How much should I pay my o/o

I am a small manufacturer that runs 4 trucks hauling only our product. We have been charging our customers 2.98 per loaded mile for the last sevrral years and haven't had any issues but we don't worry or really know about the profit in our trucking because we have our margins in the manufacturing process. I want to get a O/O to lease on to me long term and help us get and stay caught up but we can't agree on a price that works for both of us.

He is asking for $4.70 per loaded mile.

Here are the details

1. He runs under my athority
2. He pays the cost of his insurance but no cargo ins necessary.
3. All runs have exactly 50% deadhead.
4. He pulls my flatbed
5. He covers all fuel and maintenance of his truck only.
6. Pay Every week for the previous week. 1 week behind
7. Run as much or as little as he wants.
8. Every load starts within 10 miles of his home.
9. The trailer is loaded and strapped when he gets to our yard but he has to help unload and pickup straps (approx1.5 hrs).
10. The cargo is 29,000 lbs on a 53' aluminum trailer.


What is a fair rate to pay him?

 

The distance will vary but 500 each way is average. My trucks do the short day trips.

He won't take a load under 200 miles which is fine but $4.70 is becoming too much unless I raise my price to the customer. Raising freight cost when fuel is this low will cause problems for the sales dept.

 

I looked at what our trucks cost. We pay .44 per mile plus $23.00 for ALL on duty time to the driver and our trucks cost approx $1.49 per mile to operate.
I offered him 1.65 for every mile he puts on the truck and he said he could do better hauling brokered freight.

We negotiated a 3 month deal when I was in a pinch. Now he wants a new contract for a year but I need to be at 1.65 per mile.

Does paying him 1.65 a mile for every hub mile, pulling my trailer give him enough to make a living?