Why oh why are you drivers taking this cheap freight????

I gotcha....

 

I agree with Les. I DH out of Florida up to Nashville all the time. Grab a load from there to Chicago for the same rate as the load I could have gotten in FL but with 1/2 the miles empty now. Just because the wagon's empty doesn't mean you're not making money. You just have to have it figured into the plan.

 

So if deadheading 300 miles for a 500 mile load is better than an 800 mile load paying the same. How do you figure your CPM to determine how much better it is ? Do you figure a different CPM for deadhead vs. loaded ?

 

why did you drive so far past Nashville then? Seems you overshot the mark by about 300 miles or more.

 

You are burning less fuel, but still getting your cmp average.. Is that right?

 

It's not about CPM, it is about gross revenue. If the load going 800 miles loaded pays $1,200 and the load going 500 miles loaded pays $1,200. Wouldn't you rather have the 300 miles empty??? Which means better fuel mileage, and less wear and tear on your truck... I know I would.

Not sure what you mean here, but I take loads to FL from various midwest points and all pay exceptionally well. Freight in FL is dead, or pays much less than I'm willing to haul it for. So i bounce to Nashville (sometimes Atlanta) and grab a load paying the same as the load from FL paid going to Chicago area. I run with 1/2 the miles empty at 10mpg, and the rest loaded. The FL load would have wound up costing me about $100 extra in fuel, so now the load in TN/GA actually pays more.... get where I'm coming from. I base my runs on overall revenue, not CPM formula's and that's how I make good money and better business decisions. In the end, I make more CPM overall once you factor in all your costs such as fuel and other things.

 

I will explain part of it.

A majority of freight in a market is moved under tariff. You can look at the average rates as a ceiling for rates in that market. In general, customers are not willing to accept the risk of moving freight in spot markets at premiums (near, at or above tariff). When because of market conditions rates start to rise near tariff, they will move the freight first to the contract carrier or through channels that have less risk than the spot market.

When a customer has a contract in a market for $1.60 why would they want to pay a premium to move freight in the most risky channel - spot market. If they can't get the contract carrier to cover it they will move it to other channels that represent much less risk.

 

yes, I would rather have the 300 miles empty. But if I figure my expenses at $1.20 on all miles, these two loads compare the same. Same gross, same expense. What I'm saying is if we know it's less fuel, less equipment wear for deadheading, then why not figure our costs lower for deadhead miles and a bit more for loaded miles. This is example is a no brainer, but what if the 800 mile load pays $1200 and the 500 mile load pays $1100, is it still worth it ? I don't care much for guessing or going by my gut. If we know deadheading is cheaper than loaded miles then we need a way to figure it.

 

And just WHERE do those tariffs come from?

 

A tariff is basically the contract between the customer and the carrier.