1.20 /mile expedite freight
- Thread starter astikhossw
- Start date
So many times I see people throw out the subject of the truck payment as far as it reflects to operating costs. Even if your truck is paid off, you still have to depreciate or ammortizethe purchase and ensure that you are putting that money aside for the replacement unit. Having the truck paid off or a low payment because of a large downpayment does not change your true operating costs.
Your point is well taken.
You would be surprised how often people discount that very idea.
You have a select few that will argue till the cows come home claiming a return on investment doesn't matter or doesn't exist.
Exactly right!
I agree that the cost should be factored in. But since mine is paid for I do not include it as an operating expense, rather I consider it an asset of the business.
To me the bottom line is how much did I make minus how much did I spend doing it. What's left over is mine and Uncle Sam's.
I do save for a new truck as well as for unexpected maintenance.
To me the bottom line is how much did I make minus how much did I spend doing it. What's left over is mine and Uncle Sam's.
I do save for a new truck as well as for unexpected maintenance.
moose
Veteran Expediter
or you can get creative ,and buy trucks with no money down ,
which allow you to be Extremely competitive in the market place ,there for that 1.20$/M might be looked at in a whole new light ...
why on earth would you limit your load opportunity ,and spend your own money to get into that "next truck" ?
which allow you to be Extremely competitive in the market place ,there for that 1.20$/M might be looked at in a whole new light ...
why on earth would you limit your load opportunity ,and spend your own money to get into that "next truck" ?
nightcreacher
Veteran Expediter
Moose, you hit the nail right on the head.Ive been an owner opp for almost 30 years,Ive only put a down payment on 1 truck.Sure the payment is higher,but the interest and depreciation will over shadow that expense,and if it doesn't work out,you loose the truck,your not out any out of pocket money.
or you can get creative ,and buy trucks with no money down ,
which allow you to be Extremely competitive in the market place ,there for that 1.20$/M might be looked at in a whole new light ...
why on earth would you limit your load opportunity ,and spend your own money to get into that "next truck" ?
Thats a great idea if you have good credit.
For those of us that lost everything in the Great Recession, including our credit, the only choice is cash.
greg334
Veteran Expediter
Although it is a great idea, the problem is that most can't figure out how it works or be in a position to be able to do that.
But back to the issue at hand, $1.20 a freight,
This seems to imply that most of us have a choice on what the company we lease to does to market our truck to it's fullest extent.
Our success depends more on them than ourselves. Noticing that most who say that it doesn't seems to have only been with one company and only one company.
But again, success isn't defined by the fancy truck or how well you did but what you call success.
But back to the issue at hand, $1.20 a freight,
This seems to imply that most of us have a choice on what the company we lease to does to market our truck to it's fullest extent.
Our success depends more on them than ourselves. Noticing that most who say that it doesn't seems to have only been with one company and only one company.
But again, success isn't defined by the fancy truck or how well you did but what you call success.
To some, those are almost fighting words. I pointed that out once to someone talking about running cheaper because of a paid off truck and got cyber yelled at! Sometimes you just have to pause and wonder...
nightcreacher
Veteran Expediter
You don't run cheaper because of no truck payment,you still will either replace the one your driving or rebuild it,and that is an expense you cant get around.If you want to run cheap,you have to change your mode of operation.Less dead head,better fuel economy,do oil samples so you can extend your oil changes,even slowing down,it will increase your tire wear.If you don't get at least 200000 miles on your steering tires,your wasting money.
Agreed.
I don't think anyone should run cheaper because they don't have a truck payment. It just looks really nice after all the bills are paid to see the money going back into the savings account and not out to a finance company.
EASYTRADER
Expert Expediter
truck replacement or depreciation .10 per mile
Fuel .35 <varies with mpg and cost> Maintenance .08 <nat. avg according to atbs>
There is .54 cents per mile give or take a few cents eitherway. No matter what. This doesn't include insurance, DMV, or other fixed bussiness costs.
If your labor is at least up to swifts standards then you time is .26 per mile
so now were at .80 cents per mile just in legit cost.
If you add in a 10% profit which is humble then I would guess .88 cents is bare minimum to make this possible.
Having said that. I personally , barely escaped bankruptcy last year, and for several months the load offers came in around this level.
I contract with FECC.
Practically speaking, with fecc you'll get around 110k miles per year, this is my 5th year and I have 450k miles on my truck.
