Same day and next day couriers price their jobs usually based on a set price per mile.  At present in the UK, this price is around £1 to £1.50 per mile, depending on the company that you use, and the load in question.

Many customers look at this and think that this is an extortionate rate, particularly when you  consider that many customers are comparing the courier price with the price of a next day parcel service.

So what makes up this price, apart from the obvious fuel etc, what other costs do couriers need to consider when setting their prices.

1. Fuel.  We'll start with the obvious one.  This works out at around 102p per litre, for diesel vehicles with engine capacities over 2000cc.  If you have a well maintained van, the 30 mpg should be achievable.   Making the cost per mile around 15-16p per mile.
2. Depreciation.  Say a new van costs around £25,000, and in 3 years it has a resale value of around £10,000 then that's £15,000 of depreciation that needs to be included in the costings.
3. Financing Charges.  Very few van drivers or couriers can afford to pay for a new van in cash, and so that means that there is either bank interest, loan interest, or HP/Finance costs to be borne.  These will average around £4,500 depending obviously on the deals and rates around at the time.  Currently, these are very thin on the ground.
4. Tyres, Parts, Servicing.  If you've got a brand new van, then you should be lucky and get away with around £600 a year on servicing and tyres.  If the vehicle is older then these costs are going to be increased.
5. Insurance.  Van insurance is not cheap.  Van drivers often pay higher premiums due to the "higher risk" they are exposed to by the number of miles that they drive every year.  The average car driver drives 12,000 miles per year, a normal courier will be looking at least quadruple that, maybe even upwards of 90,000 miles per year.  Couriers van insurance also carrier premiums for goods in transit insurance, to ensure that the products that they carry for their customers are properly insured against loss or damage.
6. RFT & Breakdown insurances.  A necessary, unavoidable expense for all road users.  And if you earn your living by driving, you need to ensure that you have cover to keep your vehicle on the road.

If you add up all of these expenses, and work out a cost per mile, it comes in around 83p.  But there are two very important costs that aren't included in the list.  The time of the driver, ie his wages, and the margin that the company/business requires to contribute towards the businesses fixed costs and overheads (for example telephone, office staff, premises, bank charges etc).