Cost per Kilometre
In Arabicالتكلفة لكل كيلومتر
A vehicle's or fleet's costs for a period divided by the kilometres covered in it; the usual yardstick for comparing vehicles and pricing contracts.
What is cost per kilometre in fleet management?
Cost per kilometre takes what you spent on a vehicle over a period and divides it by the distance it covered. Fleets usually track two versions: variable cost per km, covering the operating costs that rise with distance, such as fuel, maintenance and tyres, and total cost per km, which adds fixed items such as depreciation or lease, insurance, registration and driver salaries.
Its value is that it removes the effect of distance: two vehicles with the same monthly bill look very different once one turns out to drive twice as far.
How it works
- 1Total the period's costs per vehicle
- 2Take measured distance from tracking
- 3Divide cost by kilometres driven
Why does cost per kilometre matter in fleet management?
Transport contracts and tenders are priced on cost per kilometre. Underestimate it and you lose money on every trip; overestimate it and you lose the contract. It is also the clearest sign that an old vehicle now costs more to run than to replace, or that handing a route to a subcontractor would be cheaper.
What you gain
- Grounds contract and tender pricing
- Compares vehicles on equal terms
- Signals when to replace
How does Safee help you calculate cost per kilometre?
The hardest input is an accurate distance for every vehicle, and Safee measures that automatically. Its Operation Cost report shows running cost and fuel cost against distance per vehicle, so all that remains is to add fixed costs from your finance records to reach the total.
A field example
A school transport operator in Medina preparing a tender for 70 buses needed a realistic price. Combining a year of tracked distance and fuel data with its maintenance and insurance records, it found an average of 2.10 riyals per km, but 12 older buses ran at 3.40. The bid was priced on the newer buses and the 12 older ones went into the replacement plan. The contract was won at a margin the finance team could defend.
Frequently asked questions
How is cost per kilometre calculated for a vehicle?
Add up its costs for a period, including fuel, maintenance, tyres, insurance, salaries and depreciation, then divide by the kilometres it drove in the same period.
What is the difference between variable and total cost per km?
Variable cost covers items that rise with distance, such as fuel, maintenance and tyres. Total cost adds fixed items such as depreciation, insurance and salaries.
How is cost per kilometre different from total cost of ownership?
TCO is a lifetime sum of everything a vehicle costs, from purchase to resale. Cost per kilometre is a rate that divides costs by distance for whatever period you choose.
Want to put this to work in your fleet?
Talk to a Safee fleet expert about your vehicles and how you operate, and we will suggest what fits.
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