Double Yellow's Company Driver to Independent Thread

wore out · Feb 19, 2015

double yellow said: ↑

The engine brake.
Click to expand...

You will have good luck with it. We haven't had any trouble out of their engine brakes. Only done 2 exhaust brakes, they were on one ton's and not from PAC. At any rate I wasn't impressed by them

double yellow · Feb 21, 2015

I started out quoting rates based on mileage (wanting at least $1.60/mile for all miles). Later I switched to quoting based on daily revenue targets (wanting at least $1000/day). Both approaches were deeply flawed, so I've been working on a better way to figure out the minimum rates needed to clear $100,000/year (pretax) while working a more normal 250 days/year. So here's what I've come up with so far:

My Assumptions:

Variable costs:
Maintenance: 25 cpm
Depreciation/replacement costs: 10 cpm
Fuel: ($/gal)/7.5 -- which is 27cpm @ $2/gal and 67cpm @ $5/gal
-----------------------
62-102cpm depending on fuel price

Fixed costs (annual):
Insurance: $8,000
Plates, permits, fees: $6,500
Office Expenses: $4,500
Travel Expenses: $4,000
Misc Supplies: $2,000
-------------------------
$25,000 (or $100/day)

Salary: $100,000 (or $400/day)

Results:

Fuel at $2/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$561.67[/TD]
[TD]$5.62[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$623.33[/TD]
[TD]$3.12[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$685.00[/TD]
[TD]$2.28[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$746.67[/TD]
[TD]$1.87[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$808.33[/TD]
[TD]$1.62[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$870.00[/TD]
[TD]$1.45[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$931.67[/TD]
[TD]$1.33[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$993.33[/TD]
[TD]$1.24[/TD]
[/TR]
[/TABLE]

Fuel at $2.50/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$568.33[/TD]
[TD]$5.68[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$636.67[/TD]
[TD]$3.18[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$705.00[/TD]
[TD]$2.35[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$773.33[/TD]
[TD]$1.93[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$841.67[/TD]
[TD]$1.68[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$910.00[/TD]
[TD]$1.52[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$978.33[/TD]
[TD]$1.40[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,046.67[/TD]
[TD]$1.31[/TD]
[/TR]
[/TABLE]

At $3/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$575.00[/TD]
[TD]$5.75[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$650.00[/TD]
[TD]$3.25[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$725.00[/TD]
[TD]$2.42[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$800.00[/TD]
[TD]$2.00[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$875.00[/TD]
[TD]$1.75[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$950.00[/TD]
[TD]$1.58[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,025.00[/TD]
[TD]$1.46[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,100.00[/TD]
[TD]$1.38[/TD]
[/TR]
[/TABLE]

At $3.50/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$581.67[/TD]
[TD]$5.82[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$663.33[/TD]
[TD]$3.32[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$745.00[/TD]
[TD]$2.48[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$826.67[/TD]
[TD]$2.07[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$908.33[/TD]
[TD]$1.82[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$990.00[/TD]
[TD]$1.65[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,071.67[/TD]
[TD]$1.53[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,153.33[/TD]
[TD]$1.44[/TD]
[/TR]
[/TABLE]

At $4/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$588.33[/TD]
[TD]$5.88[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$676.67[/TD]
[TD]$3.38[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$765.00[/TD]
[TD]$2.55[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$853.33[/TD]
[TD]$2.13[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$941.67[/TD]
[TD]$1.88[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,030.00[/TD]
[TD]$1.72[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,118.33[/TD]
[TD]$1.60[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,206.67[/TD]
[TD]$1.51[/TD]
[/TR]
[/TABLE]

At $4.50/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$595.00[/TD]
[TD]$5.95[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$690.00[/TD]
[TD]$3.45[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$785.00[/TD]
[TD]$2.62[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$880.00[/TD]
[TD]$2.20[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$975.00[/TD]
[TD]$1.95[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,070.00[/TD]
[TD]$1.78[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,165.00[/TD]
[TD]$1.66[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,260.00[/TD]
[TD]$1.58[/TD]
[/TR]
[/TABLE]

At $5/gal:
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$601.67[/TD]
[TD]$6.02[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$703.33[/TD]
[TD]$3.52[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$805.00[/TD]
[TD]$2.68[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$906.67[/TD]
[TD]$2.27[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$1,008.33[/TD]
[TD]$2.02[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,110.00[/TD]
[TD]$1.85[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,211.67[/TD]
[TD]$1.73[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,313.33[/TD]
[TD]$1.64[/TD]
[/TR]
[/TABLE]

