How to Calculate Cost per Stop for FedEx Routes (Formula and Worked Example)

Cost per stop is your total operating cost for a FedEx week divided by the number of stops on that week's settlement statement. Work it out one Saturday–Friday week at a time. Count every cost of running the routes: driver pay with payroll taxes and workers' comp, your trucks, the fuel you buy, insurance, the deductions taken out of your settlement, and overhead. Then put it next to your revenue per stop for the same week. The gap between the two is what each stop earns you.

Cost per stop = total operating cost for the week ÷ stops on that week's settlement

Revenue per stop = settlement revenue for the week ÷ the same stops

Margin per stop = revenue per stop − cost per stop

How to calculate it, step by step

1. Pick the week. FedEx weeks run Saturday through Friday, and each settlement covers one of them. Use that same week for every number below.
2. Take the stops from the settlement. Use the stops FedEx paid you for that week (pickup, delivery and e-commerce), counted the same way every week. That is the bottom of the fraction.
3. Add up driver labor for the same days. Gross wages plus the employer's payroll taxes and workers' comp, not take-home pay. Payroll periods rarely line up with FedEx weeks, so match the days, or work in blocks of several weeks.
4. Add the trucks. Loan or lease payments (or depreciation if you own them outright), maintenance, repairs and tires.
5. Add the fuel you bought. The fuel surcharge on your settlement is revenue. The fuel you pay for at the pump is the cost.
6. Add insurance and settlement deductions. The recurring deductions are real costs, even though FedEx takes them out before it pays you.
7. Add overhead for the fully loaded number. Your own pay if you work the business, a manager, software, accounting, a shop.
8. Divide. Total cost ÷ stops. Then divide the week's settlement revenue by the same stops to get revenue per stop.

A worked example

These are made-up round numbers, chosen so the arithmetic is easy to follow. They are not typical figures and not a target: your own numbers depend on how dense your routes are, the terrain, how you pay drivers, and your trucks.

• Stops on the settlement: 4,000 for the Saturday–Friday week
• Driver labor: $6,000 (gross wages, employer payroll taxes, workers' comp)
• Trucks: $1,500 (payments, maintenance, tires)
• Fuel purchased: $1,000
• Insurance and settlement deductions: $800
• Overhead: $700

Total cost is $10,000, so the fully loaded cost per stop is $10,000 ÷ 4,000 = $2.50. Counting only labor, trucks and fuel, the direct cost per stop is $8,500 ÷ 4,000, about $2.13. If the same settlement paid $12,000, revenue per stop is $3.00, so each stop earned $0.50 after every cost: $2,000 for the week.

Direct or fully loaded?

Keep both. Direct cost per stop (labor, trucks and fuel) moves week to week with how the routes run, so it is the one to watch. Fully loaded cost per stop adds insurance, deductions and overhead, and tells you whether the business as a whole works. Never compare one week's direct number with another week's fully loaded one.

Mistakes that make the number look better than it is

• Dividing a date range by seven. Count the distinct FedEx weeks your data covers. On a terminal that runs five or six days, calendar-week math overstates weekly stops and understates cost per stop.
• Assuming a five-day week. Terminals run five, six or seven days. Use the days your routes actually ran.
• Leaving settlement deductions out because they never reach your bank account as an expense.
• Treating the fuel surcharge as money off your fuel bill. It is revenue. Keep it on the revenue side.
• Mixing periods. A payroll period set against a different settlement week makes the number swing for no real reason.
• Filling gaps with guesses. If a driver's days or a week's costs are missing, leave them out and say so. A partial number you can explain beats a complete-looking one built on assumptions.
• One number for every route. A dense route and a rural one can differ a lot per stop. Work it out per route when you are deciding something about a route.

Cost per stop for each route

For decisions about a single route (reworking it, pricing a supplemental, weighing a MESO option), work it out per route: that route's stops from your daily service worksheets, its driver's labor for the same days, and its truck. Spread shared costs such as insurance and overhead by stops, and note that you did.

Common questions

What is a good cost per stop for FedEx routes?

There is no published figure worth trusting. Numbers passed around in contractor groups vary with density, terrain, pay structure, trucks and the year, so they are rough estimates at best. Two comparisons are useful: your cost per stop against your own revenue per stop, which tells you what each stop earns, and against your own last few weeks, which tells you which way it is heading.

Is the fuel surcharge part of cost per stop?

No. The fuel surcharge on your settlement is revenue, so it belongs in revenue per stop. The fuel you buy is the cost.

Should I divide by stops or by packages?

Stops. Your settlement pays substantially by the stop, and stops drive a route's time. Packages per stop is a separate number that tells you how dense the stops are.

Do settlement deductions count as costs?

Yes. FedEx takes them out before it pays you, but they are costs of running the business.

How often should I calculate it?

Every FedEx week, and read it over four or more weeks. A single week moves with the package mix, a truck in the shop or a holiday. The direction over a month is the signal.

What is the difference between cost per stop and labor cost per stop?

Labor cost per stop counts only driver pay. It is almost always the biggest piece, and the one you can act on fastest through pay structure and how routes are staffed. Cost per stop counts everything.

Keeping it current without the spreadsheet

The method is simple. Keeping it current is the hard part, because it needs settlement stops, payroll and truck costs joined every week under the same rules. In Route Impact, your AI payroll analyst works out labor cost per stop from your payroll and daily service worksheets, per FedEx week and per CSA. It counts only the days it can see, so a driver without data shows as uncovered, never as a guess. Your AI bookkeeper reads your QuickBooks profit and loss for the rest of your costs. If you would rather keep it in a spreadsheet, the steps above work there too: the rules matter more than the tool.