Having said all that, practically speaking at Less than 1 buck per mile <total rate> with fecc in D unit over the long hual You will go broke.
If the miles per year were to go up then you could run at the lower .88 cent rate because ur fixed costs remain the same. However , because of the low miles,
in the long run, 1.10 per mile is about the cheapest you can run.
Rates are so low now I would NOT buy another straight truck or get into a straight truck as a bussiness. A tractor yes but not a box truck.
Fuel .35 <varies with mpg and cost> Maintenance .08 <nat. avg according to atbs>
There is .54 cents per mile give or take a few cents eitherway. No matter what. This doesn't include insurance, DMV, or other fixed bussiness costs.
If your labor is at least up to swifts standards then you time is .26 per mile
so now were at .80 cents per mile just in legit cost.
If you add in a 10% profit which is humble then I would guess .88 cents is bare minimum to make this possible.
Having said that. I personally , barely escaped bankruptcy last year, and for several months the load offers came in around this level.
I contract with FECC.
Practically speaking, with fecc you'll get around 110k miles per year, this is my 5th year and I have 450k miles on my truck.
Having said all that, practically speaking at Less than 1 buck per mile <total rate> with fecc in D unit over the long hual You will go broke.
If the miles per year were to go up then you could run at the lower .88 cent rate because ur fixed costs remain the same. However , because of the low miles,
in the long run, 1.10 per mile is about the cheapest you can run.
Rates are so low now I would NOT buy another straight truck or get into a straight truck as a bussiness. A tractor yes but not a box truck.
nightcreacher
Veteran Expediter
Easy,you running solo,in my worst year there,I ran 120000 miles,and still grossed $200000,Doing better than that now, since I'm with Tri State
If the Fed is throwing straight truck loads to drivers at 88 cents per mile including the FSC, that is hardly a reason to pull out the pom-poms. I am mindful that several other carriers are still running at that rate. This strategy may eventually come back to bite some of them as new entries of trucks are shrinking.
Much harder to finance a truck if new and that is reflected by the low inventories at truck dealers with regards to expedite equipment. Can easily see how one would be flirting with bankruptcy running at those bargain rates.
CharlesD
Expert Expediter
Any carrier only paying a straight $1.20 is making a pretty good margin on that freight these days. The cheapest expedite out there at the moment, brokered loads off the alliance, is still going for over $1.50 at the low end, mostly higher than $1.60-$1.70. That's just brokered freight off the alliance, which is highly competitive and tends to get bid down pretty low. If that's the brokered rate, what do you think people are getting from their customers? Now I understand that a carrier needs to make a profit. Heck, I'm trying to make a good profit off the loads my owner operators run, but I also realize that a carrier without owner operators if far less profitable, so making sure they get a good enough rate to remain at least reasonably happy is a priority. If a carrier absolutely needs to make .50 a mile off straight truck freight to remain in business, then maybe they need to look at their own costs of operating.
The bottom line is that everyone in this business needs to take a good look at costs and what fat can be cut out, owner operators and carriers alike.
The bottom line is that everyone in this business needs to take a good look at costs and what fat can be cut out, owner operators and carriers alike.
EASYTRADER
Expert Expediter
I am a team operation, and yes the miles suck.
We get 3 to 4 runs per week and our average is 800 miles per load. Anyway at least I have an income. BTW if hadn't been for my successful stock speculation last year we would have gone broke.
We get 3 to 4 runs per week and our average is 800 miles per load. Anyway at least I have an income. BTW if hadn't been for my successful stock speculation last year we would have gone broke.
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Putting those budget Fed rates with those miles is a toxic combo. Glad the stock maneuver bailed you out.
If those rates and mileage continue, you might be better served to be a partner carrier to the Fed. Their broker loads pay much better than your indicated rate.
EASYTRADER
Expert Expediter
Fedex is getting the better part of the deal for sure, 60% split is crazy in my view. But it seems to be par for the course. BTW, 1.50 gross * .6 = .90.
As for becoming a partner carrier, I had considered getting my own authority, and have even been approached by local brokers, however to be honest I didn't want to stay in the business more than a couple more years anyway.
My judgment is probably flawed there, If I had a tractor I would be more inclined to go that route.
As for becoming a partner carrier, I had considered getting my own authority, and have even been approached by local brokers, however to be honest I didn't want to stay in the business more than a couple more years anyway.
My judgment is probably flawed there, If I had a tractor I would be more inclined to go that route.