This is how much cargo van drivers make:
The average salary of a cargo van driver in the US is $33,900, but it usually ranges from $29,800 to $39,300. Independent cargo van drivers (owner-operators) earn $1 to $2 on average per mile, while cargo van drivers who work for companies earn an average of between $0.38 to $0.52 per mile.
With the ever-rising growth of e-commerce, grocery, meal delivery, and courier services, the demand for cargo van drivers isn’t falling anytime soon. In my opinion, the pay should also remain reasonable.
The U.S. Bureau of Labor Statistics reports that the overall employment of cargo van drivers is expected to grow by up to 12% between 2020 and 2030. That’s a job outlook faster than average for most occupations.
As I’ve highlighted above, a cargo van driver may work independently (owner-operator) or for a company. It’s, therefore, important to break down the potential earnings for both categories, which we’re getting into soon.
Here are the important things I’ll help you figure out in this article:
- The differences between owner-operators and company cargo van drivers
- The amount a cargo van driver really earns
- What influences a cargo van driver’s earnings
- How to find cargo van driver jobs
- How to calculate your cost per mile and profits as a cargo van driver
- How to boost your profits
An Owner Operator Uses Their Own Van
An owner-operator usually works as an independent contractor to offer delivery and transit services for small cargo.
As you may have figured out from the name, you have to work with your own van because the company won’t provide you with one.
While you may not worry about finding customers, you have to win the heart of the company you’re working with.
Additionally, your van’s maintenance and ownership costs are up to you. Generally, you get paid per mile, but you may also be paid per drop-off or some other basis.
A Company Driver uses the Company’s Cargo Van
On the other hand, a cargo van driver who works directly for a company delivers packages using the company van.
You’ll likely be paid an hourly wage, and may also receive other employee benefits.
The perk in it is that you don’t worry about finding customers or struggle with fuel and maintenance expenses.
All you have to do is show up at the warehouse daily, get your load of deliveries and instructions, and hit the road.
Independent Cargo Van Drivers Earn More
To be blunt, the amount of money a cargo van driver earns depends on the type of services they offer and the number of work opportunities available.
For example, if you make less than $50 an hour and can only land a couple of gigs a week, you’re looking at a monthly earning of a few hundred dollars.
The BLS reports indicate a cargo van driver could earn a mean hourly wage of $19.08, which translates to a mean annual salary of $39,680.
Other reputable sources like Glassdoor estimate that cargo van drivers have an average base pay of $36,858 per year.
According to Indeed, a cargo van driver who offers courier services earns up to $20.15 per hour. That translates to $41,219 annually.
Here are some listings for cargo van driver earnings that I pulled from Glassdoor:
|Company||Job Description||Average Base Pay (USD)|
|Elgin Sweeping Services||Owner Cargo Van Driver||$28 to $30 per hour|
|ArcBest||Owner Cargo Van Driver||$27 to $29 per hour|
|Tri-State Expedited Services||Cargo Van Driver||$23,000 to $25,000 monthly|
|ICM Corp||Parcel Delivery/ Pickup Cargo Van Driver||$14 to $15 per hour|
|Roadrunner Auto Transport||Lead Cargo Van Driver||$11 to $12 per hour|
These are for both independent and company cargo van drivers.
According to ZipRecruiter, an independent cargo van driver earns an average of $65,446 per year in the US.
If you try to wrap your head around that figure, it breaks down into an hourly wage of $31.46, a weekly wage of $1,259, or a monthly pay of $5,454.
ZipRecruiter has also gathered data showing that most owner-operated cargo van driver salaries lie within the range of $29,000 and $57,000 per year. Top earners could pocket a remarkable annual salary of $173,500.
Since owner-operator salaries may vary by up to $28,000, it means there are several opportunities for improvement and better pay based on the driver’s age, skill level, and experience.
Below is a list of the top 10 cities where owner operator cargo van drivers earn the most:
|City||Hourly Wage||Weekly Pay||Monthly Salary||Annual Salary|
|San Mateo, CA||$39.42||$1,577||$6,833||$81,994|
|Daly City, CA||$38.02||$1,521||$6,591||$79,092|
|San Fransisco, CA||$35.30||$1,412||$6,119||$73,433|
|New Haven, CT||$34.04||$1,402||$6,074||$72,888|
You probably notice that independent cargo van owners tend to enjoy higher earnings than those who work for companies, hands down.
Understandably, an independent cargo van driver enjoys flexible schedules and can plan their salary by choosing to haul the most profitable cargo only.
However, your potential earnings are still limited since you can only work so many hours a week.
Plus, if someone pays you on a per-mile basis, there are other caveats like significant deadheads.
You might also need to be available during odd hours, meaning you should beef up your efforts in planning your routes appropriately.
