I need a little inside help!!

$2.75 is great if you can get 1500 miles a week averaging it. AND your expenses are $1.50 per mile or less. That would be ((2.75-1.50)*1500)=$1875/wk profit !!

But if you can only find an occasional load and you're only getting 400 miles per week it kind of sucks. ((2.75-1.50)*400)=$500/wk. not to mention the more you sit, the more your cost per mile goes up.

Maybe better is to average 2.25/mile and get your cost per mile down to $1.35 by working a little. ((2.25-1.35))*2200)=$1980/wk profit. not as much fun as making 1875 on 1500 miles, but at least you're out there making contacts and moving your business forward if you do things right.

 

How many days do you run out of the week @ 2.75mi. Are you leased onto someone who holds a % of the profits.

KH

 

It is difficult to get $2.75/mile right now. There is plenty of flat bed freight at $1.60-1.70/mile. I. am not suggesting that you haul for those rates. I would not haul those rates myself. There are loads paying over $2/mile. You need to be cautious about where you run. Find a few brokers that you are comfortable with and who have fair rates and see if they can help you find decent paying loads in and out. Until recently, I was able to get $3/mile or better on all loads. It is increasingly difficult to get those rates right now. You need to sit down and find your break even point. Calculate everything that you have spend in the last year on your truck. If you have less than a year as an owner operator, OOIDA has a spreadsheet you can download and use. There should also be a sticky on here that explains all the various costs associated with running a truck. When doing projections, I use a 10,000 mile per month average. It is reasonable when you look at the entire year. In business, if what you are doing is not working, you make adjustments.

I have a friend who is doing very well leasing to another carrier. When you run your own authority or lease to an agent based carrier, you will constantly need to make adjustments to your business plan. Some people do better leased to a carrier than the do running their own authority. I have a friend who is leased to a carrier and he did over $200,000 to the truck last year. He is scheduled to do better this year. In order to survive you may need to adjust your minimum haul rate down to around $2-2.25/mile. I know rates are in that range for most flat bed loads. But, the first think you need to do is find your break even point. Once you know that then you will understand where you need to be when it comes to rates. I just read an article that stated that the national average to break even is now $1.71. That is the average. Everyone will have a different break even point due to where you mostly run and whether you have a new or newer truck with big payments or have equipment that is paid off.

 

For the life of me I can't figure this out though.. 6 years ago I got divorced and was avg.. 2.70 a mile in a dry van (before fuel) sold everything got a company job.. Decided to get back in and the rates were so low.. I just leased on to a company for the last 5 years or so.. It is really depressing fuel cost are double and the rates are about 40 to 80 cpm lower on the same freight I was pulling.. Not sure if it is the brokers taking a larger portion or the super carriers cutting cutting cutting.... I just know it is a hard row to hoe right now.

 

These rates seem to run in cycles. As the economy slows, rates will continue to slide. Fuel is rising and rates are heading downward. I have seen some good rates, but you have to work to find them. This happened in the fourth quarter of 2008. Hopefully, things will start to turn around before they get that bad again. At least there appears to be freight to haul. This is not a good time to go into heavy debt. Once the election is over we should see some stability. If Obama is reelected I expect things to continue to be difficult. Romney could infuse some confidence in the business community which would help the trucking industry.

Part of the problem is uncertainty. Owners get panicky when rates or freight are down so they take anything that they can get on the truck out of fear. They are afraid that if they don't take that cheap load that they won't be able to make their truck payments and they will lose their livelihood. In reality it can be a self fulfilling prophesy. By taking the cheap loads they are helping to suppress rates. As long as shippers and brokers can move their freight at cheaper rates, there is no reason to pay a higher rate.

I have known some owner operators who do better leasing to a carrier than running their own authority. The advantage to leasing to a carrier is that they may have contracts for freight. Some have stable year around rates. They also have a fsc which can help offset spikes in fuel prices. There could be times when you could get better rates away from the carrier, but when business is slow or the economy is down you still receive the same rates which could be higher than some on the open market. Running your own authority doesn't guarantee you will always get better rates than if you leased to a carrier.