negotiating rates

Discussion in 'Freight Broker Forum' started by 100%Gofio, Sep 14, 2017.

  1. 100%Gofio

    100%Gofio Light Load Member

    Aug 3, 2017
    just wondering how some of you all accept or deny or counter a load offer.. The situation would be, someone calls you to offer a load out of some where at X total amount, might give you the total miles, weight and commodity. i assume at that moment you have to decide what to do but what if you are driving or away from a computer. can you tell them you would call back later? other wise at that very moment how can you know if thats a good # for that lane, if the destination is a dead hole or if you gonna have to go thru tolls or have to pay the shipper something at the door to unload/load. all this from a noob start point, someone w/o much experience. do you just come up with a minimum per mile rate and dont consider nothing below that? but if you say minimum Z/mile they might agree but you might have shot yourself in the foot if there was more money than that...
    Oldironfan Thanks this.
  2. x1Heavy

    x1Heavy Road Train Member

    Mar 5, 2016
    White County, Arkansas
    I actually negotiated a truckload once. The broker on the other end of the phone knew I was a total nooblet ready for the loot and pillage.

    First came the overall miles. Then the amount, then where the truck is to load, and then the fuel then then then then. The final amount when 10 minutes have gone by was about 5200 dollars from Fairbanks AK to Arkansas.

    Something like 3850 miles or 1.35 a mile total. The value of the contents that was to be hauled was half that retail right here in the Rock. I declined his offer.

    It's lucky I did before I got any further. They were really how do I put it.. sunshine on that phone overjoyed that this rube is about to hand over some serious cash for a nice little haul. If that is what the brokers do when they talk on the phone to everyone, I would consider it a form of rapage... to use a rough word.]

    Almost like a finanical war. Get the mostest first for least.
    TallJoe Thanks this.
  3. Wooly Rhino

    Wooly Rhino Road Train Member

    Jul 6, 2008
    Liberty, Missouri
    Economics 101.

    (Fixed Cost plus Variable Cost) / miles = cost per mile. This becomes your bottom line. Never go below that.

    Once you have your cost per mile, you multiply that number by the percent of profit you wish to make and add that to your cost per mile. This becomes your target goal for all miles to and from your destination.

    Example. I am in Alliance, OH right now. My fixed cost are higher then normal because I was not a very good truck driver to start and have damaged trucks before. My insurance cost are above $3000 per month. My truck is new and leases for $2800 a month. I have added apu, satellite dish, and many other comforts. I get 6.9 mpg due to fact I can't seem to slow down. The good point is that I work all the time and put plenty of miles in. I also avoid toll roads as much as possible.

    I will not haul for less then $1.47 per mile. Because I shoot for higher my Target price is 2.25 per mile. I have DAT and Truckstop as load boards. I am clear to work with 30 different companies. I have access to their load boards. Because I do not go home, I am free to go where the money is.

    So, one of the very best brokers calls me and offers me a load that picks up near here. We have worked together enough that we trust each other. He tells me what town in Ohio it picks up in and where in Wyoming it is going. Wyoming is hard to get out of so the price goes up. He figures he can get it to me for a certain amount. I stop the truck and go to the DAT board and use the market tool to find the market rate for the past 15 days. The rate he first quoted to me was above the market rate. So I added another 15% to the quote and was accepted. Both the broker and I closed the deal feeling good about it. If I have to return empty, which I won't I still am at a profit for the trip.

    Because, I refuse to haul loads below a certain price I am never put in a place where they are offered to me.

    Example of that. In Denver last week. Everything I was seeing was 1.08 per mile coming back East. I find a load that is going to where I want to go posted. I bid 900 for the load. It looks like I am going to get it but someone bids 500. Okay, fine let them do it. Later, I get a call from the broker who says they have a problem with the 500 bid as the man has broken down. Can I help. Of course. I am still a bit angry at the under bid so now my price is $1500. I get the load. The broker is happy and I am happy. The only one not happy is the driver who undercut and wants to haul cheap. He is sitting and wondering where he is going to get money to fix his trailer.

