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csramsey640 · Joined: 30 Sep 2006 Posts: 128

OK, just got done figuring out our cost per mile for the past 6 months, it came to about 1.05 cpm, with driver $$ of 45k per year. Yes we have a minimal truck payment, no health insurance, etc.

That being after maint, fuel, etc.

My question is this, what is wrong with 1.40 loads? I admit I have taken 1 load that paid 1.45 just to get out of the area and back to some good paying frieght, but other than the fact MORE MONEY IS BETTER. If the driver/truck costs 1.05 cpm, then the other 35cpm would be rainy day money right?

Yes I dont jump all over the junk freight, our standard rate is much higher, but what am i missing :?:

Truckdobe · Joined: 15 Feb 2004 Posts: 235 Location: Gaffney, SC

You answered it yourself. $45k for driver wages you can make without the risk of ownership and no benefits....

You're supposed to be the business owner, not a driver, if you want to be a driver, get a good job (that pays better than 45k) and has benefits.

I don't have a 'less expensive' truck, won't work for $45k and max out the ROTHs plus SEP and have more insurance than I'd care to think about. Needless to say, 1.40 ain't happening.

GMAN · Joined: 13 Feb 2005 Posts: 9671 Location: Tennessee

The problem with $1.40/mile loads is that they don't pay enough, with costs of running a truck being so high. Like Truckdobe stated, if you can only net $45M you may be better off as a company driver. When you take the cheap loads, it only fuels the flames to keep rates low. Rates rise and fall due to capacity and their ability to move the freight. If freight sits at the shipper too long, then rates will rise until they find someone who will take the load. It is a very simple concept, but there are many who fail to fully understand the long range implications of taking that cheap load. I understand that there are those who are not well funded and they may not have fuel money to deadhead out of a bad area. If that is the case, and you continue to need to take the cheap loads to keep rolling, then something is wrong. You need to raise your expectations and demand a higher rate for your truck to move. The main thing to remember is that no one can tell you how much you should charge to run your truck. Everyone's expenses are different. What seems like a fair rate for you may not seem like a good rate for me. Truckdobe may have a different rate then either of us. I have a target rate that I always try to get. Some areas have a higher target rate. I also have a minimum rate for which I will take a load. Unless I can make a fair profit I don't take the load.

allan5oh · Posted: Mon Oct 30, 2006 8:37 pm Post subject:

Re-read his post guys, he's saying hes getting .35 cents a mile AFTER 45k in salary.

GMAN · Joined: 13 Feb 2005 Posts: 9671 Location: Tennessee

Don't confuse us with the facts. :wink: You are correct. So he is probably making less than $45,000. :shock:

Truckdobe · Joined: 15 Feb 2004 Posts: 235 Location: Gaffney, SC

allan5oh wrote: Re-read his post guys, he's saying hes getting .35 cents a mile AFTER 45k in salary.

Then why doesn't he have a full benefits package?

http://www.ooida.com/trucking_tools/CPM/CPM_Worksheet.htm

That worksheet is very basic, but even it includes HEALTH insurance.

I just reran mine based on that simple sheet; threw in a new trailer payment just b/c at some point I may want to buy another new one and left the original values in maintenance to simplify. It came up with .979 pm before driver wages and ROI.

Basing your prices on your current condition implies that you will always drive _____ and pull _____. For the past 5+ years that I haven't had a truck or trailer payment, I still charged as if I were paying them (large ones) just in case I decided to upgrade. I didn't think I would, but I did and the payments aren't shocking and didn't really change my cost per mile b/c I've been including ghost payments all along.

I suppose your rates are your business. It's obvious that there are plenty of people who will haul for that and less, it makes it hard for everyone else, but I suppose that's just more BS to deal with and part of doing business.

Having a rate set in concrete basically doesn't work IMO, 'good' $$$ out of the NE is totally different than 'good' $$$ into the NE; the same for FL, CA, the NW etc.

rank · Joined: 02 Oct 2006 Posts: 1286

csramsey640 wrote: OK, just got done figuring out our cost per mile for the past 6 months, it came to about 1.05 cpm, with driver $$ of 45k per year. Yes we have a minimal truck payment, no health insurance, etc.

That being after maint, fuel, etc.

My question is this, what is wrong with 1.40 loads? I admit I have taken 1 load that paid 1.45 just to get out of the area and back to some good paying frieght, but other than the fact MORE MONEY IS BETTER. If the driver/truck costs 1.05 cpm, then the other 35cpm would be rainy day money right?

Yes I dont jump all over the junk freight, our standard rate is much higher, but what am i missing :?:

If you factor in deadhead and out of route miles I'd say you need to shoot for $1.80 to average $1.40.

I'd like to see a cost breakdown on that $1.05. Here are some of mine....Canadian yes but you get the idea.

Fuel costs are about $.50 per mile (7 CDN mpg at .$80/L)
Driver is $.33 (no benefits whatsoever)

Following expenses are based on $150,000 miles.
Truck is $.10 ($80,000 over 5 years, paid cash, no interest whatsoever)
Liability Insurance is $.08 ($13,000)

So we're up to $1.01 per mile and I haven't even got to maitenance, cargo insurance, tolls, fines, idling, accident insurance, Unemployment Insurance, Pension plan, authority costs, fuel tax, accountant fees, cell phone, faxes, meals, showers......and there's no trailer in this example.