It is surprising how "cheap" I could haul if I had long loads with tight timelines, but those charts are flawed in that most folks would rather clear $400/day driving 100 miles instead of 800... So I've decided that I should get time & a half after 8 hours (8 hours = 440 miles @ 55mph). Since $400 at 8 hours/day = $50/hour, I'd want an extra $25/hour after 440 miles like so:

$2/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$561.67[/TD]
[TD]$5.62[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$623.33[/TD]
[TD]$3.12[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$685.00[/TD]
[TD]$2.28[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$746.67[/TD]
[TD]$1.87[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$835.61[/TD]
[TD]$1.67[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$942.73[/TD]
[TD]$1.57[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,049.85[/TD]
[TD]$1.50[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,156.97[/TD]
[TD]$1.45[/TD]
[/TR]
[/TABLE]

$2.50/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$568.33[/TD]
[TD]$5.68[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$636.67[/TD]
[TD]$3.18[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$705.00[/TD]
[TD]$2.35[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$773.33[/TD]
[TD]$1.93[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$868.94[/TD]
[TD]$1.74[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$982.73[/TD]
[TD]$1.64[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,096.52[/TD]
[TD]$1.57[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,210.30[/TD]
[TD]$1.51[/TD]
[/TR]
[/TABLE]

$3/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$575.00[/TD]
[TD]$5.75[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$650.00[/TD]
[TD]$3.25[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$725.00[/TD]
[TD]$2.42[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$800.00[/TD]
[TD]$2.00[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$902.27[/TD]
[TD]$1.80[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,022.73[/TD]
[TD]$1.70[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,143.18[/TD]
[TD]$1.63[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,263.64[/TD]
[TD]$1.58[/TD]
[/TR]
[/TABLE]

$3.50/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$581.67[/TD]
[TD]$5.82[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$663.33[/TD]
[TD]$3.32[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$745.00[/TD]
[TD]$2.48[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$826.67[/TD]
[TD]$2.07[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$935.61[/TD]
[TD]$1.87[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,062.73[/TD]
[TD]$1.77[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,189.85[/TD]
[TD]$1.70[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,316.97[/TD]
[TD]$1.65[/TD]
[/TR]
[/TABLE]

$4/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$588.33[/TD]
[TD]$5.88[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$676.67[/TD]
[TD]$3.38[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$765.00[/TD]
[TD]$2.55[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$853.33[/TD]
[TD]$2.13[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$968.94[/TD]
[TD]$1.94[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,102.73[/TD]
[TD]$1.84[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,236.52[/TD]
[TD]$1.77[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,370.30[/TD]
[TD]$1.71[/TD]
[/TR]
[/TABLE]

$4.50/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$595.00[/TD]
[TD]$5.95[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$690.00[/TD]
[TD]$3.45[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$785.00[/TD]
[TD]$2.62[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$880.00[/TD]
[TD]$2.20[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$1,002.27[/TD]
[TD]$2.00[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,142.73[/TD]
[TD]$1.90[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,283.18[/TD]
[TD]$1.83[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,423.64[/TD]
[TD]$1.78[/TD]
[/TR]
[/TABLE]

$5/gal
[TABLE]
[TR]
[TD]Miles per day:[/TD]
[TD]Rate per day:[/TD]
[TD]Rate per mile:[/TD]
[/TR]
[TR]
[TD]100[/TD]
[TD]$601.67[/TD]
[TD]$6.02[/TD]
[/TR]
[TR]
[TD]200[/TD]
[TD]$703.33[/TD]
[TD]$3.52[/TD]
[/TR]
[TR]
[TD]300[/TD]
[TD]$805.00[/TD]
[TD]$2.68[/TD]
[/TR]
[TR]
[TD]400[/TD]
[TD]$906.67[/TD]
[TD]$2.27[/TD]
[/TR]
[TR]
[TD]500[/TD]
[TD]$1,035.61[/TD]
[TD]$2.07[/TD]
[/TR]
[TR]
[TD]600[/TD]
[TD]$1,182.73[/TD]
[TD]$1.97[/TD]
[/TR]
[TR]
[TD]700[/TD]
[TD]$1,329.85[/TD]
[TD]$1.90[/TD]
[/TR]
[TR]
[TD]800[/TD]
[TD]$1,476.97[/TD]
[TD]$1.85[/TD]
[/TR]
[/TABLE]

So at 800 miles/day, you would actually earn $141,000/year, but you'd sure earn it. Anyway, there are still a number of flaws, but I do think we're getting closer to target...

double yellow · Feb 21, 2015

I created a worksheet with Google sheets that should allow the user to edit in their own variables:

https://docs.google.com/spreadsheets/d/1xlg_aWP8ELBKGt4brlsEpCtJAnFMbg51afvUc7eQJ9I/edit#gid=0

One notable change: I added a time element to this version to compensate for layovers (or what I call mobile-warehousing). It is surprising how rapidly the mileage rate rises when you add excess time to a run...

