Courier service Profit from a Cost Reduction
Net recurring improvement = spend × saving rate − implementation cost
Gather completed route logs, fuel receipts and delivery records. Include mileage, dispatch time, and handling. The starting figures are examples. Replace them with your own records.
Formula and worked example
Net recurring improvement = spend × saving rate − implementation cost
| Input | Example |
|---|---|
| Current recurring spend | 10,000 |
| Expected saving | 8 % |
| Monthly implementation cost | 200 |
| Calculated result | 600 per period |
Choose reliable inputs
Compare route time, vehicle cost, delivery density and collection timing. For this courier service calculation, use completed route logs, fuel receipts and delivery records and a consistent definition of one delivery.
- Mileage: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Dispatch time: include the portion belonging to this delivery or reporting period, and record where the value came from.
- Handling: include the portion belonging to this delivery or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Does an 8% supplier saving become 8% more profit?
Only the affected spend is reduced. Include implementation and service-quality impacts separately.
What if this input changes?
If current recurring spend rises by 10%, this example changes by 80 per period. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.