Average per mile

Discussion in 'Questions To Truckers From The General Public' started by NotATrucker, Jul 30, 2008.

  1. InMyDreams

    InMyDreams Light Load Member

    211
    69
    Jul 25, 2008
    Kingston, Wa
    0
    dunno if this will help or not ... but i work in the wholesale import business right now. i use TL & LTL (truckload/less-than-truckload) carriers every day. depending on what you need hauled and how much of it you have, you can do a few things: for lots of little things (like little shelves that stick on the wall) us UPS - it's cheaper than anything else i promise ... and you can get their software tied right into your warehouse; for bigger things, look at FedEx LTL; for truckloads/container loads/warehousing, talk to NYK Logistics, if you're into the green thing, there's a company called EA Logistics and they'll help you out too (very competetive). if you can tell me what you're hauling specifically, i can help you out better.

    that being said, i know everyone has their best intentions at heart, but i would think about who you are asking for what: you are on a truckers forum asking them their rates. market COULD (not saying that it is) be .90 - 1.50/mile + fuel surcharge. but, if it were me, i would look at all of the big carriers and see what their owner-operator (o/o) rates are and use those as a baseline - like the bare minimum that i would consider paying someone.

    that being said, you've still got a business to run (and this won't be very popular, i know) and you have to realize that if freight is slow, you can probably find someone who needs the money who will do it for less. BUT ... there's no guarantee about what kind of a job they'd do ... or if they're reputable, etc. sometimes you gotta pay for the good ####.

    hope this all makes sense and i wish you the best.
     
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  3. passingtrucker

    passingtrucker Light Load Member

    170
    92
    Nov 16, 2007
    Diamond Bar, California
    0
    A lot of O/Os are going to hate me for this, but oh well, NAFTA had already killed OTR, as far as I'm concerned. Generally speaking, a company with 100 trucks & drivers will not offer you a competitive rate as a giant carrier like JB Hunt, Shneider, Swift, etc... with over 1,000 trucks & drivers, and 4 times this number in trailers. Giant carriers qualify for volume discount in tires, fuel, tractor and trailer purchases, etc.... They buy in such huge volume that they easily qualify for equal or better discount from manufacturers, than what a wholesaler would get. This volume discount in fuel & supplies equals lower operation cost, which mean they can offer you lower rates than small and medium sized fleets. However, to qualify for these discount rates, these giant carriers will require you to commit sending a minimum number of truckloads a week.

    JB, Schneider, and Swift has the advantage of lowering their operation cost even further, by sending the trailer on piggyback railroad. JB is part owner of BNSF (Burlington Northern Santa Fe) railroad. If you have a lot of full truckloads to send out, I'd talk to one of the giant carriers. These small and medium sized carriers have higher operation cost, which means higher rates.

    The heavier the load, the more fuel and equipment wear-n-tear that a tractor trailer will sustain. A full truckload often weighs 40,000 to 46,000 pounds (hooked to a conventional with a sleeper berth). When I was OTR, pulling a 53-foot van trailer, I could carry between 46,000 to 47,000 payload, and my gross weight (with ¾ tanks, or 150 gallons of fuel) was between 78,800 to 79,900 pounds; 80,000 is the maximum allowable by federal law. Some states allow more wieght, but you need to have more axles to reduce the pounds-per-square-inch pressure between the tires and the pavement. More weight means the tires will wear out sooner, the truck will burn more fuel, and depending on terrain, the truck travels slower when it goes through a series of hills or mountains. Going up a steep grade, the truck burns more fuel while travelling 30 to 40 mph; then coming
    down the grade, he's wearing out his brakes sooner. With the heavy weight, he can only do the posted speed limit for trucks going downgrade (25 to 40 mph) to keep the brakes from overheating.

    Because the truck travels slower, driver fatigue sets in, and the driver has to stop and rest to regain his alertness. He's making less $$ because he's covering less miles, than what he'd cover if it were not for the steep grades, and he's doing a steady 60 mph or faster. Because a giant carrier qualifies for wholesale and volume discount on fuel, parts, & supplies; a giant carrier's overall per-mile cost is lower than a small or medium sized carrier.


