your Earning Hours Go

Not every hour outside a paid delivery is wasted. Trucks need servicing, drivers need breaks and some repositioning is unavoidable.

The issue is identifying where time and capacity are being consumed without a corresponding commercial return.

1. Unbilled Waiting Time

A truck arrives at a customer's site on schedule.

The driver waits two hours before loading begins.

If that waiting time is covered by a chargeable standing-time arrangement, the operator may recover the cost.

If it isn't, the truck and driver are occupied without generating additional revenue.

That delay can also affect the next job, creating a knock-on effect across the day's schedule.

Tracking waiting time helps operators identify customers and locations where delays regularly occur, providing evidence for discussions about scheduling, loading arrangements and standing-time charges.

2. Empty Running

An empty truck still consumes fuel, driver time and vehicle capacity.

But not every empty journey represents lost revenue.

If the cost of returning empty has already been included in the outbound job price, that journey forms part of the paid work.

The bigger concern is unnecessary or poorly priced empty running that reduces the opportunity to take on additional paying work.

Where suitable freight is available, securing a backload can help recover more revenue from the same vehicle and journey.

Saphyroo's Route360 supports route planning and optimisation, helping operators review vehicle movements and identify opportunities to use available capacity more efficiently.

3. Underused Vehicle Capacity

A truck might be scheduled for a full day but spend several hours parked between jobs.

Another vehicle might be regularly overloaded with work while one nearby has spare capacity.

Without a clear view of utilisation, these patterns can go unnoticed.

The answer isn't always to put more trucks on the road.

Sometimes it's about distributing existing work more effectively, reviewing schedules or identifying vehicles that aren't being used enough to justify their costs.

4. Work That Doesn't Cover Its Costs

Not every job that generates revenue generates profit.

A route might look attractive based on its quoted rate, but regular delays, long repositioning journeys and additional operating expenses can reduce the margin.

Operators need to look beyond the invoice value and understand the resources required to complete the work.

That may mean reviewing pricing, changing the schedule or reconsidering work that consistently fails to cover its costs.

Two Trucks. Same Day Rate. Different Results.

Let's compare two trucks operating under the same $1,400 day rate.

Both have an illustrative weekly operating cost of $6,500, but their jobs and time utilisation produce different results.

*Illustrative comparison. The additional $400 earned by Truck A comes from recoverable waiting charges and a paying backload. Truck B's revenue reflects four and a half paid days, with unpaid waiting and empty running reducing its earning opportunities. Both trucks are assumed to incur the same weekly costs for comparison.*

Truck A completes five paid days and earns another $400 through additional chargeable work.

Truck B loses part of its earning capacity to unpaid waiting and empty running, leaving it with only four and a half paid days.

The difference is significant.

Truck A finishes the week $900 ahead of its allocated operating costs.

Truck B finishes $200 behind.

That's an $1,100 difference in weekly operating results, despite both trucks having the same standard day rate.

The figures are simplified, and actual profit calculations must account for all relevant costs. But the principle matters: the rate you charge is only part of the profitability equation.

How efficiently you use the truck's available time matters too.

Turning Vehicle Data into Better Margins

Knowing what a truck costs per revenue hour is useful.

Understanding where those hours are going is what helps operators act on it.

Telematics data, including engine hours, idle time and vehicle movement, gives operators a clearer picture of how each truck spends its working day.

Saphyroo's Drive360 brings vehicle information together with fleet operations, helping operators review utilisation, identify unnecessary downtime and understand how assets are being used.

But movement data alone doesn't tell you whether a truck is earning money.

A vehicle travelling on the highway could be completing a paid delivery, returning empty or repositioning for its next job.

That's why vehicle activity needs to be considered alongside job records, dispatch information and revenue data.

Together, this information can help operators answer more useful questions:

• Which trucks regularly spend hours waiting at customer sites?
• Where are empty return journeys affecting margins?
• Are some vehicles consistently underused?
• Which jobs consume more time than their rates justify?
• Could existing fleet capacity handle more work before another vehicle is needed?

These are the questions that turn fleet data into practical operational decisions.

Better Utilisation Starts With Better Visibility

Improving fleet profitability doesn't always mean increasing rates or adding more vehicles.

Sometimes the opportunity is already sitting in the working week.

Recovering chargeable waiting time, reducing unnecessary empty running, reviewing underperforming routes and making better use of available vehicles can all help improve the return from existing assets.

The key is measuring utilisation consistently, rather than relying on how busy a truck appears to be.

A truck that's moving isn't necessarily earning.

And a truck that's booked all week isn't necessarily profitable.

The day rate tells you what you're charging. Understanding the hours behind it tells you whether the work is paying off.

Find lost hours across your fleet. Book a Saphyroo demo.