How to Calculate Drayage Rates for Customers: A Basic Step-by-Step Guide

Calculating drayage rates is a complex process that can significantly impact profitability. Many trucking companies struggle with pricing, either underquoting and losing money or over-quoting and losing business. To succeed, companies need a structured approach to cost calculation and markup.

The Key to Profitability: Costs vs. Pricing

One critical principle to remember: costs and pricing are separate discussions. Your costs determine your break-even point, but pricing should be driven by market demand, competition, and perceived value. Understanding this distinction helps trucking companies stay profitable in competitive markets.

This guide breaks down the essential cost components of drayage pricing, explores different markup methods, and provides a step-by-step approach to accurately calculating rates.

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Key Cost Components of Drayage Rates

Drayage costs are categorized into three main areas: operating costs, overhead costs, and accessorial charges. Understanding each of these is critical to accurate pricing.

1. Operating Costs (Break-Even Costs)

These are the fundamental costs of running a trucking operation and must be covered to avoid losses:

• Driver Wages: Costs vary based on pay structure (per mile, per move, hourly, or revenue split). Ensure your model aligns with cost management strategies.
• Fuel Costs: Based on mileage, fuel efficiency, and applicable surcharges. Keep up with the latest fuel prices from the EIA’s Gasoline and Diesel Fuel Update.
• Truck Financing & Lease Payments: Monthly costs for truck ownership or lease agreements.
• Truck Maintenance & Repairs: Regular servicing, tire replacements, and unexpected repairs. Owner-operators should factor these into their pricing.

2. Overhead Costs

These are essential expenses necessary to keep the business running:

• Insurance Costs: Cargo insurance, liability insurance, and other compliance-related costs.
• Administrative Expenses: Dispatching, accounting, and regulatory compliance.
• Technology & Software Fees: Costs for TMS, ELDs, and routing software.

3. Accessorial Charges (Additional Fees)

These fees cover extra services and potential delays. While they can be passed through to customers, they often create cash flow challenges due to long payment cycles (45-90+ days). Additionally, companies rarely recover 100% of accessorial costs.

Common accessorial charges include:

• Detention & Demurrage Fees: Charges for delays at pickup or delivery points.
• Terminal & Port Fees: Entry fees, handling charges, and container-related costs.
• Tolls: Charges for toll roads and bridges.
• Chassis Splits: Fees for picking up a chassis from a different location than the container.
• Pre-Pulls: Charges for pulling a container early and storing it before final delivery.

Markup Methods for Profitability

Once you’ve calculated your costs, choosing the right markup method is crucial for profitability. Pricing should reflect both internal costs and external market conditions.

1. Percentage Markup

A fixed percentage is added to cover profit and overhead.

• Example: 20% markup on a $500 cost = $600 final rate.

2. Flat Fee Markup

A fixed dollar amount is added per load.

• Example: A $100 markup applied regardless of distance.

3. Variable Markup Based on Lane & Demand

Adjust markup dynamically based on demand, lane congestion, and service specialization.

• Example: Higher markup for high-demand, low-competition routes.

Step-by-Step Guide to Calculating Drayage Rates

Quick Summary:

1. Determine the base rate
2. Calculate fuel costs
3. Add chassis fees (if applicable)
4. Estimate detention & demurrage fees
5. Apply accessorial fees
6. Include operating & overhead costs
7. Choose a markup strategy
8. Finalize & communicate the quote

Step 1: Determine the Base Rate

Use either a per-mile or flat rate based on the route and service type.

• Check historical pricing and competitive rates using sources like Dray Insight and Drayage.com.

Step 2: Calculate Fuel Costs

Use current diesel prices and apply the standard fuel surcharge formula.

• Reference: EIA Fuel Price Trends.

Step 3: Add Chassis Fees (If Applicable)

• Factor in daily or per-move chassis rental costs.

Step 4: Estimate Potential Detention & Demurrage Fees

• Consider typical container dwell times and customer history.
• Include buffer charges for unexpected delays.

Step 5: Apply Accessorial Fees

• Add fees for chassis splits, pre-pulls, tolls, and other extras.
• Review margin opportunities for each and cost of capital vs. recovery. 

Step 6: Include Operating & Overhead Costs

• Ensure driver wages, maintenance, insurance, and technology costs are accounted for.

Step 7: Choose a Markup Strategy

• Apply a percentage, flat fee, or demand-based markup to ensure profitability.
• Ensure pricing aligns with target gross profit margin goals can range anywhere from 10-30% to maintain financial sustainability in most cases.

Step 8: Finalize & Communicate the Quote

• Present the rate in a clear, professional format to build trust with customers.

Common Pricing Mistakes to Avoid in Drayage

• Confusing Costs with Prices – Costs determine the minimum you should charge, but pricing must be dynamic, factoring in market demand, competition, and profitability.
• Relying on Loss Leaders Without a Strategy – Offering below-cost shipments to attract business can backfire if you don’t have a plan to offset losses with higher-margin moves. Shippers know how to exploit loss leaders to lower their overall costs.
• Assuming 100% Revenue Recovery – You will never recover 100% of what you bill and if your customer pays on credit you are loaning them money at 0% interest. Build in buffers to cover inevitable shortfalls and delays in payments.
• Applying a One-Size-Fits-All Markup – Flat markups leave money on the table. Dynamic pricing based on shipment complexity, market rates, and lane-specific costs ensures maximum profitability.

Accurate drayage pricing requires a deep understanding of costs and a strategic markup approach. Your costs determine your break-even point, but pricing should be market-driven and customer-focused.

By following this guide, trucking companies can confidently quote profitable rates while remaining competitive.

Further Reading

• Your Rates Won the Drayage RFQ. Now the Real Work—and Bigger Opportunities—Begin.
• Drayage RFQs 2025: Pricing Strategies & Procurement Tactics Explained