What Rate is considered Cheap Freight?

Discussion in 'Ask An Owner Operator' started by Dice1, Mar 30, 2014.

  1. Dice1

    Dice1 Road Train Member

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    Question for all:

    Which operation is more profitable with fuel cost @ $4/gal?

    Truck #1 car hauler gross wt 80k averages 4 mpg with gross revenue $2.20/mile.

    Truck #2 dry van gross wt 55k averages 9 mpg with gross revenue $1.68/mile.

    Don`t even consider truck #1 will cost $0.10 to $0.20 per mile higher maint. cost along with higher cost and more frequent equipment replacement.
     
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  3. kw600

    kw600 Road Train Member

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    Truck two is more profitable by 1 8 bucks, on a 500 mile run?

    I'd like to include it's about 4am and I didnt use a calculator
     
  4. Licensed to kill

    Licensed to kill Heavy Load Member

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    Truck #1 is more profitable.
    For truck #1 to be getting 4mpg he/she will to be cruising at at least 70 MPH. 10 hours driving at 70mph 700 miles @ $2.20/mile = $1540 gross less fuel $700 ($1/mille) = $840 day net of fuel.
    For truck #2 to be getting 9mpg he/she has to be cruising @ no more than 60mph. 10 hours driving @ 60mph, 600 miles @ $1.68/mile = $1008 gross less fuel $264 ($.44/mile) = $744 day net of fuel.
     
    Tobytob Thanks this.
  5. Dice1

    Dice1 Road Train Member

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    I did not give a speed of either truck but since you are making assumptions you left off insurance is sky high on the car hauler and the maint. alone would make up the difference you posted along with the car hauler has to stop more often to check the load securement that I doubt the mileage per day would be much different.....assumptions.
     
  6. Licensed to kill

    Licensed to kill Heavy Load Member

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    Of course you didn't because it doesn't fit your agenda. Be that as it may, the reality is, most guys claiming <5mpg admit to travelling 70mph+ and most guys hauling 80,000lbs and travelling 60mph are claiming >6 mpg and many >7mpg.

    I didn't include insurance because I have no idea what insurance for a car hauler is and I wasn't going to assume that it is "sky high" whatever that means and didn't include maint because 'A' - your post said "Don`t even consider truck #1 will cost $0.10 to $0.20 per mile higher maint. cost along with higher cost and more frequent equipment replacement" but more importantly 'B' - I think that's BS. You'll also see that I didn't include the thousands of dollars that was invested in truck #2 in an effort to get better than the 7-8mpg others get.
     
  7. rollin coal

    rollin coal Road Train Member

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    Car haulers and bull racks running for $2.20 a mile wouldn't last long. An operation with the potential for a high percentage of deadheading better be getting rates @ or over $3.50 per loaded mile. With about 30% deadhead that will have them close to $2.50 a mile all miles in. 30% is a lot of unladen"lightweight" running. I don't necessarily believe grossing out equipment is harder on it. Trucks were engineered to be loaded. In fact they ride and brake much better fully loaded. A buddy of mine and I were talking about this a few weeks ago. We both run around 30% deadhead miles and rarely have more than 15,000 lbs load in the box. We actually look forward to the 43,000-45,000 lbs loads on occasion as the trucks ride so much smoother.
     
  8. Dice1

    Dice1 Road Train Member

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    I`m sorry I left out a detail to fiqure pick up and deliver the same day with a 450 mile run.
     
  9. Licensed to kill

    Licensed to kill Heavy Load Member

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    Dice1, the point you are trying to make, that being that better fuel economy means more profit is valid in the vast majority of cases (I'm an exception). The problem is that the trucking industry is too varied for a one size fits all in ANYTHING, even something that SEEMS like it should apply across the board like fuel economy. There are always other considerations that have to be taken into account and what works for one operation may not make economic sense for another. I think what you have accomplished in your quest for fuel economy is great and likely pays good dividends for your operation. In my operation it would have the potential to cost me money but my operation is nothing like yours. You don't need to go to great lengths to convince others you are right. Just share what you know and leave it at that. Let others decide for themselves whether or not it works for their operation. Those that can count don't need these truck#1 or truck #2 games. They've done the math a long time ago. Those that have not won't be in business long enough for any of this to matter.
     
  10. camaro68

    camaro68 Medium Load Member

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    I don't have skin in the game, but if you had a 9 mpg truck. It seems like you would want to try to get as many $2.00 + per mile loads as possible. A 9 mpg truck is about the only thing you have working in your favor.
     
  11. Dice1

    Dice1 Road Train Member

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    The point I was trying to make is a cheap rate for 1 operation might be a great rate to another. There is a lot of variables in this industry that need to be considered in a freight rate.
     
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