[praruaaa4]

Originally Posted by Mr.RaghavDhir

Correct. My calculation was for Steel belt radials in the front and Nylons/Retreads in the rear. For Radials all round this calculation changes.

For container operations mostly volume is high and weight is low so the tyre life is good and can also be rethreaded upto two times. For other operations tyre rethread can be done only once and not advisable for few segments.

[anjan_c2007]

Quite educative to read through the posts. My friend operates an inter-city bus service. According to him, the bus company gets fares for all the booked seats and berths. Fares charged from any extra passenger/s (without overloading the bus and breaking the law) allowed mid route by the driver and conductor are permitted to be pocketed by the bus crew. There must be a similar mechanism for the truck driver/cleaner. However, the bus driver and conductor are almost on equal terms. But in case of trucks, the cleaner has always been subordinate to the driver since ages.

Other factors influencing the cost per km are the bribes to traffic rule enforcement officials that the drivers are to pay as a rule to keep the black money channels of state transport and traffic police alive.

The toll taxes too add up to the operating expenses.

To summarise, I would like to quote late Mr Girdharidas Chandak then partner of m/s G. G. and Company, Nagpur from the 1990's. They have an age old engine reconditioning workshop. Mr Chandak used to always say that he had till then very rarely seen a fleet owner come to him for engine work with a smile on his face. He had said that for myriad reasons, fleet operators appear to be a harried lot. I am not sure if this statement is true even now in 2022!

[camaroZL1]

Very interesting thread.

So I’ve been working with a large Indian logistics MNC since 4+ years, so I’m gonna give you a thumb rule of inter-city rates for 40 feet trailers (22MT minimum load guarantee).

₹6 per MT per km is the general rule. This is takes into consideration capex + ops + maintenance + owner’s profit. If you’re using a trailer, use this a thumb rule and you’ll be within 95% accuracy of the cost.

Of course, there are exceptions like air suspension trailers, specialised lashing equipment et al.

Hope this helps!

[praruaaa4]

When you look at bus operation thre are two types
•used to ferry passengers from one district to another (usually called route bus around ~150kms alternate to town bus)
•Omni bus operation (overnight sleeper / semi sleeper. Alternate for train travel)
For town bus / route bus, the operation is straight forward and there are ticket checkers in place to moniter the driver and conductor against unaccounted tickets. Here there is no hassle or issue to bribe local police as the operation is done locally. Here the route is fixed and loading to vehicle rated load is very low. So the bus gives better mileage and tyre life is excellent as the route remains constant and the driver knows the road by heart. This also a reason why tubeless tyres for heavy vehicles is famous among bus operators. I have heard operators who rethread the tyre upto 4 times.

Originally Posted by anjan_c2007

the bus company gets fares for all the booked seats and berths. Fares charged from any extra passenger/s (without overloading the bus and breaking the law) allowed mid route by the driver and conductor are permitted to be pocketed by the bus crew.

When it comes to Omni bus operation comfort and luxury is given precedence. As mentioned passengers who are pickup enroute are not bought into account. Usually the operators either ignore it or give margins due to shortage of drivers.

When coming to trucks the concept of cleaners has almost diminished due to heavy driver shortage.

With the recent advancement in engine technology and road improvements the engine life is quite good. Engine overhaul is done once every 7-8 lakh kilometres. With proper maintenance truck engine failure is very rare nowadays.

[Stribog]

Originally Posted by arpanjha

We petrolhead T-Bhpians have various informed data for running costs for our cars, motorbikes and now even EVs. But does anyone have a fair idea for running costs for a commercial vehicle (mainly a commodity transporting Truck).

Interesting question and am happy to assist. But before we begin let's get a few things out of the way.

Rates vary substantially for FTL and LTL as does the cost structure. Again when you say commodities, rates are cheaper than for say Container trailers and are very high for project transport (think the ODC, super ODC cargo).

I will provide an overview of a typical 20', dry container transport traffic.

For some perspective, I work in the logistics sector, and have worked with a large road transport company in a strategic capacity so saw all pricing and rates upclose.

The Cost Structure - if your spend is Rs 100, the costs are broken up as follows.

