Sitting cost per mile.

Sitting is a cost of doing business. Companies from 1 truck to 4000 trucks do it. That time is factored in to your overall costs. It's one of the reasons maximizing your revenue is so important. It's also why realistic mileage numbers are usually around 2500 for a week out.

Also, sometimes you gamble and lose when sitting. I've won some and lost some when it comes to waiting for a better rate. Your experience and the area your in dictates whether you take the $1.75 load or you wait for $3. The strategy that works on Wednesday might not work Monday or Friday, or maybe it only works at the end of the month in that area. Personally, I wouldn't wait 5 days for .25 per mile unless I'm sitting at the house doing other things.

Just as an example, I have a friend that used to work here and was all bout keeping the wheels turning, no matter the rate. She always grossed more than me by 10-20 grand, but I ALWAYS netted more for a lot less miles.

 

I wouldn't wait no where except home for five days, unless Jesus told me he was meeting me there after waiting five days

 

I would have to disagree, if sitting cost NOTHING, then you could do it for months with no adverse consequences, which we know is not possible.

If you have to sit while under a load, due to a shipper/receiver problem, then that should be worth $350 a day for your time and aggrevation, unfortunately there is no way you can get anything waiting on a load, but I feel that the longer you wait the more it has diluted the revenue per mile of the load.

 

I look at it like this. In monthly segments. In two weeks time I can normally cover all truck and household expenses. The next two weeks are profit to the truck. I get plenty of time sitting at home and that costs me nothing because I have a life and am going to sit at home from time to time. I will also think nothing of losing 3 or 4 days in a months time when I'm 500-1000 miles away from home. Now if nothing comes up after losing one day it's time to deadhead. That's how I do things. I keep my average rate up by doing it this way. Trucking is what it is and I think some of you overanalyze waiting time. At the end of the month my average rate is what concerns me, less miles, more money, equals less wear and tear on the truck. As long as I hit certain goals all is good. The thing is you are going to lose a day here and there from time to time. Nothing you can do about that. I don't think that is any excuse to take something for cheaper just to keep moving. No thanks...

 

It all depends on what "cheap" is to you. For a guy who has to feed a truck that runs $2 per mile, $1.50 per mile freight is cheap. But a guy whose costs are say $1 per mile looks at it as a profitable load. Depends on the view.

Take your monthly fixed costs, divide by the number of days. You now have a number that represents your fixed costs per day.

Required revenue = (Number of days on load x fixed costs per day) + (miles x variable cost per mile)

Pretty simple. Just plug in the numbers you know, and figure out the rest. Make sure your cost per mile figures include paying yourself. The thing to remember when waiting for a reasonable rate is that every day you sit, those fixed costs pile up and must be paid for on that load you're waiting on.

 

I would calculate sitting costs at an hourly rate. What do you pay yourself per hour? That number ($50 would be my minimum per hour if I were to go o/o) times number of hours.

 

In a sense, yes and no. The problem with these 'cheaper than normal' truckers is that they're not accounting for the big picture. What will they do when they need to buy a new trailer or truck? They're not setting aside money for it. They may be rehabbing the same truck and trailer but eventually a truck or trailer is no longer worth repairing.

I have a truck paid off and am buying a used trailer. I still factor my rate as if I was still buying a truck. I have to. I want to be able to replace my truck when the time comes or get the overhaul I'll need eventually and not want to have to scrape the money together or out of my profit.

Plus, you just never know. That set of 8 drive tires you just saved up and put on your truck are great until you run over a piece of metal in the road that you never saw. Now you've just nickel and dimed yourself enough and now suddenly you're out another grand for two more tires you didn't expect to need.

You have to have a cushion there.

 

It's called a maintenance escrow. I put it in at 14 cpm.

 

Without a doubt. A tire fund, replacement truck or inframe fund, etc... all that has to be provided for in whatever rate floats your boat. If you're just bringing in enough to pay yourself and cover fuel, you'll be out of business - probably sooner rather than later.

OTOH, accepting a load at a discount to get in the door, the odd load to help cover the fixed costs and fuel - is something completely different than a steady diet of loads that don't cover your costs.

 

Sit if you want, move if you want. Everyone's operation is different. I have target numbers I shoot for in a month so depending on where I stand in the month will determine what can be done. Sitting for a day or two in a good area may work if the rates aren't what they should be for that area or lane. Sitting for days in a dead area expecting $3/mile might not be the wisest solution. It goes without saying, know the area you are going into before you go and before you quote that rate going in there. Understand what kind of rates you'll most likely encounter before going so you can build that perceived loss into your rate going out there.
I don't just go anywhere unless the money is insane. If a broker or customer calls about a lane I am not 100% familiar with I say I'll get back to them before pricing it. With fuel getting higher you really have to be cautious not to get trapped somewhere.