SCHNEIDER CHOICE PROGRAM - FREEDOM AWAITS " YOU " by JAR-HEAD

Those numbers are not high side numbers that looks like exactly what I would do coming out of the house in Indiana. Go east do 2 loads for good money then head back go thru the house del monday and start again. So if you think he showing the best numbers,he's not, he is showing you good but very doable numbers.

 

Jar-Head another question: Do they have a flatbed choice option and if so can you pull your own trailer ? ok two questions

 

I think hourly ends up being a little unrealistic, just because it doesn't fit the way trucking usually works. I think daily, converted from a monthly cost, ends up working a lot better and is a lot more accurate than those guys who only use cpm.


I'm going to throw this out there, just because it seems like it's the best opportunity to get a reaction to it. Sorry if it comes across as a hijack, but I think it fits the discussion well.

I'll also add that I am not an O/O. I have been very close on several occasions, but always got a good job opportunity at the last second and never had reason to go through with it. I also have run my own business in the past, so I'm in the position where I should know what I am talking about, but never have put it into practice. If I'm wrong, please feel free to correct me.


Anyway, I don't feel like cpm is an accurate representation of the costs of owning a truck when used all by itself. While you do have costs that care about how many miles you do, you also have costs that are still there if the truck never moves. Best move, IMO, is a combination of these two.


I'm setting up a scenario where there are two identical operation, with the only difference being that Truck A uses cpm only, and Truck B uses a combination of cpm and daily costs. I'm trying to make the math easy, doing it all in my head, and not double checking anything with a calculator, so forgive me if some of these numbers are a little off just to make it easy for myself.

We'll start with the fixed expenses. That's your insurance, tags, truck payment, and anything else that doesn't care about miles. If you're not sure, park the truck for a month to see what bills you still have, and those are your fixed costs. Figure $12,000 a year for insurance, tags at $2,000-ish, add in a small truck payment and whatever else I forgot to work with a number of $24,000 a year or $2,000 a month.

Fuel is a variable cost, as it only has to do with the truck moving. Zero miles means zero fuel cost, but once you start putting on miles that number comes into being. We'll forgive APU usage and idle time for now, just to make it easy, but I'll try to remember to touch on it later.

Your maintenance fund usually goes here, as it's most directly related to miles driven. That's not 100% accurate, as things will still wear down when the truck is parked (ex: dry rotting tires, wanting to change the oil on a truck that's been sitting a year, etc.), but it's more than close enough to do as a cpm IMO.

I'm going to say that both operations have a fuel cost of $.60 cpm, which off the top of my head and without grabbing a calculator, I'm thinking is about 6.5-ish mpg. Then we'll do a maintenance fund of $.15 cpm, for a total of $.75 cpm in variable costs.

Can't forget to pay the driver. To make it easy, we're both aiming for pay of around $48,000 a year, or $4,000 a month.


Truck A is driven by a cpm rate and he's basing it off of 10,000 miles a month. Already that's a problem, as needing to base it off of mileage tends to skew your numbers if you run over or under that amount, but we'll go with it since that's the common practice. If we take the variable costs (fuel + maintenance) of $.75 a mile, fixed costs of $.20 a mile ($2,000 \ 10,000 miles) and the drivers pay of $.40 a mile ($4,000 \ 10,000 miles) you get a break even point of $1.35 a mile.

Truck B starts that same $.75 a mile variable cost. Difference starts when I convert those fixed costs into a daily rate and pay myself as a daily salary. $2,000 fixed costs + $4,000 salary = $6,000 a month. Using a 30 day month as my basis, that translates into $200 a day. So, Truck B needs to make $200 a day to break even, plus $.75 for every mile driven.


To lay out an example, lets say both drivers are offered a 1,000 mile run that will take two days from the time they show up at the shipper to the time they leave the receiver.

Truck A says they need $1.35 a mile for the 1,000 miles, so at $1,350 it becomes a good load.

Truck B says they need $200 for each of the two days it will take ($400 total), plus $.75 per mile ($750). It becomes a good load to them at $1,150 or $1.15 cpm.

Point is not that Truck B can haul it cheaper. That changes as the individual loads change, and may be higher or lower than Truck A. Point is that the math is more representative of actual costs, which should become more obvious in the next example.


Now, lets take that same 1,000 mile load and say it doesn't unload until the third day.

Truck A still does the math to come out to $1.35 a mile, or $1,350. They think they must be losing money sitting around for a day, but how would they know how much? Only way I could see them figuring it would be to either stick to that original cpm, or to figure they're losing 500 miles a day and expect that to be in the rate (despite not spending money on fuel). They're numbers are now off, and they have to make up the miles later in the week to get it all to work out. How would they know what cpm makes it a good load again? They want the wheels moving again, because with their math that's the only way they make money. You've all met these people, as they're the one's getting all pissed off that they have to wait.

Truck B still has the same variable costs of $750 because the mileage didn't change. But, with an extra day of sitting around you have to add an additional day of fixed costs (remember that includes driver pay as well), running them from $400 to a new total of $600. At $1,350 ($1.35 a mile, same as Truck A) this is a good load. This owner is as happy as can be on that third day, because they're just spending the day napping in the sleeper and they understand that they're getting paid for it.


One more time to make it even more extreme. This 1,000 mile load picks up on Thursday. While you could get it there to unload on Friday afternoon/evening, they don't want it until Monday. You know this shipper, and know that your 6:00 am appointment on Monday morning will have you leaving their property late that evening, with zero chance of getting any detention time. So now you have to invest 5 days into this 1,000 mile run if you take it.

