How to bid and value freight

On the broker side, many (at least at my company) base their rates off what's been paid in the past on a similar lane. Obviously, market rates can change drastically throughout the year, but once a company has been around long enough, it's easy to base rates off this. For instance, if the average on a certain lane was $2/mile at this time of the year, you certainly wouldn't take the truck $1.25/mile. So basically, the best a broker can do is an educated guess.

 

Here is an infographic from DAT and posted on www.tbsfactoring.com/common-cents. This is a national average of the cost of operating a truck. Keep this in mind when booking loads.

 

Of course they would show the driver being fat!

 

I wish my fuel only cost .54cpm, and they forgot about profit for the business, imagine that.

 

This is a crock!

54cpm for fuel, no way. Even with cheapest fuel, average at 6.5mpg, it's still 60cpm and that doesn't even include IFTA. I would say 65cpm.
Add 11cpm.


Tolls permits, license, ok well they didn't add in the sales tax on the truck/trailer purchase, which in MI is 6%. Add $9,000 / 5 years =
another 2 cpm.

And they didn't add income/corporate taxes, taxes on payroll, etc. That driver you pay $.36/mi for, you're really paying about $.45/mi for with payroll taxes, workman's comp, and that doesn't even include if they offer healthcare benefits.
Add another 10cpm.

And like someone above mentioned, that still doesn't leave any room for profit.

So I think that $1.60/mi is more accurate than $1.38. You can take the 4cpm away for the coffee, and another 2cpm for tires, and then take the other penny and add that to "miscellaneous".

Are you a large company and need to pay dispatchers etc? Add more to the cost.
Rent on buildings, phones, computers, yards, shops, etc etc etc.

 

Yeah that is a joke of a break down, consider the source....

 

I think a one truck operation needs $1.00 per mile to cover everything except for the driver's wage and fuel. This dollar per mile includes a moderate profit for the business, it includes accounting, office help and management, etc., etc.

Right now if one were to average 6 miles per gallon as I do (my truck actually gets 6.5 mpg but when figuring fluctuating costs such as fuel, it's better to round the number down to give a little cushion), that comes out to $.70 per mile for fuel.

For one to be self-employed with their own authority (such as myself), I wouldn't dream of running my truck for a $.36 per mile wage (I would prefer to drive somebody else's truck for that wage and receive health insurance benefits on top of that). I personally strive to earn at least double that much or more. Who is going to pay for my family's health insurance? Sorry, but $.36 per mile wouldn't cut it.

My calculations comes out to about $2.40 per mile (slow easy miles with no big driver mistakes) if one is really in it for the long haul and plans to be in business for awhile. Granted, a large company can operate much cheaper than this; however, I'm talking about an independent such as myself (nobody to hold my hand like most owner/operators have the luxury of).

If I was as crazy (and foolish) as the Common Cents chart suggests (to plan one's livelihood on having to haul freight 150,000 miles per year is ridiculous! A 100,000 mile per year budget to make ends meet is way more reasonable - any extra miles would then be a bonus for working hard), then maybe I could just barely squeak by at $1.38 per mile. It's called charity trucking (I would be losing money and be out of business in several years). If even possible, it would be extremely tight though and the coffee wouldn't be in the budget (nor would health insurance among a lot of other things such as virgin tires, regular maintenance, etc., etc.).
Anybody with half a brain wouldn't put coffee in a serious trucking budget! It must have been a joke.

One point of becoming an independent was to avoid having to run 3,000 miles every week with no reprieve.

One thing that really bugs me is when somebody suggests to haul a cheap load to pay for fuel. I can't tell you how much this bothers me!

Sorry, my truck goes home empty before I work to pay for fuel!

Gentlemanfarmer - If you are trucking for $1.38 per mile, farming must be really bad! Or,does farming pay for the trucking so you can get away from the wife?

Seriously, some people love to go up and down the road in a big rig just for the sake of it. I like trucking, but not that much!

 

Yeah, what he said.

JB called us recently ad tried to get us to go out on OUR OWN AUTHORITY for $1.70 a mile, (and that INCLUDED THE FUEL SURCHARGE, but was insisting that they chain dispatch us as if we were a hired driver!

All the risk to the authority, responsibility for load and vehicle insurance, vehicle maintenance and everything else?

We strung him along for a couple weeks before hitting him with $2.50 per mile.

He acted as if even asking $2 per mile was an insult!

 

Markevonnie:

Apparently you misunderstood the Common Cents chart. What is displays and takes into consideration are all factors required to operate a truck. Your operational costs may be lower, some higher. For example my operational costs, the amount of money it takes per mile to just run the truck and cover my fuel, insurance, maintenance, etc is $1.24 per mile. Will I run for $1.24 per mile, not on your life. Neither will I haul for $1.38. I strive for $2.00 per mile and usually get that or better. And yes I am an owner/operator with my own authority.

I too am frustrated that many owner operators will take extremely cheap freight just to keep moving. If we keep turning this stuff down and loads don't get delivered, maybe, just maybe, the rates would go up a tad. But then again, there are companies like Prime, England, Stevens, and such that will haul for $.50 per mile just to get out of Florida.

I was once again offered loads out of Florida today for $1.15 per mile and $1.41 per mile. One of those was out of Jacksonville where I normally get $2.50 per mile for they type of load described. But some #### fool will take it at the stated rate and lose their ### without even knowing it.

What it boils down to is knowing all of your costs. If you want to put coffee in your budget, then by all means do so. Most operators don't know their costs and I have a hard time talking numbers with them. I know how much revenue I have to generate per week and if I can do that with one load so much the better.

 

I just signed up with and talked to Coyote yesterday and they act as if $1.60 per mile was rolling in the cash!?!?!?!