I wonder if you're going broke and don't know it.

Rawlco · Joined: 25 Jan 2006 Posts: 1150 Location: Central Maine

Nothing wrong with your numbers Rank, but I would like to play devil's advocate for a minute.

Quote: Driver is $.33 (no benefits whatsoever)
That is a good number to start with, but I would like to see you budget for $0.50 per mile. If you can earn that with some experience as a company driver there is no reason to be a truck owner for inexperienced driver wages. That $0.50 will also cover some benefits. Note that profit is a seperate category in my book.

Quote: Truck is $.10 ($80,000 over 5 years, paid cash, no interest whatsoever)
It is good that you can do that. My question is why would you want to drive 150,000 miles per year if you own your truck. You could be more selective and take 80,000 miles of good paying freight instead. More gross money, less fuel expense, less wear on your truck, more time off. Looking at if from a cash flow perspective: If you figure a $2500 truck payment per month and run 10,000 miles per month average your truck cost is $0.25 per mile.

rank · Joined: 02 Oct 2006 Posts: 1286

[quote="Rawlco"]Nothing wrong with your numbers Rank, but I would like to play devil's advocate for a minute.

Quote: Driver is $.33 (no benefits whatsoever)
That is a good number to start with, but I would like to see you budget for $0.50 per mile. If you can earn that with some experience as a company driver there is no reason to be a truck owner for inexperienced driver wages. That $0.50 will also cover some benefits. Note that profit is a seperate category in my book.
We are a private carrier and that is about what we pay our drivers when they drive. These guys used to be company guys and o/o's but they either lost their trucks or burned out. I'll be the first to admit that $.33 aint alot but it's dedicated, they're home at least 5 nights a week, they show up when they want, they get $12/hr for waiting, they don't have to load....heck they don't even circle check.

Quote: Truck is $.10 ($80,000 over 5 years, paid cash, no interest whatsoever)
It is good that you can do that. My question is why would you want to drive 150,000 miles per year if you own your truck. You could be more selective and take 80,000 miles of good paying freight instead. More gross money, less fuel expense, less wear on your truck, more time off. Looking at if from a cash flow perspective: If you figure a $2500 truck payment per month and run 10,000 miles per month average your truck cost is $0.25 per mile.
True. See above. The reality is that the 150,000 is split primarily over 2 trucks and three drivers.

As for the $150,000...I used a high number to get the original posters cpm down.

csramsey640 · Joined: 30 Sep 2006 Posts: 128

Like I said I do not take 1.40 freight, but I decided it best because the truck was in S. FL and our customer had a load in S. Georgia that wasnt quite ready, instead of drive roughly 430 miles at my expense.

Now the same example in other parts of the county, no id never budge for the low of money, but 1.40 covered our butts up through FL, and I didnt have to fork the bill running empty, yes we have the money to, but I feel it best for our company to atleast cover the truck expenses if an absolute must.

I was pretty happy with 1.40 when I saw countless drivers sitting all over S FL, and I was back to our regular customers. We went down with decent pay knowing that our chances of deadheading back out were high, however everything lined up this time.

We dont need 10 cpm for more chrome, and 5 cpm for dish network, 3cpm for 20 more LED's, etc I see it everyday, and I see why people NEED $3.00/pm because of all the toys they have to have. Yes I do love $3 pm freight, and jump all over it, however with our situation we dont need to sit and wait for it. Like you guys said, we all differ. But we all agree cheap Freight hurts us all in the long run.

I guess thats why I choose this board, people overall do seem to
"agree to disagree" and all in all, everyone pitches in where they can. You know I never did account for "profit" at the end of the year. If it costs us 1.05 to 1.15 and thats what we average, then it would be a breakeven. :idea: Geez where was I :roll:

LOAD IT · Joined: 02 Sep 2006 Posts: 614

[quote="rank.

I wonder if you're going broke and don't know it.[/quote]

You bet he is!!!!

csramsey640 · Joined: 30 Sep 2006 Posts: 128

Whoa Whoa. I must have done something wrong. I just redid the whole spreadsheet and now Im getting very close to $2 per mile. :roll:

Wow really shows how much I saved going for that 1.40 load. Live and learn.

LOAD IT I must hand it to you, it made me go back through and re check, and I was way off

Rawlco · Joined: 25 Jan 2006 Posts: 1150 Location: Central Maine

It always depends on which miles you are talking about:
loaded book miles
loaded hub miles
total hub miles

BanditsCousin · Joined: 05 Jun 2004 Posts: 3296 Location: Chicago, IL

Rawlco wrote: It always depends on which miles you are talking about:
loaded book miles
loaded hub miles
total hub miles

HHG or Practical miles have a slight effect on year-end bottom lines too :wink:

csramsey640 · Joined: 30 Sep 2006 Posts: 128

This leads to me another age old question then. Ok with our customers we are fine, however I have yet to come across a load paying over $2.15 legal or not. short runs, sure $3 is common. but you burn countless hours doing so that it doesnt really make it worth it does it?

I have also yet to come across a broker willing to Neg, even after they state NEG under load rates.

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