1) fuel - 40%
2) tolls - 14%
3) Vehicle EMI - 17%
4) wages - 11%
5) Tire wear & tear - 6-8% (better quality tyres = higher upfront cost but better longevity. Sad tyres at start = lower upfront but greater replacement costs)
6) Maintainence - 5%
7) others form the rest - bribes (used to be as high as 10% pre GST and checkpoint era), Insurance, Fitness Cert, police / accidents etc.




Now this varies within the industry as for a 2 truck fleet operator, operating in the Broker market, wages and maintainence will be lower (overheads) but fuel and dep will be higher. Lots of permutations & combinations here. But let's leave that aside.


Before we break it down per KM, let's look at an interesting split. The actual break up of landed costs (of goods imported). Here we will only cover logistics costs and exclude duties as they will skew our numbers.

Terms here are Port to Container Yard (I will include sea freight here). In this example let's take 1*20' dry container from Shanghai to Chennai and thence onto a CY inland say 150 kms from Port.

Freight - $2,400 (don't quote me on this, this is extremely volatile and 2x pre covid pricing)

Port Charges - $500-700

Transport charges - $350

Customs Clearance charges - $100

So in the total basket, transport charges as you can see are fairly low but that's because sea freight has shot up making other charges seem low.

Here though if the importer can provide export cargo (2 way traffic) you can drop the transport rates to around $275.


The average driver salary in corporate trucking firms averages from 1.5l / annum to 3.5l / annum.

Mind you project cargo drivers make big bucks. So if you are experienced in handling 150+ tonne loads your sal can even go up to 8-10l / annum and it is a skill high in demand. Wind blade transport drivers make 4-5l / annum etc.

Finally, I already covered it but the average per km costs? One way (so more expensive) rates average around Rs 150-200 / Km for a 20' dry. All in freight rate.

Disclaimer - these are all subject to change as rates are very volatile and depends on so many factors.

1) tonnage - so a container weighing 8 tonnes is cheaper to transport than a heavy duty 20' at 25 tonnes.

2) one way or two way trips

3) prevalent fuel rates

4) nature of fuel - like my company converted to bio diesel so we averaged much lower per km fuel costs

5) Nature of market - so there are two types of markets these days. Broker market vs organised.

Broker market is what dominates 75% of all bookings (though this has drastically reduced from the near 90% dominance just a few years ago). Here small fleet owners (1-10 trucks) group together in a place, they have brokers who act as middlemen and aggregate orders and then fan them out.

This is the cheapest you can get but no guarantees of anything (though in general they are professional and reliable). They cut costs using legal but definitely not possible in a corporate methods. Which is why big name companies use reverse auctions and tenders to operate only with organised players (VRL, TCI etc).

Happy to take follow up questions.

Edit

Originally Posted by GutsyGibbon

Does this cover liability insurance? Who pays for that? The driver or the truck owner. In the US it is recommended that they buy coverage for $1M to $5M, as the damage that they can cause is huge. Ends up costing $30k to $50k per year.
When I see big accidents involving trucks on the "Accidents in India" thread, I cant help but wonder who pays for the damages.

Depends. Per motor vehicle act liability insurance is mandatory for the transporter and commodity insurance is on the shipper or consignee (depending on the incoterms).

Broker market trucks definitely take liability insurance but enforcement is poor. If you are a 2 truck operator, and short on cash, you can simply skip or skimp on insurance.

Corporatised carriers 100% take liability insurance. If needed they protect the cargo also but by law only one party can take this so mostly the shippers / consignees cover this.

The large firms take an annual policy that provides blanket cover for all their freight operations.

[milam]

This thread gave me a smile as I reminiscence my years in a logistics startup.

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1. Come to a generalized idea at how much or by what margin % does transportation cost add up to the product's final cost. (Including the taxation portion)
-----------

FMCG – there is Primary movement – Manufacturing plant to Warehouse which is long haul and mostly inter city & Secondary movement – Warehouse depot to Stores which is intra city. For a company like HUL the primary freight spend will be ~1% of rev and secondary will be ~ 1% max. For a company with lower value of product (say Coca Cola) the % will be slightly higher but not too much (there manufacturing foot print is close to consumption centres).


E-commerce – you have – Long haul which is generally express movement (speed is essential here), mid mile & last mile – they cost to deliver a packet will be ~ INR 50-60 & while the cost of the product or selling price will be anything from ~500 to 1000 (avg for a com player).

