Pricing may be the biggest decision in a courier business, and it gets surprisingly little thought. A lot of operators price by gut, copy a competitor, or keep whatever they charged the week they started. That's how you end up with jobs that lose money, quotes that change depending on who answered the phone, and money left on the table.
The approach below starts from what a job costs you and builds up from there.
Start with your cost floor
You can't price for profit until you know what a job actually costs. The main pieces:
- Fuel cost per mile. Your vehicle's MPG and local fuel prices give you a per-mile fuel cost. At 20 MPG and $3.50 a gallon, that's $0.175 a mile in fuel alone.
- Vehicle depreciation and maintenance. Work vehicles wear out fast. Take last year's spending on tires, brakes, oil changes, and repairs, add a share of what the van will cost to replace, and divide by the miles you drove. That's your wear cost per mile.
- Driver time. What's your real hourly rate once you count driving, loading and unloading, and paperwork? A job that takes 90 minutes at a $30/hour target costs $45 in labor before any other expense.
- Insurance and overhead. Commercial auto insurance, business insurance, software, and other fixed costs have to be spread across all your jobs.
Add those up and you have your cost floor: the least you can charge on a job without losing money. Everything above it is margin.
Structure your pricing
Most courier pricing that works has three parts.
Base rate per mile
This covers fuel, vehicle costs, and driver time for the driving part of the job. Rates vary a lot by market, vehicle, and service level. A cargo van in a big metro prices differently from a sedan in a small town. Work yours out from your own costs plus the margin you want instead of copying someone else's number.
Minimum charge
Short jobs don't bring in enough at a per-mile rate to justify the time. A 2-mile run still means parking, walking the package in, and getting a signature. Set your minimum from the least time any job takes you, priced at your hourly rate. If the shortest job takes you 40 minutes door to door, your minimum should cover 40 minutes of your time.
Surcharges for extras
Anything that adds real cost to a job should have its own fee:
- After-hours or weekend delivery
- Stairs or elevator-required delivery
- Inside delivery (vs. curbside)
- Oversized or heavy items
- Rush/priority service
- Signature required or chain of custody documentation
Carrying a 60-pound box up to a third-floor walk-up takes longer than leaving an envelope with a receptionist. Charge for that rather than folding it into your base rate.
Stay competitive without racing to the bottom
It helps to know what competitors charge, but trying to beat the cheapest one is a race you don't want to win. A better approach:
- Know the low, middle, and high end of your local market
- Position on what you're genuinely good at (reliability, a specialty, long client relationships)
- Price for the customers you want, not for everyone
Clients like law firms, clinics, and banks often care more about reliability and accountability than about saving a few dollars a run. With them, compete on service rather than price.
Make your pricing easy to understand
If customers can't quickly figure out what they'll pay, they hesitate or go elsewhere. An online quote tool fixes this by applying your rules for them and showing an estimate without making them understand the formula.
It also keeps you consistent. Everyone gets the same price for the same job, which builds trust and cuts down on haggling.