    End of lecture
    bewhite90, lockNload, Tug Toy and 6 others Thank this.
  4. 100%Gofio

    100%Gofio Light Load Member

    Aug 3, 2017
    i understand and you speak based on a lot of experience and lane knowledge but you did say that you pull the truck over and check the DAT 15-day rate history while the broker is on the phone, that more in line of an answer i was looking for. i do know my break even and the driving of us is the same, always on the road going where ever the money is
    x1Heavy Thanks this.
  5. Wooly Rhino

    Wooly Rhino Road Train Member

    Jul 6, 2008
    Liberty, Missouri
    You NEED to figure you break even point. Without that you cannot be sure how much money you need to pay your bills.

    Okay. As to DAT let me pick a random City. Memphis, TN, Today;s rates. Using Landstar postings as your broker. You have three choices. TX. NY or KS. The TX load is going to San Antonio. Dat shows rate at $2.62 per mile for 725 miles. Right at $1900 for the run. You are going to have to sit for the weekend. Because the load most likely delivers on Monday. NY load goes to Schenectady $2.50 for 1185 miles or $2965. You have to pay tolls to get there so that lowers your profit and fuel is more expensive in the Northeast so that also lowers your profit. Last is Olathe, KS. It is 2.28 per mile for 460 miles or around $1050.Shortest run. Still over $1000 for the day. Still you might be stuck sitting over the weekend. So you have to check on getting out of there.

    You check and see that RFX has a load going to San Antonio for $2.47 per mile, 812 miles or $2005. You are in San Antonio on Money but have been paid twice for $3055 instead of $1900 for the first load.

    That is the basics of how it is done. Once you get an idea of the pay on the lane you can do it without pulling over.
    Last edited by a moderator: Sep 15, 2017
    misterG, nax, 100%Gofio and 1 other person Thank this.
  6. nax

    nax Road Train Member

    Dec 14, 2016
    @Wooly Rhino ...

    U have so much juice, u should change your name to "Juicy Fruit"
  7. BoyWander

    BoyWander Road Train Member

    Jul 22, 2011
    You have to know the markets. I don't really look at those averages except for certain circumstances. If it's posted for a rate that is somewhere around the average, I know they ain't serious about moving it. Depending on the time of day. If it's 9-10am, I keep a mental note of it. If it's 1pm and it's the same, they don't have to move it.

    My goals during a conversation change throughout the week. I try to strategize by location. Where am I on Monday, where do I want to end up on Friday morning, how do I get there and what kind of revenue do I want/need to have by Friday. Then I go about implementing that plan. Right now, $5000+ revenue is where I'd ideally like to be at on Friday morning in a good market. There's always improvisation too when something comes up that changes my plan, like a good paying load going somewhere else. So my negotiating depends on what my plan is and what my current situation is. I try to get the max that lane will normally allow on a regular basis and set that as my expectations, but always looking for better.

    You have to study lanes and markets. Have to.
    slow.rider Thanks this.
  8. Mattflat362

    Mattflat362 Road Train Member

    Feb 18, 2015
    Avon Lake, Ohio
    love it man....
    exracer941 Thanks this.
  9. boredsocial

    boredsocial Road Train Member

    Apr 13, 2014
    Louisville, KY
    This guy gets it. He won't be in a truck forever. BoyWander you really should keep an eye out for an opportunity to make the jump onto the trucking company owner career path. Or look into becoming a freight broker. I suspect you'd do well at it.
    BoyWander Thanks this.
  10. spyder7723

    spyder7723 Road Train Member

    Mar 31, 2013
    sarasota, fl
    99 times out of 100 of you pull over to research the lane the load will be gone. You have to be immediately ready to counter offer with your acceptable rate and pull the trigger.
    BoyWander Thanks this.
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