Road freight costs – what affects them and how to reduce them?

Road freight plays a crucial role in the economy, enabling the efficient movement of goods over both short and long distances. For many companies, road freight costs make up a significant portion of operational expenses. Understanding the factors that influence these costs is absolutely essential for maintaining the competitiveness of your services in this dynamic market.

If you want to learn about the key components of road freight costs and discover practical ways to reduce them, you’re in the right place! This article provides valuable insights and actionable tips to help you optimize your transport operations and cut unnecessary expenses.

What affects road freight costs?

The costs associated with road freight operations are shaped by multiple factors, which can be divided into two main categories – fixed costs and variable costs. While many other elements influence the final price of a transport service, we will focus on the key components that have the greatest impact.

Fixed costs

Fixed costs are expenses that remain constant regardless of the number of trips made or the distance covered by vehicles.

Understanding these costs is essential for accurately calculating transport expenses, as they are always factored into pricing and service calculations. Below are the most significant fixed costs in road freight.

Depreciation and vehicle maintenance

Vehicle depreciation is a fixed cost in road freight operations. It results from the gradual wear and tear of the transport fleet, causing its value to decrease over time. Older vehicles require more frequent part replacements and repairs, leading to higher operational expenses.

Every transport company owner understands the importance of regular technical inspections to keep the fleet in good condition. Additional costs in this area also include seasonal tire changes and regular vehicle servicing.

Leasing or loan installments

Leasing and financing through installments are popular ways to acquire modern vehicles in the transport industry without making a large one-time investment that could heavily impact a company’s budget.

Although regular payments add a monthly expense, they allow for more frequent fleet modernization and often lower maintenance costs, as many leasing agreements include servicing and maintenance packages.

Insurance

Insurance is an essential fixed cost that transport companies must consider. Heavy-duty vehicles require financial protection against accidents or damage, making policies such as third-party liability insurance (mandatory) and comprehensive insurance (optional) crucial.

The total insurance cost for a company depends on fleet size, vehicle age, and the type of cargo transported. Careful policy selection can help reduce risks and avoid unexpected financial burdens.

Taxes and registration fees

Due to the nature of their business, transport companies incur fixed costs related to taxes, such as the transport vehicle tax in many regions.

Additionally, registration fees are another financial obligation that carriers must pay to legally operate their fleet. These costs can vary depending on the country, vehicle specifications, and transport regulations.

Accounting services

Running a freight transport business requires professional financial documentation management. To ensure compliance with regulations and to continuously monitor expenses and revenue, many companies rely on external accounting and tax advisory services.

While outsourcing accounting services incurs an additional cost, it is a highly beneficial investment. Financial reports and analyses prepared by experts help monitor the company’s financial health and allow for flexible budget adjustments based on the current situation.

Administrative and office costs

The larger the company, the greater its need for administrative and office support. To ensure smooth operations, transport businesses must employ staff responsible for various business functions.

Fixed costs in this area include:

• Salaries for administrative and office personnel
• Office equipment and software updates
• Office space rental and maintenance services

Additionally, every transport company must cover fixed business operation costs, which are a standard requirement for all entrepreneurs. These expenses are crucial for ensuring efficient and compliant business management.

Variable costs

When calculating road freight costs for truck transport, it is essential to consider variable expenses that fluctuate based on several factors. These include route length, cargo type and weight, vehicle usage intensity, and other real-time transport-related conditions.

Variable costs can significantly impact overall transport expenses, making their careful monitoring and management crucial for maintaining profitability.

Fuel & diesel prices

Fuel costs represent one of the largest expenses in road freight operations. As the number of kilometers driven increases and the cargo weight grows, fuel consumption rises accordingly. The fuel efficiency of a vehicle also plays a crucial role, making it worth investing in newer, more fuel-efficient truck models.

The current situation in the oil market, including rising crude oil prices, also impacts fuel costs. Many companies seek to reduce expenses by promoting eco-driving techniques among drivers and adopting alternative fuels, which, when strategically used, can contribute to long-term cost reductions.

Toll fees and parking charges

Toll fees are associated with the use of paid highways, certain bridges, tunnels, and parking areas. Road freight transport relies heavily on major highways to ensure fast long-haul deliveries. However, tolls are often mandatory, especially for trucks over 3.5 tons.

The constant increase in toll fees and their variability between countries require careful route planning by carriers. Modern route management tools, such as HOGS Maps >> [link], help optimize transport costs.

Additionally, many countries introduce new regulations aimed at environmental protection. As a result, toll fees may also factor in noise emissions and CO2 output from vehicles.

Maintenance and repairs

Variable costs related to vehicle maintenance and repairs primarily involve unexpected breakdowns and part replacements. The older or more heavily used the fleet, the higher the frequency of maintenance and repair costs, making fleet renewal a key consideration for long-term cost efficiency.

Driver salaries – labour costs

A significant part of operational expenses in transport services is driver salaries, which include daily allowances and bonuses for overtime or international routes. Wages are determined by working hours and the specific nature of each transport assignment.

