Am I Right On My Cost To Operate

I think that is better. For comparison, here are some rough numbers using publicly traded companies 2014 revenues & profits and current mcs-150 mileages:


Werner/AIT
$2,140,000,000 revenue
$99,000,000 profit
935,000,000 miles
--------
$2.29/mile revenue
$2.18/mile cost
A significant source of Werner's income comes from non-truckload "value added services (brokerage, intermodal, etc)


Knight/Barr-nunn:
$1,100,000,000 revenue
$0,100,000,000 profit
500,000,000 miles
-----------
$2.20 revenue
$2.00 breakeven

Swift/Central:
$4,300,000,000 revenue
$160,000,000 profit
2,100,000,000 miles
-------
$2.05/mile revenue
$1.97/mile breakeven


Covenant/SRT/Star:
$719,000,000 revenue
$018,000,000 profit
360,000,000 miles
-------
$2.00/mile revenue
$1.95/mile breakeven


Heartland/Gordon:
$871,000,000 revenue
$085,000,000 profit
450,000,000 miles
--------
$1.94/mile revenue
$1.75/mile breakeven

Per diem (the standard meal allowance) is a driver expense -- would come out of the driver's $52k salary

 

If the load isn't service sensitive, I don't think most big brokers care whose name is on the door -- the cheapest truck that meets their minimum standards gets the load. Small brokers are probably willing to pay a little more for a known carrier to keep their smaller customer base happy.

For important customers I think brokers prefer the carrier with the best track record and it is easier for an Independent or small carrier can maintain a great service record (not that most do -- I think #### service is the norm in this industry).

On the other hand, large shippers tend to prefer mega carriers. They have a lot of loads to move and while the service probably won't be spectacular, they know what they're going to get with schneider or whoever. Things will go wrong on occassion, but they're working with a company that probably has resourcea to make it right & they aren't going to wonder if their load is going to wind up being held hostage.


As for the $2+ mile revenue/costs of some of those mega carriers --most megas also have brokerages of their own (along with other services) which are adding revenue (and expenses) without adding miles.

If you dig thriugh the 10k, Werner breaks their truckload rates out separately so this:

Werner/AIT
$2,140,000,000 revenue
$99,000,000 profit
935,000,000 miles
--------
$2.29/mile revenue
$2.18/mile cost

becomes this for just truckload:
$1,680,000,000 revenue
$152,000,000 profit
935,000,000 miles
------
$1.80/mi revenue
$1.63/mi breakeven

 

You are forgetting, those revenue numbers are ALL the miles the mega runs. That's after factoring in probably 10 to 15 percent more empty miles. That takes heartlands 1.94 rate up to more like 2.5ish loaded mile.
I live that dy posted those mega carrier numbers. I'm so sick of hearing everyone blame low rates on big companies. it's themom and pop hobby truckers running the cheap freight. Not the big corporate trucking companies.

 

Yes, I should have emphasized this -- the miles are from the carrier's mcs-150 which they self-report every 2 years to the fmcsa. They should be close to "all miles" but they might miles from 1 year and revenue from another...

 

In a perfect world of balance throughout everything.... where everyone had the same break even costs and any time a customer needed a truck, it was available... ...or every time a driver needed a load, there was one to haul. We could all haul that $2 a mile load which was x amount above our break even and no-one would complain, everyone would be happy, we'd all be singing kumbahyah, etc.

In the real world things are always in flux and changing. Sometimes week to week or month to month. Maybe even day to day or hour to hour. You might have too many loads and not enough trucks in the morning and the opposite by afternoon. $2 might move it now but tomorrow you might not find a truck at any price. Or maybe you can have your pick of trucks for a buck a mile. Not to mention no two companies have the same cost to operate - that is all over the place.

Point here is just because you see an average for someone like Werner or Swift where they average $2.05 a mile or whatever they average.. or you see on a load board that it says a lane is averaging $1.85... that does not mean you are going to be moving loads at those numbers one after another day after day.

I for one would be interested to see what these companies actual rate average is. They probably turn around 10% deadhead on average their rates likely around $2.35 a mile give or take which is really lousy but they turn the miles and keep the deadhead low so it works.