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2. How varied are running costs of commercial vehicles w.r.t. commodity, for example, how much does carrying vegetables cost vis-à-vis carrying steel or similar trends.
-----------

From on cost perspective 40% is fuel cost, rest is predominantly going into emi’s, consumables and earnings of driver & owner

Cost or Price of moving goods (per ton) is be a function of
1) Quantum of movement – full load vs part truck load, within full truck load bulk movements 27 mts + will be lower from a per metric ton basis

2) Density of cargo – Pricing will be a either tonnage or volume basis

3) Specialized vs commodity movement – In Specialized movement vehicles will be specially made and costing will be more around longer term contracts/ volume guarantees linked to a cost model, case in point milk movement. For more common truck types – 16 mt, 27 mt open body trucks/ trailers the pricing is more market dependent

3) Lane economics – Say a movement from Kandla (a major port) to Karnal will be 2.5 X the cost from Karnal to Kandla. This is purely to do with the supply and demand imbalance between source and destination. Running empty miles or waiting for demand in a way adds to cost

4) Overloading – Certain commodities, B2B customers and lanes/ states are more open for overloading linked cost efficiencies

5) Competition and sensitivity of products being moved – Large B2B players (transport spends > 500 Cr annually) are able to attract signification interest & drive competition and squeeze margins. Higher value products or time sensitive movements (electronics, auto ancillary etc) will have a more excusive play that gets factored in the price
--------------

4. Does cost per km vary w.r.t. inter city haulage, and long range haulage?
--------------

I will read this question as intra city vs inter city.

Quick answer yes, because:

Intracity - Pricing generally factors empty return (like in the case you book for a inter city cab and go one way but pay for return in most cases). For short trips within the city the minivan guy may just want to run back empty and do more trips rather than searching for loads at the “to location”

Inter city (~>150 Kms) - Cost depends more on the supply & demand on both the nodes. Hence the cost will be a little lower, also since stuff in longer lanes goes in larger trucks will be cheaper on a per ton basis.

[skrao]

I can provide a bit of perspective here. When you say trucks, i am assuming haulage trucks and not the specialty use ones like tippers and dumpers.
I design mobile medical units and have about 19 of them run a collective 5 million plus KMs since 2005
While conventional wisdom was to convert prebuilt buses into mobile units, our unique requirements needed us to take on a Cabin plus chassis or a bare chassis and build these vehicles. The cost actually depends on the vehicle class by tonnage, as all the variables are based on load bearing capacity and engine size.

i would break down the costs as under

1. Fuel
2, Personnel
3. Consumables ( oils, filters, tyres etc)
4. Servicing and Maintenance
5. Recommended and emergency spare parts replacements
7. Taxes and fees ( these include insurance, interstate, national and other permits, fitness)
8. Tolls
9. Depreciation and replacement cost

We were lucky to have worked with some international orgs that had wide experience in costing these at a per kilometer basis and having run these vehicles in the private sector sine 2004, and in the govt sector since 2011. here are the rough break downs

Fuel -52%, Personnel - 12%, Consumables - 8%, Servicing 3% Spares 5% Taxes and fees 6% tolls 3% Depreciation 11%

< 10 tons - Cost as of Dec 21 is Rs 29
10-15 tons- Rs 38
!5- 40 tons- Rs 83

most unorganised truckers work on a cash basis and do not account for planned/unplanned and replacement costs. Most of their costs are carried forward either as formal loans or other informal borrowings.
Large publicly traded companies like TCI/Mahindra do have this information as does organisations like FCI/Indian Oil etc

[Theyota]

Below is the cost structure of Indian trucking industry as per a Mckinsey & Co study in 2019. The screenshot is taken directly from their report, so all credits to them!

[Rahul Rao]

Originally Posted by arpanjha

We petrolhead T-Bhpians have various informed data for running costs for our cars, motorbikes and now even EVs. But does anyone have a fair idea for running costs for a commercial vehicle (mainly a commodity transporting Truck).

I am related to truck and bus operation business, as I manufacture truck refrigeration units and bus air-conditioners.

