Truck Operating Cost in India: Where a Transporter's Money Goes
Kushagra Bhargava
Ask any fleet owner what decides their profit, and most will say the freight rate. Look closer, and the answer is somewhere else.
A transporter does not decide the price of fuel. In most cases, the customer decides the freight rate. What the transporter does control is how well the trucks run. In Indian trucking today, that is where the profit is made or lost.
Why is it so hard to make money running trucks?
The Indian trucking market has more trucks than loads. A study by IISD and IRADe found that 80% of truck operators own fewer than five trucks. With that much competition, freight rates follow demand, not cost.
Not long ago, many transporters worked out their costs and added a 10 to 15% profit on top. That way of pricing has mostly gone. Today, the customer offers a rate, and the transporter has to make it work.
Where does the money go?
Running a truck is a handful of big costs and many small ones.
Cost | How big it is | What decides it |
Fuel | 50 to 60% of operating cost (CRISIL) | Price, mileage and losses |
Tyres | Usually the next biggest cost | Air pressure, retreading, puncture care |
Maintenance and spare parts | Grows quickly as a truck ages | Age of the fleet, where parts are bought |
Driver | A fixed salary or a trip payment | How drivers are paid |
Tolls and paperwork | Small per trip, large over a year | Routes, compliance |
Delay | Penalties of a share of the freight per late hour | Breakdowns and waiting time |
At the national level, DPIIT and NCAER found fuel alone makes up 42.1% of road freight spending.
Why can't transporters charge more when costs rise?
May 2026 showed how little room transporters have. Fuel prices rose for the first time in over four years: ₹3 a litre on 15 May, and about ₹7.5 to ₹8 a litre within two weeks.
Most customers did not raise freight rates to match. CRISIL found operators could not pass on nearly 80% of the fuel cost increase on contracted freight. In April 2026, the cash left over before loan EMIs was only about 21.6% of costs.
Here is what that means in simple terms. An ₹8 rise on a base of about ₹88 is a 9% jump in fuel price. If fuel is 60% of your costs, your total cost goes up by about 5.5%, while your earnings stay the same.
So where does the profit come from?
From running the business better. Fleets that last make many small gains across the whole operation. Here is where they find them.
Fill every truck properly
Trucks have grown from carrying 10 tonnes to 40. A bigger, fully loaded truck needs one driver and pays one toll for far more cargo.
The rules have moved the same way. In 2018, MoRTH raised permitted weights for heavy trucks. The government said this would lift carrying capacity by 20 to 25% and cut logistics cost by about 2%. The best fleets load to the legal limit, every trip, and never beyond it.
Keep the fleet young
Old trucks break down more, spend more time in workshops and sell for less. Many well-run fleets sell trucks at around five years. In the episode, Sanjay Barse of Chintu Transport explains why he has followed this rule for two decades, and why he rarely needs a maintenance contract.
Engine choice matters too. A more powerful engine needs fewer gear changes on slopes, which can mean better mileage, not worse.
There is a lot of room to improve here. A CEEW survey of Indian trucks found BS-VI models made up just 6.3% of the fleet it studied, and heavy trucks above 30 tonnes reported mileage below 4 km per litre.
Look after the tyres
Tyres are often the second-biggest cost after fuel, and the easiest to waste.
Check air pressure often. If two tyres in a pair are at different pressures, one carries more load and wears out faster
Fix punctures quickly. A flat inner tyre that is ignored ruins its pair too
Rotate tyres and retread them at the right time
The US EPA's SmartWay programme finds that truck tyres running 10 psi below the right pressure cut fuel economy by 0.5 to 1%. A US FMCSA study found that only 44% of commercial vehicle tyres were within 5% of the right pressure.
Here is a simple example using figures shared on the episode:
How the tyre is used | Cost | Distance | Cost per km |
Run to the recommended life | ₹22,500 | 75,000 km | ₹0.30 |
Looked after, retreaded once, then sold as scrap | ₹22,500 + ₹5,000 retread, less ₹1,300 scrap value | About 1,55,000 km | ₹0.17 |
On a truck with 22 tyres, that is close to ₹3 saved for every km. Over 1,00,000 km in a year, it comes to nearly ₹3 lakh per truck.
