The Truck Owner's Balance Sheet

What it costs to run a truck - EMIs, diesel, tolls, wages, maintenance - and why margins for small operators are often thin.

Running a truck is a business with fixed and variable costs.

Fixed costs

Loan EMI on the truck.
Insurance and permits.
Driver wages (often partly fixed).

Variable costs

Diesel: often the single biggest cost, commonly around half of operating costs.
Tolls.
Tyres and maintenance.
Driver allowances for food and trips.
Loading and informal charges.

A simple example

Suppose a trip earns 60,000 rupees in freight. Costs:

Diesel: 30,000 rupees.
Tolls: 6,000 rupees.
Driver and helper: 8,000 rupees.
Maintenance and tyres share: 4,000 rupees.
Broker commission: 2,000 rupees.

Trip surplus: 10,000 rupees, before the EMI and insurance. If the truck makes three such trips a month and the EMI is 35,000 rupees, very little is left, and an empty return trip or a breakdown can wipe out profit.

Why margins are thin

Intense competition among many small owners.
Diesel price changes not always passed on.
Waiting time without earnings.

Utilisation is key

The more kilometres a truck runs with cargo each month, the more it spreads its fixed costs.

The breakdown

A truck's gearbox fails mid-trip, costing 40,000 rupees in repairs and a week off the road. That month, the owner struggles to pay the EMI.

Thinking truck owners earn high profits because freight bills look large

Diesel, tolls, wages and EMIs eat most of the revenue.

Key takeaways

Trucks have fixed costs like EMIs and variable costs like diesel.
Diesel is often around half of operating costs.
Margins are thin due to competition and waiting time.
Higher utilisation spreads fixed costs.