There are lot of things that can lead to variation in truck operation cost,
A truck or bus entering congested cities like Mumbai may need a clutch replacement within a lakh km, where as a truck on moderate traffic route where 40 to 55 kph can be maintained and faces no ghats and congested cities can be on original clutch till 4 lakh or more km.
Fuel efficiency story is similar. A 28 ton GVW 10 tire truck can give 4.5-5 kmpl on good sections. Altitude plays a lot too. A customer whose 42 ton truck ran Pune to Nagpur and back needed just 200 Lit Pune to Nagpur, but about 240 Lit on return trip both sides had just under capacity load, but Pune is at an higher altitude than Nagpur.
Synthetic oils needed by modern trucks is very costly, often same grade recommended by our big 3 Germans, but it lasts far longer as engines are slow, and oil coolers are better managed. Most trucks have 6 months or 80,000 km oil change, so cost of oil per km is even lower than in our cars.
Engines also last much longer, and service costs less. Warranties are often 5 Lakh km or more, and life between overhauls is usually 8-10 lakh km, though carefull drivers have managed 17 to 20 lakh km too.
Ashok Leyland which provides more sub parts and field replacable sleeves costs less than a lakh for an overhaul without main bearings, where as Tata, Eicher Mahindra and Volvo are close to double that.
Tires at Rs 17500 are costly, and have varied lives, steered axle pairs last barely 60-80 k km, driven axle ones just about a lakh, while those on dead axle in a tandem pare can go on and on till 1.3-1.5 lakh km.
Local truckers who use re moulds buy casings from long route truckers for about Rs 5000 each.
There are lot of variations depending on many factors in truck operations.

Rahul

[arpanjha]

Dear T-Bhpians, the amount of information generated and gathered here is truly encouraging.
More or less from the information shared till now, we can broadly (not specifically) conclude to below points:
1. Cost per km in India for goods transportation which are mid to high dense in nature (steel to milk) intra city or within small cities can be considered in the range of Rs. 4 to Rs. 6 per Km?
2. 40% of this is broadly accepted to be fuel cost
3. Taxes make up about 50% of retail fuel price, hence we can consider 40% or (mean cost) Rs. 5/km i.e., Rs. 2/Km may be cost of fuel, and 50% of this works out around Rs. 1/Km are taxes on fuel alone. Hence generally there is a 20% tax burden on transportation cost of goods movement in our country.

Why I started gathering this information? It was from one broad comparison angle for taxation % on luxury cars (28%) vs actual taxation on goods like milk and food (which our economists place at 5% direct tax) whereas turns out we pay about 20% tax on transportation cost alone (only fuel, insurance and others extra).

[mvadg]

Originally Posted by Rahul Rao

I am related to truck and bus operation business, as I manufacture truck refrigeration units and bus air-conditioners.

There are lot of things that can lead to variation in truck operation cost,
A truck or bus entering congested cities like Mumbai may need a clutch replacement within a lakh km, where as a truck on moderate traffic route where 40 to 55 kph can be maintained and faces no ghats and congested cities can be on original clutch till 4 lakh or more km.
Fuel efficiency story is similar...

Rahul

Very interesting thread.
I wonder if large transport companies can use "tug-trucks" with electric motors to pull these long distance diesel trucks to their final destination in congested cities. Better still would be to lobby for roll-on, roll-off rail transport (highly unlikely that our babus would oblige) from the outskirts to the center of cities. This is where the trolleybus concept for "e-highways" being tested in Scandinavia / Germany would work well.

I wonder why warehouses (unloading point for long distance trucks) aren't situated at the outskirts of cities.

[reddify]

Hello,

Thank you once again for this thread. having done a fair bit of googling, this kind of information seems particularly difficult to come across, especially across Truck brands & sizes of vehicles.

Looking for an expert’s advice on this topic, and possibly we could connect further for a professional consultation.

I am looking to transport sand from one location to another. what would be the various cost models for the same, incl upfront + fuel + tyres + insurance etc.


scenarios for 10km, 60km & 100km
one way full load return empty load, on NH practically flat roads.

Looking at 55tonne trucks with 35 tonne of material as they may suit best?
what are the various characteristics of each brand and how do they compare in running costs/mileage/durability/upfront cost etc.? Pls DM brand names if not wanting to mention here.
Also cost of dumper trailers of suitable size & their weight and types.

Thank you for any relevant information!