Fix small problems before they become big ones
A truck that breaks down on the highway costs far more than one checked in the yard. Fleets that do well check every truck after each trip, before it is loaded again. They keep a puncture kit in every truck. They buy common parts in bulk, matched to the right specification. And they do small jobs in-house, instead of losing hours at a service centre for a bulb change.
Small problems grow quietly. The US EPA notes that truck tyres can lose up to 2 psi a month even when sealed properly, and cites an industry survey where only 8% of truck drivers checked pressure with a gauge.
Pay drivers for the trip, not the month
A driver on a fixed salary earns the same whether he drives 200 km or 400 km. A driver paid by the trip, with a fixed fuel allowance, earns more when he drives smoothly, saves fuel and keeps the truck in good shape.
On a long run, a careful driver can save 50 to 100 litres. That money goes into his pocket, and the owner gets a truck that is better cared for. With drivers so hard to find, a pay model that rewards good driving also helps them stay.
This matters because good drivers are scarce. TeamLease puts the average truck driver's pay at ₹20,000 to ₹25,000 a month, and estimates there are only about 55 drivers for every 100 trucks.
Keep the wheels turning
In trucking, time is money in the most literal way. A truck standing still earns nothing, and a late delivery can cost a share of the freight as penalty. Every hour saved on breakdowns, paperwork or waiting adds to the bottom line.
Indian trucks have little time to spare. CRISIL estimates the average truck covers only about 325 km a day, at around 35 km per hour. When check-post stops fell after GST, operators reported maintenance costs dropping by up to 30% and mileage improving by 10 to 15%.
What does it all add up to?
No single change makes a fleet profitable. Load a little better, run tyres a little longer, cut a few breakdowns, save some fuel, keep good drivers. Each gain is small. Together, they decide whether a fleet makes money.
The customer sets the rate. The market sets the price of fuel. In the commercial vehicle business, the only way to stay competitive and make a profit is to get better at operations, every day, on every truck.
Frequently asked questions
What is the biggest operating cost for a truck in India? Fuel, at 50 to 60% of operating cost by most estimates. Tyres usually come next.
How can transporters reduce tyre cost per km? Check air pressure often, rotate tyres, fix punctures quickly and retread at the right time.
Why don't freight rates rise with fuel prices? The market has more trucks than loads, so rates follow demand. CRISIL found operators could not pass on about 80% of recent fuel cost increases.
How do fleet owners make a profit in trucking? By running better: fuller loads, a younger fleet, careful tyre and maintenance practice, smarter driver pay and less time standing still.
Watch the full episode
Hear the director of Chintu Transport, one such company, talk about everything in the industry in The Fuelling Pod, Episode 1.
References
Fuel at 50 to 60% of costs, 80% not recovered, 21.6% free cash flow: CRISIL, via Angel One, May 2026
Market structure, 80% of operators own fewer than five trucks: IISD GSI and IRADe, The Impacts of India's Diesel Price Reforms on the Trucking Industry
Fuel at 42.1% of road freight expenses: DPIIT and NCAER, via Outlook Business, 2025
₹3 revision on 15 May 2026, Delhi prices: All India Radio News
Cumulative increase of about ₹7.5 by 25 May 2026: Angel One
2018 axle load revision: MoRTH, via Maritime Gateway and Autocar Professional
BS-VI share and heavy truck mileage: CEEW, Highway Charging Infrastructure for Zero-Emission Trucking, annexure
Tyre pressure, fuel economy and pressure loss: US EPA SmartWay, Tire Pressure Systems fact sheet
44% of tyres within 5% of target pressure: US FMCSA, via Trucking Info
Driver pay and ratio: TeamLease Services, India Sea Trade News, May 2026
Average truck distance and speed: CRISIL Research, November 2017
Maintenance and mileage gains after GST: operators via PTI, Asia Times, January 2018
Fleet and tyre figures: The Fuelling Pod, Episode 1, Sanjay Barse, Chintu Transport. Tyre cost per km is calculated from these figures