Many Factors Affect What a Cargo Van Driver Earns
The factors that influence what you can earn as a cargo van driver include the following:
- Level of education
- Certifications and extra skills
- Years of experience
- Miles covered
- Number of hours worked
- The cargo you haul
While you don’t need any compulsory formal education qualifications to be a cargo van driver, a company will likely pay you more if you have more than just a high school diploma. That’s where extra certifications and skills give you an edge.
Generally, a company will pay you hourly wages, but there are a few notable exceptions.
For example, companies that rely on van couriers to deliver meals pay their drivers per order. The formula also accounts for both mileage and waiting time.
It’s important to note that the income of a cargo van driver also varies depending on the workflow plus factors like the distance you travel, and the city you operate in.
According to Indeed, the average annual pay for cargo van drivers who work as couriers may be higher in the following cities:
|Los Angeles (California)||$44,737|
Cargo Van Drivers Enjoy Other Benefits
Since working as a cargo van driver is a service job, drivers often make extra money through daily tips and bonuses. Those who work for companies also enjoy the following benefits:
- Mileage reimbursement
- Fuel discounts
- Employee discounts
- Paid time off and sick leave
- Health insurance
- Life insurance
- Gym membership
How to Find Work as a Cargo Van Driver
The first thing I recommend is checking if you have all the requirements that your specific clients or the company you’ll be working for requires.
Once that’s done, you can choose an option that suits you from among the following:
1. Become a Local Van Courier
No city is left out when it comes to the sizzling demand for local couriers.
While bike couriers are lucky to earn the top spot in some busy cities, cargo van couriers still find several favorable opportunities with shipping companies.
That’s because a cargo van is sizeable enough for ferrying multiple packages and protecting them from the outside elements.
It’s good to start looking for contracts from any of the following renowned companies:
You may loathe tightly-packed urban areas like New York, but there’s a whole plethora of suburbs that are suitable for cargo van deliveries.
That’s why you need to leverage online marketplaces, so you identify courier-based logistics companies that need cargo van drivers in various locations. If you’re in the US, these online job posting sites include:
If you’re in Canada, your biggest bet is to browse through Workopolis and Job Bank.
Before you narrow down your options, I recommend you properly calculate your potential earnings and expenses, so you figure out whether you’ll be in profit or not.
2. Find Direct Clients to Partner With
The most exciting bit about being an independent cargo van driver is that you’re your own boss, and can choose the clients to partner with directly.
Understandably, you can submit your job application to a local business that may hire independent cargo van drivers, including the following:
- Accounting firms
- Financial planners
- Law firms
- Pharmacies, medical clinics, and hospitals
- Printing companies
- Real estate agencies
- Small local manufacturers
You could also take your creativity to higher levels by attending trade shows to identify start-ups that will likely outsource their delivery needs.
Another option is to list yourself on a classified ads site like Craigslist as an independent cargo van driver, let’s say one who transports medical products.
Since an independent cargo van driver is essentially a freelance worker, you need to have good networking skills and an entrepreneurial spirit to get consistent work.
It’s also a great advantage to have people who can endorse you for your work ethic, timeliness, and diligence in following through with delivery assignments.
3. Work for an Expediting Company
An expediter usually offers delivery services to shipping firms overnight or on the same day. That goes with the 24-hour drop-off and pick-up standard that’s common in the industry.
If you want to become a cargo van driver for an expediting company, you’ll have to transport tons of small loads very swiftly.
Notably, you’ll either be tasked with local or regional deliveries and don’t be surprised if they’re listed as emergency freight due to their urgent nature of delivery.
An expediter company may also pay you on a per-mile basis or according to the percentage of load revenue.
That can be tricky if you’ll have to deal with significant deadheads. So don’t just fall for an attractive payment package without considering the bells and whistles.
How to Calculate How Much You’ll Make Per Mile
Now that you have an idea of where and how to land a gig, let’s go through how you calculate your earnings and expenses so you determine the cost per mile and ultimately the profit.
This is how you compute your earnings as a cargo van driver:
1. Determine How Many Miles You will Drive
The key is to first determine how many miles you’ll drive every month because on average, you get paid by the mile.
Remember, the figure you come up with must account for both the compensated and uncompensated miles, the latter of which we refer to as ‘deadhead miles.’
Since most independent cargo van drivers go for about 100,000 miles or more in a year, let’s just work with the rough monthly figure of 8400 miles.
2. Calculate Your Overall Fixed Expenses
Right from the name, your fixed monthly expenses never change regardless of how you drive.
So be careful when making the calculations in this section, meaning you can’t include a variable expense like gas.