Seasonal employment also affects labor costs, as companies often hire additional staff to meet higher transport demand during peak periods.

There are also special cases where a company takes on an order for hazardous cargo transport, but its regular drivers lack the required certifications. In such instances, temporary specialized drivers with the necessary training and permits must be hired, adding to total transport expenses.

To accurately calculate the total transport cost, all of the above elements, conditions, and additional expenses must be taken into account, ensuring a realistic assessment of operational costs and improved pricing strategies.

6 ways to reduce road freight costs

As you now know, many factors influence the total cost of road freight transport. Below is a list of the best strategies for reducing expenses, helping your transport services become more competitive and cost-effective.

1. Route optimization

One of the most effective ways to reduce transport costs is by using modern tools like HOGS Maps to plan the most efficient routes. These solutions help shorten travel distances, reduce transit time, and even allow trucks to avoid current traffic congestion.

This approach directly contributes to lower fuel consumption and often helps minimize toll fees, resulting in significant savings.

2. Regular vehicle maintenance

Routine fleet maintenance is essential for reducing the risk of breakdowns and avoiding expensive repairs. Detecting potential issues early helps prevent major vehicle damage, ultimately saving money on servicing costs.

Additionally, keeping vehicles in top condition enhances fuel efficiency, which plays a crucial role in optimizing overall transport expenses.

3. Driver training

Every transport company should invest in specialized training for truck drivers. Programs such as eco-driving workshops help reduce average fuel consumption, which is one of the largest cost components in road freight.

Moreover, well-structured training can help drivers extend vehicle lifespan by reducing wear and tear, improve road safety, and lower accident risks. As a result, companies benefit from fewer repairs and better insurance offers, further decreasing operating costs.

4. Negotiating with suppliers

Maintaining strong, long-term relationships with suppliers of fuel, spare parts, and maintenance services can significantly impact cost reductions. Establishing favorable agreements may lead to better pricing, discounts, or improved payment terms, ultimately saving your company a substantial amount.

Existing agreements can also be renegotiated to secure more competitive rates, making supplier negotiations a key strategy for reducing transport expenses.

5. Using fleet management technology

Implementing advanced fleet technologies such as GPS tracking, telematics systems, and transportation management systems (TMS) plays a crucial role in cost reduction. These tools help track vehicle locations, monitor fuel consumption and driver behavior, and optimize fleet utilization.

Specialized solutions such as HOGS Maps, HOGS Freight Automation, and HOGS Navi >> provide essential support for freight planners, dispatchers, and logistics coordinators.

By leveraging these tools, transport companies can maximize efficiency, improve route planning, and enhance overall service effectiveness.

Want to learn more about TMS systems? Read our article: What is TMS? 7 benefits of a transportation management system >>>

6. Office process optimization

Introducing office optimizations, such as modern document management software and task automation tools, can significantly improve administrative efficiency in transport companies.

By reducing the time spent on routine administrative tasks, businesses can streamline operations, enhance productivity, and ultimately cut operational costs.

A fast way to calculate road freight costs

Looking for an easy way to calculate road freight costs while also identifying ways to optimize them? The solution is HOGS Maps.

HOGS Maps is an innovative tool that enables quick and precise cost calculations for transport operations. With real-time updated data such as toll fees, fuel prices, and current traffic conditions, HOGS Maps helps plan the most efficient routes and predict transport expenses before accepting a job. Simply set the route, and the system will automatically calculate all key transport costs.

Try HOGS Maps – totally free for 14 days!

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Summary

Managing road freight costs is a challenge that requires an understanding of the many factors affecting operating expenses for carriers. Identifying key fixed and variable costs and implementing cost-reduction strategies can significantly improve efficiency and market competitiveness in the transport industry.

Innovative tools like HOGS Maps provide valuable support for accurate route planning in both domestic and international transport. Using such solutions helps optimize operations, leading to lower costs and greater profitability.

Frequently asked questions (FAQ)

What is the cost of road freight per kilometer in Europe?

It is impossible to determine a single fixed cost per kilometer for road freight across all of Europe, as prices vary depending on the country, toll fees, fuel prices, and local regulations.

In 2025, the average European road freight rates per kilometer ranges from €1 to €1.5, but the exact price depends on multiple variables.

What are the costs involved in road freight?

Road freight costs can be divided into fixed costs and variable costs.

Fixed costs: Depreciation and fleet maintenance, leasing or loan payments, insurance, taxes and registration fees, accounting services, and administrative and office costs.

Variable costs: Fuel expenses, toll and parking fees, maintenance and repairs, and driver wages.

To learn more about these costs and how they impact freight pricing, check out the section “What affects road freight costs?” in this article.

Can collaboration with other companies help reduce transport costs?

Yes! Road freight market companies often collaborate in transport operations, particularly in cargo transport services. This allows carriers to share resources, such as warehouse space or shipments, helping to lower unit transport costs and maximize fleet efficiency.

Through such cooperation, companies can also reduce the number of empty runs, which otherwise create unnecessary financial strain on a transport company’s budget.