Why oh why are you drivers taking this cheap freight????

That is NEVER going to change. It is how MOST companies do business. Carrier I used to be leased to, a debt free profitable operation with 175 trucks, 300+ trailers, warehousing, logistics/supply chain management services... ..the business model for their regional operation is big bucks out and whatever they can get back to TN. It's just how this business works for the most part...

 

AMEN DUDE ! I recently took 2 loads from idaho to san antonio tx both times i couldnt get a load out for more than $1.60 ,,, tried dallas, amarillo and denver ended up 2 times 1487 miles empty now ask ME if i haul cheap freight!!! i now have a min of 3.00 per mile to do texas, do i go there at that rate,,,, not yet!!!!! Do i care NOPE!

 

Well I figured out my numbers, if I am going to buy a truck next month, it will cost me about $1000/week to operate the truck.

$200 truck payment
$100 trailer
$400 maint/repair/tires
$100 insurance (carrier pays other half)
$100 office equipment
$100 start up costs divided by 50 weeks

$1000 a week to operate

Now based on 2,500 miles, would be about $1600 in fuel, plus the $1,000 = $2,600

So about $1.05/mile + whatever cut the carrier gets, looking for someone who pays percentage.

If they take 15%, then based on 2,500 miles at $2/mi avg all miles in, then that's $5,000 gross, - $750 (15%) = 4,250 - $2,600 = $1,650 which = to $.66/mi profit.

Honestly, I don't think I'd do it unless I can make at least $2,000 profit a week. So on 2,500 miles, I'd need to gross $5,400 which = $2.16/mi all miles in.
If I deadheaded 10% of those miles, then I'd have to get $2.40/mi avg loaded.

And that's with a cheap truck and cheap trailer.

If I had those two paid off, then we're looking at $300 more profit, then that's $2,300 in operating costs. I'd have to avg $2.25/mi loaded.

So it's not a big difference between $2.40 and $2.25

Biggest expense is fuel.

Having your stuff paid off is not a big deal. Maybe having a big fancy truck is a big deal, that will eat up money for sure, but even with a $25,000 truck, that is still cheap.

So I am thinking that if these people are taking freight for that cheap, I don't see how they are averaging enough to make it worth being an O/O. They will eventually leave the industry, new people will come in and take the cheap freight, etc etc

So how am I, as not even being an O/O yet, and being able to come up with these numbers that I am thinking are pretty close to accurate forcast, how am I coming up with these conclusions, and those who have been in the industry forever aren't realizing that they aren't making a profit by saying "$1.25/mi, sure I'll take it" that just doesn't make any sense. I can see ok, some areas are bad markets, but come on, everyone's backhaul is someone's headhaul.

I'm not so sure I want to buy a truck anymore unless someone can provide me with numbers proving they are making at least $2,000 profit a week off of brokered loads / load boards, I will be glad to give my email address. But who is going to do that?

 

Your numbers are way off first off your not going to find a carrier that only takes 15% maybe if you covered insurance tags Ifta plats and all.
Even with what your calling a cheap truck at $25,000 your looking at a $1,000 a month for 30 months my trailer note is $800 a month for 30 months and put down $3,600 so I pay $1,800 a month just for notes truck/trailer and base plats I pay $3,900 a year so that's $325 more a month and if you think your going to run 2500 + miles everyweek your crazy ya I do it some weeks some I drive 3300 some I drive 1200 so I don't come close to 2500 a week think I did 1,880 a week average last year

Keep pushing them numbers buddy and don't forget you pay taxes on that money that comes in and if your not a book keeper you'll need that and load boards for finding freight and the list goes on..........

 

Don't forget the operating reserve so your finances aren't bumping on "empty" regularily, and enough in the maintenance account to keep you running. Then there's the cents per mile into the maintenance account, and the tire fund. And most importantly, don't be forgetting to PAY your driver - that'd be YOU!

 

Theirs plenty of people that turn 2500 plus miles a week. The real question is how many are making good money doing it.

 

i do about 3000mi/wk and get a gross revenue about $5,000+ on avg

 

Ya that's right i can run 4,000 miles a week and make $6,000 but I'm not doing it

BoyWander said he would have to get $2.40 a avg mile with 10% DH and that my freind is hard to pull off on a 2,500 mile week some weeks I do that but not every in fact I haven't done that in months, Last time out I did $1.87 a mile on a 2300 mile week 200 miles of that were empty

I'm starting to have way more empty miles than I have ever had before

 

I do pretty much what you are wanting to do Boywander. I showed you numbers from a couple of weeks ago, that 11% deadhead was an anamoly, most weeks it is 30-35%. I'll be finished up with 2012 by Wednesday or Thursday and Bill is going to get a full report and break down, month to month, quarterly everything. Deadhead percentage, length of haul on average, days off approx 3.5 months there I'm thinking... all of it.. I'll cc you in on that one. At this point it's $2.18 a mile to the truck on 75.5k total miles, that won't change much if any on two or three more loads (per mile rate won't)... Just because it can be done doesn't mean it was easy and that everyone can... have no illusions about loadboards if you can swing numbers like these pulling a dry van you will put in a lot of work.. have no illusions about truck ownership either. I went in the hole my first two years and am looking to just break even this year. If the next two years go very well at year 5 I'll have a real ROI for everything I have sunk into this including covering the first initial purchase of the truck. That is an honest assessment anyone who tells you expect to make profit from year one is FOS. This is why I stress to wannabes,and they seldom listen, why all cash in no borrowing is a must to survive. Cause I would have folded up long ago if I didn't operate that way..

 

I agree... For some unknown reason rates are worse than 2008/2009. People are uncertain where the whole US economy stands right now... So therefore buying less? Building less? Less urgent for freight to be moved?? Just my guess on 1 of the reason rates are lower now. Another could be the shippers/ brokers are playing us against each other. None of us, I'm sure , went into this to NOT make money...of course we want and need to make a profit. My thought is .. If we stop thinking/working separately and unite together, maybe united we can get rates back to a reasonable $$$$ Plus we need someone ( some group?) representing the truckers to our government.... Way to many taxes and fees to operate at a profit right now!! I feel like we are getting tripled taxed on fuel as is is. Very frustrating