Rate formula?

I am currently enrolled in a college program. My instructor has many years of experience as an O/O and also as a company safety/compliance director.

On more than one occasion he has stated that the minimum cost to operate a rig is roughly $1.76 per mile.

That is "cost".

As with any business, I would assume at least a 50% return on the cost...which would yield around $2.60 per mile charged to the customer.

I certainly ain't no expert........but that would seem reasonable to me provided "competition" isn't driving prices down.

Like you, I'd like to hear some "experts" chime in on this one.

 

Your friend isn't the elusive atrucker is he?

As for rate formula .. just have to know what market rates are for given lanes. The key is putting together the good paying lanes. If you have enough contacts in a given market then you can really get an accurate idea of what is moving at what rate. A formula for a set amount per mile on each load will never work. The classic example is going westbound for a low rate and eastbound for a high rate. If one were to use the "2.25" or whatever for all miles, customer would surely pay you that going east. When you get to the other end he will not pay you that going west. Best to make as much as you can while you can.

 

The first of the month I was at $2.88/all miles on 48,000 miles my CPM runs $1.40/mi

 

I haul agricultural products in the state of Florida.Most loads are flatbed loaded one way, back empty.Pull shippers trailer. It costs me about $1.60 per hub mile to operate ( ALL EXPENSES), my truck has long been paid for.I average about $ 2.40 a hub mile in revenue, leaving me about 80 cents per mile for my pay. Of that , about a dime a mile is for taxes. I average running 4 days a week year round, home every night.Most days are about 7 hours, busy season 12. Will run about 50,000 miles this year, working 50 weeks.

 

I'm not sure you can even break even at $1.45 if you own the trailer and pay for all insurance, maintenance, etc. You have to figure fuel alone is going to cost .60-.80 per mile depending on where you fuel and if you have discounts.

Im running around $2.26 per mile for all miles this month including miles to go home. I do not understand guys running for less than $2 a mile average. All they have to do is 30 seconds of research to figure out they are leaving a ton of money on the table. I'm not sure about all load boards but ITS has a Past Watch feature that you can sort by rate that was posted. Tell him to at least aim for the lowest posted rate and he'll probably gain .40 a mile!

 

Honestly if I can make 1.60 a mile and I only need to pay bobtail insurance that's not too bad. I average 1.80 a mile this year and that's plenty. She makes the money in the house so whatever I profit goes to a retirement account.

 

Said it since I was a contractor , there is always someone willing to put you to work as long as you are willing to lose money , and more recently friends don't let friends run cheap freight , if enough people figure this out all our wages will slowly get better. ,

 

I've been getting rates up for the last 2 years where I'm at. I can finally say there almost all reasonable

 

The thing most guys don't take into consideration is you don't pick up freight at your house and when you drop you don't reload there so your going to have empty miles and they add up fast that's why $2/mi freight is still cheap in my book it needs to be over $2.25/mi just to average $2/mi to the truck!