Before everyone jumps down my throat let me give a back story.
I am the services manager for a industrial equipment rental company. We ship our equipment all over the United States. I schedule all of our transportation by shopping our loads with few different brokers. Most of our equipment is mounted on 48' flat-beds or step decks and almost all of this equipment is over width and some overweight.(I understand costs of permits and add. load insurance) We average around $400,000 annually in transportation costs. I would say we average moving around 10 loads per month.
I see the invoices we pay after the brokers shop our loads, and always start figuring. Going on info from different sites i see that the avg. cost per mile is around $1.40. When I figure this number plus the costs of permits using an app and compare this cost to the invoices we pay i almost always see around a 25-30% difference in actual cost I figure with the $1.40cpm plus permits.
I know there are other costs such as truck payment, high insurance, additional insurance, taxes, registration. I have done some research on these costs and just think that there has to be something I am missing here. It would be crazy to think that i am paying a broker 30%. I feel that with the 30% i could pay a driver top dollar and still cover costs after initial start-up.I understand if i were to hire a driver he would want to move more than 10 loads per month.(Lets just assume I could find the driver additional loads to move as he wanted)
I guess my question for you experts is am i crazy for looking at this as a possibility to make a little extra money with this. Welcome any thoughts or comments.
Purchasing a truck and hiring a driver??
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Did I read that right? You're paying $1.40/mi for overwidth and overweight flatbed freight?
That just doesn't sound right.
To buy a truck, trailer, get the operating authority, insurance, driver, fuel & maintenance will come out to just about $1.40/mi
Edit: Where are you located?
It would be hard to make any money just pulling a legal size/weight load for $1.40 a mile. I can't see anyone running a permitted load for that. @Rontonio @blairandgretchen How about this.
Let me give an example.
We just moved a load from our shop to Pontiac,MI. 822 miles from our shop.
Here are my equipment specs,
48’6” x 11’2” x 12’
After multiple brokers shopped this load the lowest quote was $3,400(including permits). So we payed $4.14 per mile.
I am comparing the cost of owning maintaining my own truck and paying a driver to move this load with the $1.40 per mile cost. Is this incorrect?
A few thoughts
How much are you going to pay the driver?
$1.40 per mile?
How about the loading and unloading?
$30 an hour?
I have a customer who we (drivers and I) service a customer with large equipment moves. They were billed at $6.50 a mile all inclusive, it was tying up a truck and trailer hours for loading and unloading beyond the move.
Because its your own freight, you have to come up with a pay rate for your driver. If its all os/ow, you're looking at a minimum of 65cpm and be able to have the driver run a minimum of 2200mi/wk. This will get you a good driver. Your insurance alone is going to be atleast $15k for your 1st year. A good truck/trailer is gonna be 50k atleast. We wont even talk about maintenance expenses.
Can you possibly save some $ operating your own equipment and hauling your own freight? Yes. Is there a whole lot of headaches in doing it? Yep.
Again where are you located?
At 10 loads a month, you're either gonna have a driver sitting, or you'll have a truck on the road and a load that needs to go out and no truck to put it on. That causes operating costs to go up.
Let me show how I am looking at this cost and breaking it down.
Load going to Pontiac, MI is 822mi from our shop
Total mileage there and back is 1,644 miles
We required a power only. our equipment is mounted on 48' flatbed
1,644mi / 5GPM = 328.8 total gallons needed to make the trip
328.8 gallons x $3(price per gallon) = $986.4 for fuel
This load would need permits to travel thru 7 different states.
1644mi / 60minutes = 27.4 hours of drive time. (lets round it up to 30)
30hrs x $30.00 per hour = $900.00 Drivers Pay
Ill just guess and will figure around .30 cents a mile
.30 x 1644mi = $493.2
I come up with actual cost of $2,843.6 this load going to Pontiac
I paid a broker $3,400 to haul this load. (Probably should not have used this load as an example it is pretty competitive)
I see the $556.4 price difference from what i am figuring as actual cost.
Am i figuring this pricing correctly?
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