Truck A knows that $1,350 ($1.35 a mile) isn't going to cut it, but it's based on feeling and experience, not any sort of math including days spent. Most likely they'll just refuse it because they're sitting so long, even if it pays more. Or, they'll suck it up to get a 34 and think of it as a time they're not getting paid. At what pay would they start taking this load? Would $1.50 a mile be good? What about $1.75 or $2.00? I can't see any way they could figure it based only on cpm, and compare it to when it was a two day load.

Truck B needs $1,000 pay for the 5 days, plus the $750 to cover the mileage, for a total of $1,750 ($1.75 cpm). Understanding doing it this way, they can see that this rate would pay them for not just the two days they spent in the truckstop getting their 34, but also pay them for the day sitting at the dock. They can see the relationship of time and miles, and can understand how costs change when you aren't moving.

Now, every driver is different, but I bet that most drivers in the position of Truck A would turn down this load at $1.75 a mile because they thought it wasn't paying due to the amount of time they'd be sitting. Maybe they'd take it at $2.00 mile, but I bet most of them would spend the whole time being pissed off and thinking they were getting ripped off. Yet, Truck B could see that $2.00 a mile covers their expenses, pays them for the two days of work, pays them to take their 34, pays them to hang out in the sleeper at the receiver for a day, and put an extra $250 in their pocket at the end of it all. Exact same pay with exact same expenses, but the difference is in figuring costs how they are actually paid by the business vs. still figuring things the same way you did when you were paid as a company driver.


Now, I did not include idle and/or APU costs, although I think they are important if you are trying to be paid to sit. Figure that idling burns roughly 3gph and an APU burns .4gph, these costs will add up if you sit. You could try and absorb these into your mpg figures, but I have to wonder just how inconsistent they would be. At $4.00 a gallon, 24 hours of idling will cost you close to $300 and an APU will cost just under $40. Might not be a bad idea to throw these costs on top of your daily costs for any day you might be sitting all day. For example, if I'm driving my fixed costs are $200, but if I'm sitting all day and I'm going to be running the APU I need to add $40 to the top of that as sort of a "sitting charge". If you sit enough, you might even find a need to tweak your maintenance numbers a little to cover for this idling/APU usage, since the lack of miles will not be adding to this fund.

I also am not 100% sold on a salary only pay for you as the driver/owner. My plan is to pay myself (as a person not as a company) a slightly smaller salary, but give myself a cpm bonus for every mile driven. In the real world your numbers won't be as pretty as mine, and you'd be more likely to end up with something ugly like $.76345 per mile and $192.87 per day. I think I'd play around with the amount of salary vs. cpm I paid myself to make the numbers easy to deal with. My example also assumes I will pay myself while I am home, requiring me to get ahead before I take time off. Fixed costs required by the truck still exist in both examples, but driver pay stops for cpm guy when he's home. I just figure that a business owner never takes a day off, and I should be compensated as such, but your situation is going to be different than mine. Also, paying myself while at home increases my personal salary, but not doing so would actually provide for more hometime while still being able to keep the business afloat (at the expense of your personal paycheck).


If it seems too complicated, it's not that hard to make yourself a worksheet to keep in the truck. Simply, look at the miles and multiply that by what you need as a cpm. How many days is it going to take multiplied by whatever your daily cost is. If you want to charge extras like that "sitting charge", or tarping, or a NYC penalty, or just a "I hate going to this shipper, so I need an extra $100 to deal with them" charge. Add it all up, which shouldn't take more than a few seconds longer than cpm calculations, and you can see your break even to know if you want to haul for whatever rate.



So, do I have a better way of doing this, or am I missing something that y'all out in the real world know that I don't?

 

Very interesting! I do like the combination of the cpm for variable and daily for fixed. Should be easier to adjust the numbers on the fixed side considering it would be more accurate. Would this not justify taking a cheaper load today over a higher paying one tomorrow if the numbers work out?

 

If you're talking about SNI Choice..No flatbed and No on your own trailer.

Though there is talk of Schneider getting back into flatbed type loads.
They do some now with dedicated accounts..all company guys.

As for running a cheaper rate to get to a better rate..I do it all the time.
For example: when running up in the New England area you will get a great rate going in..but coming out is the kicker.
I can usually get something going into Mass or CT for around 2.20-2.50/mile but when coming out you'll be lucky to get higher than 1.40/mile.
But load A bringing you in paid the bills load B gets you back down where the freight pays better.

Then there's the trick of running 2 loads a day to make the numbers work.
I do this when longer paying runs have "dried" up.
It makes for a longer day but can pay above $1000 for the day.

It's all about planning your weekly loads..string them together and run baby run.

 

It's not assignable until CS sets the appt. time. I'm pretty sure your ica can't put it on you either. Keep hitting that refresh button driva lol.

 

You can call your ICA who will call CS and ask about it if you want. Sometimes that will get it confirmed by CS quicker. But usually I get a message back some hours later saying the load changed or is fine or is available now....

 

That is probably the best and most accurate business plan I have ever heard for running a truck as a actual business. I'm gonna save this and try to apply it when I jump in my own truck.
Heck that could be applied to a company driver as well in a sorts. We all have static bills that have to be paid whether our company has us rolling or not.
I really like this. Kudos sir.