An Other way of looking at it

[TJ959]

My wife has a background in accounting, which is a good thing, but she has a way of knocking the stilts out from under me from time to time. I hear a lot of talk about cost per mile as a rule of thumb for accepting loads. I think it's a great tool for that but my wife has always used the cost per day number for bringing me back to reality. The cost per day is a figure she uses which takes into account all expenses. You know, fuel, payments, interest, depreciation, food ETc ETc. Well, it used to be higher with my D truck but I figure with my Sprinter it averages about $100 per day if I'm careful, when I'm out on the road. It costs a little less when I'm home. When business is slow this number can be very disturbing. Because of this I'm less critical of loads when I'm out and more critical of them when I'm home. I know this is a standard accounting practice but I don't hear it mentioned much. I think of it every time I get a load offer. It may not be a home run offer but sometimes a single can help out in the long run. Just my two cents and a way of over emphasizing the obvious.

 

[TJ959]

man we really need a spell checker on this site

 

[tec1959]

TJ you know I've never looked at It that way,But Its just like you said just another tool.I really think by the day would work out better If someone would stay out for weeks at a time.Thanks for the heads up on this...Sure something to think about...

 

[Tennesseahawk]

I agree with TJ's methods. If I'm home, it had better be a run worth taking me out of the area. Being that I'm in the Detroit area, I've gotten some good loads. Sometimes, they came after turning down loads I would have otherwise taken, if I were already on the road.

 

[RichM]

Another way of looking at it is these are your fixed costs which go on every day whether you roll 1 mile or a thousand. When you wait 3 days for that great run the final amount may not be so great as you have 3 days of fixed costs to apply against the run revenue plus your operating costs.

 

[guest]

I know My spelling is bad too. But your okay



Drive safe

Dave Mayfield
FEDExCC/Roberts Express O/O Since 3/1/1995
C1847,C2045,D3397,D5047

 

[LDB]

I can see this as a two edged sword. After sitting 2 days one looks at a load offer. Based on rate per mile it's a good offer, perhaps very good. Based on cost per day and adding in the 2 days sitting it isn't good. The operator turns it down because it didn't do a good job of recouping the two lost days expenses. Nothing better comes along and what was a very good offer based on the usual cpm method is now also gone and another day of sitting and fixed costs is incurred. It's important to know all these things but also important to look at all sides when evaluating offers, not just one method. My .02 worth.

Leo Bricker, 73's K5LDB, OOIDA 677319
Owner, Panther trucks 5507, 5508, 5509
Highway Watch Participant, Truckerbuddy
EO Forum Moderator
----------
Support the entire Constitution, not just the parts you like.

 

[x06col]

Thst's right Leo, I always figgured if I wanted to hit a home run each day every day, i'd try out for the Cubbies, they certainly need the help.

 

[davekc]

I would agree with Leo. We look at each individual run, and its potential. That includes determining the Total CPM. As for finances, we have them reviewed on a quarterly basis. The biggest reason is some quarters perform differently than the others. It aids in budgeting expenses throughout the year.
A good example of this would be routine maintenance. We do this when we know in advance the truck won't be moving. Christmas and new years holiday would be an example, knowing in advance that January isn't as busy as say another month. Same thoughts the first week of July ect.
We seldom look at anything on a daily basis. If so, I think I would stress too much, and then it would take all the fun out of it.
Now the wifes shopping I might look at on a daily basis:7








Davekc
owner
22 years
PantherII
EO moderator

 

[TJ959]

I really think that this has caused me to accept more loads because some revenue to offset these expenses is beter than no revenue. When you're sitting away from home you are incuring more expense but even at home you have fixed expenses that are eating you up. The only way to offset these expenses is to generate revenue. Lets face it. Not every run is going where you want to go or paying what you want to make. I think I accept a lot more marginal loads because it's better than sitting and being picky. Frankly I don't think I've turned down more than two loads in the past year and those were obvious major money loosers.

 

[davekc]

That is the advantage of knowing that CPM. If you took a run for example that is marginal or you need cash flow, that may satisfy a immediate need, but that will catch up to you in time.
The other side of that is that there are 30 days in a month, and you want to maximize those days as much as possible.
A day isn't recovered if your sitting, but you don't want to move and lose money either.







Davekc
owner
22 years
PantherII
EO moderator

 

[highway star]

Geez! Why can't it just be easy?!? You know, here's a load, no deadhead, big bucks, 72 virgins when you're done. Is that too much to ask?

 

[ATeam]

As I read this thread, the thought occures that load acceptance is both an art and a science. It seems that every expediter out there continually evaluates loads and immediately wonders if he or she could have done better after each load decision is made.

The fixed costs are important to know.

The variable costs are important to know.

The costs per mile are important to know.

The loaded-mile and all-mile pay for each load are important to know.

The characteristics of the delivery area (express center) are important to know (busy or not).

The business and personal goals you are trying to achieve by being an expediter in the first place are important to know.

All of this and more run through your head with each load offer and each decision to stay put or go home, or to stay in service or go out.

I suppose the uncertainty is not unlike that experienced by a store merchant who is continually wondering what hours to be open, how many employees to hire, what items to put on sale, what to charge for others, how much advertising to buy and what kind, and how to bring more and more people into the store.

In the midst of this ongoing expediting uncertainty I am absolutely certain about one thing. I'd much rather own a truck than a store.

 

[TJ959]

Here we go with the three basic needs again Kim. Hey A team. I've done both those things and I think you are correct about the truck. I may try being a greeter at Walmart though.

 

[davekc]

I would agree that it is a science, but not really an art. Knowing specific areas, who and when customers ship expedite is really the key. Some customers may ship out five loads in a day, but it is all at the end of the month. The amount of emergency call ins is relatively marginal. Alot of expedited freight is booked several days in advance.
Experience and knowledge of particular areas will determine a locations success for available loads. The large truckload carriers have very advanced software for this application but is seldom used in expediting. Why? They have little or no cost associated with sending a unit into a unproductive area as long as they have units to cover other freight in their own freight lanes.
The more experienced and knowledgable that a individual is in this application, the more successful they likely are with load selection.











Davekc
owner
22 years
PantherII
EO moderator

 

[highway star]

Maybe a good description would be imperfect science. There are times I made moves that should be productive, only to have that area be unusually quiet. I've also left areas that would normally be the kiss of death, only to be turned around to pick up a great run.

 

[davekc]

You got that right. A 100 percent science and we would all be rich.






Davekc
owner
22 years
PantherII
EO moderator

 

[mrgoodtude]

Everytime I think I have figured it out the freight gods throw a monkey wrench in the works.
Sometimes the dog other times the post man.
Mike and Cyn

 

[dhalltoyo]

I agree!

I am ALWAYS more discerning when I am at home. As I live in a decent freight area that obvioussly has some bearing on my decisions, but I can always live a lot cheaper at home than on the road.

That also has some bearing on my decision to head for home on Friday night or Saturday morning. For example, I get a run from Ohio to Virginia. The run is 376 miles and the return trip to home is 340 miles. My operational cost is 24 cents per mile. It would cost me $88.00 to go home. Considering meals for two days ($40.00), two showers ($18.00), laundry ($6.00), internet ($10.00) and snacks ($4.00)...I am now at $78.00. Deadheading home now translates into a $10.00 expense. Hey, that's pretty inexpensive to be with the ones you love.

Of course, this assumes that I have dropped off in an area that I know is not good for freight come Monday morning.

Just something to consider.