Kilometre Allowance
A kilometre allowance is a cost component used in trucking and inland haulage to calculate charges based on the total distance travelled. It reflects the operating costs incurred by transport providers as vehicles move cargo between pickup and delivery points. These costs typically include fuel usage, vehicle wear and tear, driver time, and maintenance. The longer the distance covered, the higher the allowance applied.
In inland logistics, kilometre allowance helps create a transparent pricing structure for road transport. Rates are usually calculated per kilometre and may vary depending on road conditions, vehicle type, cargo weight, and route complexity. This approach ensures transport costs are aligned with actual distance travelled rather than flat or estimated charges. It also helps logistics teams forecast inland transport expenses more accurately.
Kilometre allowance is especially important for long-haul and cross-border trucking movements. It allows carriers to price services fairly while giving shippers clarity on how transport costs are built. When distances change due to rerouting or detours, the allowance may be adjusted accordingly. Clear distance-based costing supports better planning and cost control.
Frequently Asked Questions about Kilometre Allowance
Clear answers to the most common questions people have when learning about Kilometre Allowance.
It ensures transport charges reflect the actual distance covered, accounting for fuel, time, and vehicle operating costs.
Yes. Larger or specialized vehicles may have higher per-kilometer rates due to increased fuel consumption and maintenance needs.
It is commonly used for road transport, especially long-distance or dedicated trucking movements, though some routes may also include fixed charges.