    Just the opposite; giant carriers qualify for self-insurance status. The insurance companies that insure giant carriers are subsidiaries of the carrier's parent company. Money they pay in insurance premiums goes back to the parent company (minus administration cost), which is either the trucking company itself, or a much larger company that owns both, the trucking company and the insurance company. In contrast, O/Os shell out insurance premiums to an outside company. Currently, companies do business with O/Os out of pity and compassion for the American truckers, and the fact that all carriers don't have enough drivers to handle this country's freight demand.

    The federal government had passed NAFTA to allow Mexican domiciled trucking companies full access into the American market. If you're concerned with getting the cheapest freight deal, I'd go with either the giant carriers, or one of these cheap Mexican trucking companies.

    If diesel were $4.40 per gallon, at 6 miles per gallon average, that's 74¢ per mile on fuel cost alone. As in any business, trucking is comprised of fixed cost and variable cost. Fuel, the driver's per-mile pay, and wear-n-tear on the equipment are all variable cost.

    Preventive maintenance schedule, insurance, legal documentations, hiring a bookkeeper and/or accountant, parts, unexpected repairs such as tire blowouts and road service, truck payments, and equipment depreciation are all fixed cost. Most O/Os have little or no formal training in business accounting. When they give a rate to offer trucking service, they neglect to factor depreciation cost and setting aside $$ for unexpected repairs.

    I'm in California, where most O/Os are Hispanics, who never excelled beyond a 5th grade education in Mexico. These Latino truckers are notorious for driving aging tractors, but they get by with keeping their maintenance cost down. They call on their fellow hermano truckers & mechanics to show them how to do their own maintenance. This is where American truckers are inferior to Hispanic O/Os, Latino immigrant truckers are willing to do their own repair & maintenance to keep their operation cost down. In contrast, American O/Os feel truck maintenance & mechanic work is beneath them, and would rather pay the extra $$ to delegate maintenance to a truck shop, who charges $75 to $100 per hour on labor alone.

    If you're concerned with getting the cheapest rate, with no regard to the morality of your decision, Hispanic O/Os would be the way to go. When you do business with Hispanics, (or hire illegal aliens) 20 to 40 percent of $$$ they earn are sent to love ones in Mexico (or further south). This is $$$ that should have gone back into the US economy, had you hired an American, or gave your business to an American trucker. The passage of NAFTA is indicative of the government's support to allow $$$ to leave this country, and into the hands of Mexico. The $$$ leaving the US economy due to the significant presence of illegal aliens are a contributing factor to the economic recession we're experiencing.

    With the instability of diesel fuel, most smart O/Os and trucking companies will charge a diesel surcharge, on top of their stipulated rates. The diesel surcharge may be adjusted according to prevailing diesel fuel cost. Hispanic O/Os will neglect to stipulate a diesel surcharge when they offer a contract. I've completed business management and managerial accounting classes, so I fully understand that profit & productivity takes precedence to moral decisions in business. With today's competitive global market economy, making moral decisions at the cost of profit can put you out of business.

    Except for some states in the east coast, 53-foot van and reefer (refrigerated) van trailers are allowed in most states. There are 57-foot vans used by manufacturers hauling high-volume, lightweight products (empty plastic bottles, empty 55-gallon drums, retail shoes, clothing, etc...), but these extended vans have to be pulled by short wheelbase day cab tractors, so as not to exceed the maximum 65-foot vehicle length limit.

    When you buy a truck and hire a driver, you carry the liability risk of damages when the driver gets into a chargeable accident. This is why companies prefer to do business with carriers; you can pressure the trucker to drive beyond his safe limits to get the most value for your money. If the driver falls asleep, and the load is destroyed, you pad your claim. If the load was worth $20,000 wholesale, you can claim $40,000 (or more), the MSRP (manufacturer's suggested retail price) of the load. Padding (exagerating) an insurance claim is standard practice when a truck gets into an accident, and the load is destroyed. This is the incentive as to why shippers want overnight delivery; they're hoping the driver falls asleep behind the wheel (which is why I no longer do OTR, but most of these other guys are too slow to figure this out).

    So long as you confirm to make sure their commercial carrier insurance is valid, Federal laws gives you plenty of rights when you deal with a common carrier. If the consignee makes exceptions on the manifest, such as shortages & damages, you can deduct these from the carriers freight charge. If his bill was $1,000 for services rendered, but the consignee noted $1,200 worth of damaged or short cases, then the trucking service is free, and the carrier owes you $200. Commercial code laws and motor carrier laws gives you plenty of leverage as a customer doing business with a common carrier.
     
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