Jrdude5 · Feb 21, 2015

Truly amazing thread DY lots of valuable information.

ironpony · Feb 21, 2015

Nice analysis, but it smacks a lot of counting your eggs before the hen got busy. The numbers you need are the break-even revenue per day and revenue per mile. Those numbers need to include your operating cost and what you're paying yourself, but most importantly those numbers need to be based on prevailing business conditions.

As long as your revenue and rates are north of those numbers, you're making a profit. That's you're bottom line in all negotiations with brokers.

Skate-Board · Feb 21, 2015

Hey DY. I'll explain if needed but I'm guessing you know.

The more miles you run the more per mile you make in the end. Fixed costs do not go up as miles go up.

dannythetrucker · Feb 21, 2015

DY,

I like where you're going with this. If there is a flaw, I would say it is attempting to convert each load you bid into a "per day" figure. If I get a 100 mile load and deliver the same day, I am then free to go about my business as I see fit. It is not the same commitment as an 800 mile load where I may pick it up early, and deliver at 10 am the following day. I think for the purposes of putting a rate on a load, you just have to consider time an endless ribbon, not cut up into 24 hour chunks.

I have a formula for what I believe is fair compensation for my services. It is $300 base pay, $100 per stop (the pickup is the 1rst stop), and $2 per mile. for one pick, one drop loads comes to.

100 - $7/mile
500 - $3/mile
1000 - $2.50/mile
2000 - $2.25/mile

Do I always get that ? No, but I do think the math works out to how it should be. The math has to work out to how it should be because it accounts for everything you do. $300 for the work you do before and after picking up the load including booking the load, purchasing, compliance, tax and accounting, billing, sales, etc... then time spent and wear and tear, labor, etc... for each stop, and finally for holding the steering wheel. Although we are forced to convert back into $/mile because it is the industry standard, it's an insane standard, implying that everything is free and you only pay when the truck is moving.

ironpony · Feb 21, 2015

But we don't pay our bills by the mile. We have weekly and monthly payments. Knowing the revenue you need to generate each day to be positive at the end of the week or month goes a lot further when monitoring the health of your finances.

While we do need to know rate per mile figures, they're more of a feel good number when it comes to business administration.

Victor_V · Feb 21, 2015

Fact is, brokers and other independents will run you right out of business. So knowing your numbers is crucial. Brokers want to run your truck for as little pay as possible, no matter whether you make money or not. Other truckers may not know (or care) their 'real' numbers, and bid down runs you need.

Right now 'prevailing conditions' have been pretty good, trucks (capacity) vs loads and should resume once we get through winter. The ability to push the numbers and to study the numbers as DY is doing is a great tool. Traditionally, independent truckers simply drive by seat of pants, buy a truck, add hope. The more immersed in his operational numbers, helps DY identify 'sweet spots.'

In the end, optimism is not enough to get through good rates and bad. Or equip an independent to intelligently negotiate directly with a shipper for potentially continuous and repeating work. (Like robbing the same banks over and over. Pretty good if you can get away with it.) Why continually deal with brokers if you can deal direct? Where shippers value service and stability and reliability, DY has a competitive edge to offer over and above brokered freight loaded onto anonymous trucks.

Once DY has the big picture by beating and studying the numbers, it should boil down to some simple rules-of-thumb, like danny says. Smart businesses study their numbers inside and out, like DY is doing, but operate like danny says, by simple benchmarks derived from experience and research.

This is a low-margin business--or not! Gordon ran at 94%, keeping only $6/$100 in revenue. Mike Gerdin's team has taken GTI's 2,000 trucks and knocked over 10 points off Gordon's operating ratio in a year. Broker off freight that doesn't pay well, tighten the operational ship. Seek efficiencies.

Otherwise, DY's $100,000 yearly salary goal is impressive!!

rollin coal · Feb 21, 2015

Throw all of that out the window. Daily and weekly minimum goals are worthless numbers that will screw you up in the big picture. Your smallest picture should be monthly, then quarterly, followed by annual. No-one ever booked a solo truck to run 365 days a year. Not going to happen. There are off days and weeks. Just how it is. That's why they are unimportant numbers. At least imo.

Keep monthly (load by load) detailed accurate tabs and numbers on the lanes you run so you can refer back to that information. You don't need a P&L on every load, worthless meaningless info. This is not really a crystal ball into the future but it does help you keep in line with where you've been, what you've done, and therefore ways in which you can improve in the future. Just based off the info in my ledger I found a way to potentially increase my annual gross revenue by at least $25,000 and maybe more this year.

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