The following are examples of fixed monthly expenses that you could incur as an owner-operator cargo van driver:
- Loan payments – $1380
- Permit fees – $50
- Insurance – $920
- License fees – $150
The estimated total, in this case, is $2,500. While that turned out to be simple arithmetic, be careful when handling fixed expenses since they’re either classified as monthly or yearly (fixed) payments.
You make a single payment for a fixed expense like renewing your license plate. On the other hand, expenses like van insurance and lease payments are regular monthly payments.
If your annual fixed expenses come to the tune of $2,500, you can divide it by 12 months so you get around $208. It’s this smaller number ($208) that you’ll have to part with monthly in terms of fixed expenses.
3. Estimate All the Variable Expenses
As I highlighted, something like the cost of fuel is a variable expense, and you can only ever give it a good guess.
Remember, the number of variable expenses you incur each month depends largely on the miles you drive.
Driving more than usual implies more fuel consumption. Whatever extra you pay at the pump reflects in your monthly variable expenses.
And if there’s any sudden spike in the price of gas, these fluctuating monthly expenses will go up a bit.
Here’s a highlight of the most common expenses that fluctuate monthly:
- Fuel – $1900
- Servicing and maintenance – $1,120
- Broker-related fees – $1,350
- Food and lodging charges – $600
- Toll fees – $160
- Miscellaneous – $550
The estimated total for variable expenses, in this case, is $5,680. Your biggest monthly expenses here are inarguably fuel and broker fees.
You can therefore try to drive for shorter distances by leveraging route optimization software to reduce fuel costs. This will also check on the servicing and maintenance costs.
You can also outsource clients directly, so you pare down broker fees. By cleverly reducing your variable expenses this way, you’re set to increase your profit margin.
4. Determine Your Cost Per Mile and Profits
Once you’ve obtained a rough figure of how many miles you’ll be driving monthly, your fixed, and variable expenses, it’s time to do the final math, so we come up with the cost per mile.
So here’s where you divide the sum of your expenses (both fixed and variable) by the number of miles you drove in a month.
From the arbitrary figures above, our monthly expenses add up to $5,888 ($208 + $5,680). If we divide that by the estimated mileage of 8,400 per month, we have the cost per mile as $0.70.
That is, $5,888÷8400 = $0.70 per mile.
What these numbers say is that if you can earn at least $1.00 per mile for all the 8400 miles you’ll be driving a month, then you’ll be able to pay for all your expenses.
Since you can expect to earn between $1.00 to $2.00 per mile, whatever goes beyond the $0.70 baseline will go straight to your profits.
How to Increase Your Profits as a Cargo Van Driver
Here are five important things to maximize your potential profits as a cargo van driver:
1. Use Route Optimization Tools
Route optimization software will help you deliver faster and more safely, especially if you get paid per delivery.
While a normal satnav tool helps you identify the shortest path between points A and B, a route optimization tool helps you determine the most cost-efficient route between all the many places you have to deliver to.
You enter the number of parcels you’re set to deliver on a day, then it shows you the best route, including the address to deliver to first, second, third, and so on.
That means getting from one drop-off location to the next in an orderly manner and within the shortest time possible so you can focus on other gigs.
With this tool, you’ll be saving a lot on fuel and time that cannot be achieved with a normal satnav app or by working it out manually.
2. Opt for Fuel Reward Programs
Keep a note of gas stations that offer lower pump rates, so they become your number one option for fuel refills.
Another clever way to enjoy incentives and tweak your gas expenses is by signing up for reward programs. You could find these at your local fuelling station, or you could try out the following:
Still, I recommend you maintain a budget that will be enough to cater for unexpected extras whenever you drive overtime or change your route unexpectedly.
3. Use Accounting Software to Track Everything
As your workload increases, managing all your expenses and revenue could become a daunting task. Enter accounting software.
You don’t even have to reinvent the wheel or go for an expensive package; go for something that a self-employed person can afford, right from Excel.
Other examples include:
If you can teach yourself how to use them, well and good. But then it’s good practice to give your accountant access to the software at the end of the year, so they help you speed up your tax preps.
- Build Strong Partnerships With Direct Shippers
Industry associations that have local chapters in your area will help you find clients and grow professionally as a cargo van driver.
For example, you could join a local retailer association if retail stores make up most of your clientele.
You can also identify some underserved local industries in your area and ask them if you can serve them.
In my experience, it’s the best shot at earning decent money since you won’t pay any brokerage fees and other costs related to load boards.
4. Scale Up and Outsource Other Drivers
One way to maximize your returns if you start a business with your cargo van is by upscaling.
You can’t go wrong hiring a part-time driver to handle your deliveries while you focus more on getting repeat business.
You can also expand further by getting a couple of extra vans (even on lease) and hiring other drivers.
Just make sure you charge enough to your clients to make a profit on the difference between what you charge your clients and have to pay the drivers.