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How to Price Courier Services: Per Mile, Per Stop and Route Rates

How to price courier and delivery services: cost per mile, base plus mileage, per-stop and route pricing, rush and wait fees, fuel surcharges, worked examples.

Courier pricing goes wrong in two ways. Some owners copy a competitor's rate card without knowing their own costs, and lose money on long trips. Others price like gig drivers, counting fuel but forgetting depreciation, insurance, empty miles and waiting time. The fix is simple: know your cost per mile and per hour, then build a rate card on top of it. This guide shows how, with worked examples. All figures are illustrations; local markets and costs vary.

Step 1: Calculate your cost per mile

CostExample: used full-size cargo van
Fuel ($3.50/gal at 16 mpg)$0.22 per mile
Maintenance and tyres$0.12 per mile
Depreciation or loan payment ($700/month, 3,500 miles)$0.20 per mile
Commercial auto and cargo insurance ($600/month, 3,500 miles)$0.17 per mile
Registration, phone, software (allocated)$0.05 per mile
Vehicle cost per mile$0.76

Step 2: Calculate your driver cost per hour

Include wages plus payroll taxes, workers' comp and benefits. If you drive yourself, still pay yourself a wage in your calculations.

Example: $20/hour wage + about 25 percent for payroll taxes, workers' comp and other costs = $25/hour.

Step 3: Add overhead and profit

Overhead includes general liability insurance, dispatch software, marketing, accounting and your admin time. Spread it over expected jobs or route days. Then set a target margin; 15 to 25 percent is a common goal for small courier companies.

Price = (vehicle cost per mile × total miles + driver cost per hour × total hours + overhead) ÷ (1 − target margin)

Total miles include deadhead miles (driving empty to a pickup or back from a drop). Total hours include loading, parking, waiting and paperwork.

Common pricing models

ModelHow it worksBest for
Base plus per mileBase fee includes the first few miles; each extra mile is chargedOn-demand point-to-point
Zone pricingFlat fee per zone or ZIP bandSimple quoting in a metro area
Per stopFixed fee per deliveryMulti-stop routes
Per route or per dayFixed fee for a dedicated route or vehicle-dayScheduled contracts
HourlyPer hour of van and driverVariable or standby work

An example rate card

ItemExample rate
Base fee, standard same day (first 10 miles)$30 to $45
Each additional mile$1.50 to $2.50
Priority (2 to 4 hours)+$15 to $25
Rush direct (60 to 90 minutes)+$30 to $50
Waiting time after 10 minutes$0.75 to $1.50 per minute
Additional stop on the same trip$10 to $20
Over 50 lb or oversized+$10 to $40
After hours, weekends, holidays+25 to 50 percent
Dedicated van and driver$45 to $85 per hour

These are illustrative ranges, not market standards. Check local competitors and adjust to your costs.

  • 14 miles loaded, plus 10 deadhead miles back to the next pickup area: 24 miles.
  • 75 minutes total including courthouse parking and filing.
  • Overhead allocation: $6 per job. Target margin: 20 percent.
LineAmount
Vehicle: 24 × $0.76$18.24
Driver: 1.25 × $25$31.25
Overhead$6.00
Cost$55.49
Price at 20% margin ($55.49 ÷ 0.80)$69.36

On the rate card: $40 base + 4 extra miles × $2.00 + $20 priority = $68. The card and the cost calculation agree. If a client wants this run for $35, you would lose money on every trip.

Worked example 2: scheduled pharmacy route

  • 22 stops, 85 miles, 7 hours a day, Monday to Friday.
  • Overhead: $25 per route day. Target margin: 20 percent.
LineDaily amount
Vehicle: 85 × $0.76$64.60
Driver: 7 × $25$175.00
Overhead$25.00
Cost$264.60
Price at 20% margin$330.75 per day
Per stop (÷ 22)about $15.03
Monthly (about 21.7 days)about $7,180

Dense routes with stops close together can be priced lower per stop; rural routes with long gaps need more.

Fuel surcharges

Fuel is volatile, so many couriers add a surcharge tied to a public index. Write the formula into your service agreement:

Example: for every $0.10 the U.S. Energy Information Administration's weekly average retail gasoline price for your region exceeds $3.50 per gallon, add 1 percent to the delivery charge, recalculated weekly.

Clients accept surcharges more readily when they are formula-based and transparent.

Zone pricing example

Zone pricing makes quoting fast for clients and dispatchers. Draw zones around your base or a central point and price each from the cost formula.

ZoneDistance from baseStandard same dayPriority (2 to 4 hours)Rush direct
Zone 10 to 8 miles$32$48$70
Zone 28 to 15 miles$42$60$85
Zone 315 to 25 miles$58$78$105
Zone 425 to 40 miles$80$100$135

Check each zone price against the cost of a typical trip into that zone, including the return to your next likely pickup. Outer zones often need higher prices than distance alone suggests because return trips are more often empty.

Volume and contract discounts

Recurring clients deserve better rates than one-off callers because they fill your schedule and cost less to sell. Offer discounts tied to commitments, such as a minimum number of runs a week or a fixed daily route, rather than general percentage cuts. Put the commitment and the discount in the service agreement so the rate can be reviewed if volume falls.

Accessorial charges to define

  • Waiting time beyond a free period.
  • Failed delivery attempts and return-to-sender trips.
  • Inside delivery, stairs or liftgate use.
  • Two-person deliveries.
  • Signature, ID check or special handling (temperature control, chain of custody).
  • Tolls and paid parking.
  • Same-day order cut-off times.

Pricing checklist

  • Cost per mile calculated from real vehicle costs
  • Driver cost per hour including payroll costs
  • Overhead allocated per job or route day
  • Target margin chosen
  • Rate card with service levels and accessorials
  • Route prices built from full daily cost
  • Fuel surcharge formula in contracts
  • Prices reviewed every quarter

Tip: Review your job history every quarter and sort clients by profit per hour, not revenue. The busiest client is not always the most profitable one.

Common pricing mistakes

  1. Ignoring deadhead miles.
  2. Not charging for waiting time.
  3. Underpricing routes to win the first contract, then being stuck with the rate.
  4. Forgetting insurance and depreciation.
  5. Never raising rates as costs rise.

Your next step

Gather three months of vehicle costs, calculate your cost per mile, decide your driver cost per hour, and price your three most common job types with the formula above. Compare the results with your current rates.

The full guide, Starting a Courier & Last-Mile Delivery Business, covers niches, vehicles, FMCSA and state rules, insurance, drivers, dispatch software, B2B sales and service agreements, an Amazon DSP overview and a 30/60/90-day plan, for $0.99.

General information only, not legal, tax or financial advice. Rules and costs vary by state and change; verify with official sources. Read the disclaimer.

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