How much does it cost a shipper to run their own equipment?

$3.01-$3.50

 

My private chemical fleet was in the mid $3.50 per hub mile on chemicals because we did everything absolutely correct. This is why Shell, Texaco and several other refiners no longer have a fleet, big money.

This is why a common carrier pays so cheap. He tries to build and maintain a professional structure for profit and there is not enough revenue.......well he's going to make his profit and things like trucks and fuel cost what they cost so the drivers wages suffer.

But here, consider this: A private fleet was too expensive for Kmart and Target, no way but Sam Walton said yes, I need it and Walmart vaulted way out in front of their competition never looking back. How?
Because he used his private fleet to pick up and deliver his goods and put it where he needed it now. Full control and full shelves and a happy consumer who gladly came back.

One of the great business lessons of all time.

 

I work for a 600+/- truck private fleet and its a success for just the above reason although we still have more work than we can do. They're so stringent in their hiring standards that hiring cannot match growth so we still rely on outside carriers some but the end goal is all our product / raw materials on our own fleet.

We just had this cost discussion at our biannual drivers meeting last week. I won't quote the number publicly but for a 3 year old or less very well maintained fleet it's way less than the 3-3.50 numbers quoted above. Good and consistent maintenance goes a long way towards keeping that number down.

 

The answer is 25-40 cents per mile.
It probably cost them nothing for it to sit because there big operations allows them to be self insured, or gets big breaks, and everything else is a tax wright off

 

Either my sarcasim meter isnt working, or you have never owned a business, and my meter is usually pretty good.

 

There are many variables when it comes to operating costs in this business. For instance, with a private fleet they might have lower operating costs when it comes to insurance if they self insure. Their operating costs could be offset by hauling brokered freight when not hauling their own freight. Fixed costs go on whether the equipment is sitting or running. I would think that most private fleets would have higher operating costs than a common carrier. The main reason is due to their availability of freight options. With a private fleet, the shipper may need his equipment to be at a certain destination on a certain date. If they cannot find freight to pay some of their operating costs to reposition their equipment, they will need to deadhead and that will raise their operating costs. I don't know if Walmart saves money using their own fleet or not. I remember reading somewhere that the main reason Walmart created their own fleet was because they could not find enough trucks to service their needs using common carriers.

 

I believe many shippers make more money reinvesting their profits back into expanding their core business. Trucking is a relatively low margin industry. Large carriers may only profit a few cents per mile in an industry that they are supposedly experts at or worse many lose money. public corporations are more concerned with operating ratios and margins than owning anything or employing anyone. That is how Mexico and China are stealing American and Canadian jobs.