Ask a new operator what a route costs and they will usually quote the driver's day rate plus fuel. Ask an experienced operator and they will give you a number 40–60% higher. The difference is where subcontractor businesses quietly die.
The visible costs
These are the ones everyone budgets for: the driver's pay for the day and the diesel in the tank. On a typical van route these are real and significant, yet they are less than two-thirds of the story.
The costs that arrive later
- Vehicle standing costs. Rental or finance is daily whether the van moves or not. Insurance for hire-and-reward delivery work costs multiples of ordinary van cover. Both must be spread across worked days only: a van that works five days spreads seven days of standing cost across five days of revenue.
- Maintenance and tyres. Multi-drop work is brutal on brakes, clutches and tyres. Urban routes add kerb damage; rural routes add mileage. A realistic per-day reserve is not optional.
- Damage and penalties. Doors, mirrors, bumpers and the occasional barrier have a way of finding delivery vans. Depot contracts often carry penalty and charge-back exposure that never appears in the headline rate.
- Downtime. When the van is off the road, the route still needs covering, often at short-notice rental prices. The cost of downtime is not the repair bill; it is the repair bill plus the replacement vehicle plus the disruption.
- Cover and churn. Every driver eventually takes a holiday, gets ill, or leaves. Recruiting, referencing and onboarding a replacement costs real money and, more dangerously, service quality while the new driver learns the route.
- Administration. Someone has to do payroll or invoice processing, manage documents, handle depot queries and chase payments. If that someone is you, your time is a cost too.
Why this arithmetic matters
Every one of these costs is predictable in aggregate, even though each individual event feels like bad luck. The operators who survive are the ones who price the aggregate into every rate they accept, and who walk away from contracts that cannot carry it.
Before you commit to a rate, build the full daily cost of the route and test the contract against it. If you want help pressure-testing your numbers, a diagnostic session exists for precisely this question.