Should a food business own delivery vans or contract the capacity?
By Muhamed Selmani, Founder
Own the vans when the delivery work is dense, stable and needs your own people on it. Outsource when volume swings, the site list moves, or the van would stand still. The number that decides it is utilisation — how much of a van's paid week is spent moving your goods. Restaurants and multi-site groups should cost a van fully loaded, divide by drops, then price the same round both ways before anyone argues about it.
The question is about utilisation, not ownership
A van is a fixed cost that arrives whole. You buy or lease the whole thing, insure it and employ a driver for a whole week, and none of that shrinks because Tuesday was quiet. Contracted capacity is variable: it turns up on the days you booked and stops costing you money when you stop booking it.
So the question is not whether to own vehicles. It is how much of a van's paid week your own goods occupy. That is utilisation, and two businesses with identical annual volume can reach opposite answers because their volume has a different shape.
Four steps settle it: cost the van properly, measure utilisation, work out the cost per drop in your worst month, then price the round both ways.
Cost the van fully, or the comparison starts wrong
Most in-house costings are too low the same way: they count the vehicle and the fuel and undercount the driver and the cover. A comparison built on that number favours ownership, wrongly.
Then mark each line with one question: would it still be billed in a week with no deliveries? Almost all would; fuel is the honourable exception. That is the shape of an in-house fleet — a large fixed block, a thin variable tail — and contracted capacity inverts it. Neither is better; they suit different volumes.
The lines to count before you compare
- Vehicle: lease or finance payment, or depreciation plus the capital tied up.
- Vehicle excise duty, insurance, and the excess you carry on a claim.
- Servicing, MOT, tyres, and the hire vehicle while yours is off road.
- Fuel or charging, and tolls. The one large line that is truly variable.
- Driver: salary, employer's National Insurance, pension, holiday and sick pay. The biggest number here.
- Cover for absence. One van is really one and a bit drivers, because somebody runs the round when the regular driver cannot.
- Telematics, phone, uniform, training, and the food-safety obligations of carrying your own product.
- Cleaning and pre-use checks, parking, permits, fines, and the overnight bay.
- London charges. The congestion charge applies to every vehicle in the zone during charging hours; ULEZ only to a vehicle that misses the emissions standard.
- Management time: routing, rotas, paperwork, the call at 06:00 when the van will not start.
The insurance line is two lines
Insurance appears once on most fleet spreadsheets and it is at least two things, which is the line a cost comparison gets wrong most often. Public liability answers what happens if your operation injures someone or damages property at a site. It does not cover the value of the goods on the vehicle, and no public liability policy does. Goods in transit is the separate cover that answers what happens to the load.
Ask for both, separately, and for what each covers rather than what it is worth. Then read the carriage terms underneath: the RHA Conditions of Carriage are the standard haulage terms here, Fleetable contracts on RHA Conditions of Carriage 2026, and they cap a carrier's liability by weight rather than value, at £1,300 per tonne. Light, expensive chilled product sits well above that.
Utilisation, measured three ways
Fleet utilisation is quoted as one number and it is at least three. Pick one, write the definition down before measuring, and hold it a quarter.
Then use it to answer one question and not another. Utilisation tells you what your own fixed block costs per drop when volume moves, which is the ownership decision. It does not tell you how many drops a round should carry — that is route density, it is bounded by the delivery window rather than by the vehicle, and it is worth working out after this comparison rather than instead of it.
- Time: hours loaded and moving as a share of hours paid for. The most useful, the hardest to collect.
- Volume: what you carry as a share of what the vehicle holds, on an ordinary day rather than a remembered one.
- Loaded miles: miles with goods aboard as a share of total miles. An out-and-back run to one site shows here — half the mileage earns nothing.
Worked example
What a fixed weekly cost does when the volume falls
Assumptions
- An all-in weekly cost for 1 van and 1 driver of £1,000 ex VAT. An assumed round number to keep the arithmetic legible: not a benchmark, not a measurement. Use your own figure.
- A round running 5 days a week, at 6 drops a day and then at 3.
- This is the fixed-cost question rather than the density one. How many drops a vehicle-day should carry, and where the window stops you adding more, is worked through separately in the route-density piece linked below.
Working
- Full week: 5 days x 6 drops = 30 drops. £1,000 / 30 = £33.33 a drop.
- Thin week: 5 days x 3 drops = 15 drops. £1,000 / 15 = £66.67 a drop.
- Stand the van still on 2 of the 5 days: 3 x 6 = 18 drops. £1,000 / 18 = £55.56 a drop.
- Weekly total in all 3 cases: £1,000 ex VAT.
So: The bill did not move. That is what fixed means, and it is the difference the ownership decision turns on: capacity you stop booking stops billing, so a thin week costs you less in total, while an owned van charges you the same and calls it more per drop. Run this on your quietest month — the gap to your busiest is the risk ownership asks you to hold.
When owning is the right answer
Ownership wins on shape rather than price, and the cases below are common enough that a piece ignoring them would be selling rather than explaining. If two or more are true, buy the van — where a vehicle is genuinely a production asset the test above does not apply at all.
- The work is dense and it does not swing. Same sites, same volume, most weeks of the year, so there is nothing for flex to absorb and you pay a margin for a risk that never arrives.
- The driver does a second job: merchandising, stock rotation, taking the next order, collecting trays. You are buying a person who also delivers, which is hard to subcontract.
- The vehicle is part of the product — livery on the street, a branded van at a customer's door. That is marketing spend on the fleet line, and judged as marketing.
- The work is unattractive to the market: awkward hours, heavy handling, difficult access, a specification priced dearly if anyone quotes.
- You need priority on the worst day of the year: an owned van is capacity you control in the week before Christmas.
- Control of the person matters more than cost: a secure site, a keyholder, the same face each week.
When contracting wins
The contracted case is the mirror image: it is about movement, not size.
- Volume swings by week, season or site, by more than one vehicle's worth.
- The site list moves: openings, closures, a new production kitchen, a trial across London. A route reshapes in a week; a van and a driver do not.
- The round runs 3 days, not 5, and there is no such thing as three-fifths of a van.
- Growth arrives in steps: the second van is a whole van, and it runs half empty until volume catches up.
- Cover is the real problem, not the vehicle. A contracted route carries a named backup; an owned van carries whoever the agency sends.
- The capital has a better job: money in vehicles is money not in a site, a kitchen or stock.
What contracting does not fix
A contracted route still prices a whole vehicle. Fleetable invoices a route at a floor of £95 ex VAT whether it carries one crate or forty, and any serious provider has an equivalent: a van sent to one address costs a van whoever owns it.
What changes is the exit. A contracted route stops when you stop booking it; a van does not, and a used delivery vehicle is rarely worth the business-case number.
The hybrid, and the way it gets built backwards
Plenty of multi-site operations own something and contract something, and the split is usually the wrong way round. Put the flattest, densest work on the asset you own and buy the variable part.
The reverse tends to happen, and it puts the least predictable work on the least flexible asset. It is the cheapest thing here to fix: it costs a decision rather than money.
The test that settles it
This is not a doctrine. It is arithmetic, and you hold the inputs.
Run it in this order
- Pull 12 months of delivery data: drops, sites, days, miles and failures.
- Cost the van fully, from the list above, employer's costs and absence cover in.
- Compute cost per drop for your busiest and quietest months separately, and report both.
- Price the same round with a provider on the same days, with cover inside the price rather than promised beside it.
- Compare across a period long enough to contain a bad week, then run one route in parallel before switching. One real route tells you more than the model.
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