Need help with figuring power only rate.

$4500-5000 per 5 days plus fuel

 

He said you start with your costs, costs are a baseline figure every buddies starts with when setting prices.

Every owner should know their costs better than the back of their hand and very few do. Cost per mile, cost per day, cost per week, cost per month. That's the base starting point. Then we look at the specifics of the run we are submitting a bid on.

 

I’m glad you added the rest...cpm is not the only thing that baselines and profits need to be estimated off of. Some o/o’s might make $250k/yr and not put 60,000mi’s on their truck.

Cpm is great for an otr/regional scenario, but hardly works for local work. Daily/Hourly rates can be the best baseline sometimes.

In my operation i look to make X per hour, X per day, & X per week.

Some work may pay better than other work, but it all figures into my bottom line.

Sorry took a sharp left there. I was just glad to see someone mention something other than cpm

 

I rarely mention cost per mile. That's just one part of the cost of running a truck.

I do something similar to what ruthless said. I have a daily number then add x per mile to cover fuel and maintenance. Fuel and maintenance(not just pull changes but every part of maintaining a truck) are the only things that is effected by miles. Insurance, truck payments, workmans comp, all those things are fixed costs. Run 10 miles a month or 10 miles, they stay the same.

 

You have fixed costs and variable costs, I amortize my fixed costs over the number of working days per month (I use 21.6), then work out the variable cost based on the mileage.

One of my runs costs me $668 a day to run the other $572. The mileage changes which affects the variable cost.

Get a solid understanding of your cost centers then you'll be in a position to accurately quote, once you have built in an acceptable profit level.

 

Knowing what it costs is important.

I don’t base my pricing on what it costs me. I base it on what I can get and how often I’m likely to get it.
“What the market will bear”
Don’t let your cost determine how much profit you make.

You can break cost down any number of ways: at the end of the day, if someone will pay you $5,000 to do something you be a #### fool to tell them how you know your numbers and you can do it lots cheaper.


One of my customers was telling me about that today- had a carrier doing a regular run for $2,800, new outfit came calling and my customer told them he gets that lane covered for $2,200.
That carrier knew his costs, and that he could make a profit at $1,900; which was his counter offer.

The race to the bottom continues.

 

Well said. Knowing cost important but going for and knowing what the market will bear just as if not more so. Always be pushing the market up. Do your part, plenty of people racing to the bottom.

 

Very well said. Op heed this advise!

very true. Make (take) what the market will bear. Make as much as you can, without question. You need to know your bottom dollar....You never run for your bottom dollar. I’ll run empty before i take a break even or a squeak out a profit load. I’m not JB Hunt & my business philosophy is not if i earn a dollar a day i’ve turned a profit.

If a customer had told me they get their route covered for $2,200, & $1,900 was my break even. Depending on the route, i say that’s about right....but here’s what else i can offer...

Saying well i can make a profit at $1,900 just tells the customer, next time you’ll go even lower & compete against yourself!

I have turned work away that i later ended up getting because the customer told me my rate was to high. I told him well the other guys doing it are cutting their own throats & you and your customers are the ones who will lose. With in a few weeks the phone rang & i got the work for my rates.

 

Can you explain that a little better for me? I'm kind of slow sometimes... I completely disagree that "trucking isn't making widgets". My main job is making widgets... I'll make you a widget for X. If you want a gadget mounted to the widget, then I'm going to charge you X+y. If you want two gadgets on your widget, I'm going to charge you X+(yx2).

Knowing what my hourly cost is, matters for running the truck, or making the widget. Different things go into them, but they both have real numbers. Why isn't labor cost constant? For the Widget, or the Truck, they are pretty darned close. It takes me an hour to make the Widget... It takes me an hour to drive 48 miles.... (averaged over a couple of years of my normal rural driving). You'll pay X to get the product to you, and I'll give you an hour to unload it. If it takes longer than an hour, you'll pay y for every extra hour.

All I need to know is the Time... that's the only thing you never get more of. Every other cost is based off of that.

As I said, trucking isn't my main job... its what I do for fun. But I don't see how its any different than making widgets...

 

Let me get his number. I’ll do it for $1899.