Yup, like Cheri said, deadhead will kill you out here on many levels. As for the percentage, in expediting with a van, you need to expect your deadhead to be between 20% and 30% of your loaded miles. If it's more than 30%, you're deadheading too much, chasing freight too much, likely moving when you should be sitting and waiting. On the other hand, if it's much below 20%, then you're probably sitting too much and not as aggressively moving to obtain a load. It's a balancing act, to be sure, and it will take some time to get it all nailed down. Just don't look make the mistake of trying to keep the deadhead on each individual load at below 20%. Some will be 35% or more, some will be 1% or less. But over time, if your deadhead starts creeping up, you can then start turning down a few high deadhead loads here and there until your total deadhead falls into line.
Another reason for the 20% figure, especially if you look more at loaded miles and not all miles, which is how I look at it, then the 20% figure will generally ensure that the FSC covers not only loaded miles fuel, but fuel for deadhead, as well. If you get 15MPG, that won't apply. If it's 20MPG or more, you're set. But the deadhead percentage also needs to figure into things. Like, if I get one that's 90 miles deadhead for 200 loaded, that's 45% deadhead. If the FSC is like 12 cents, that's fine for the loaded miles, but I can't eat 45% unpaid deadhead on something like that. If the FSC is like 20 or 25 cents, on top of my .77 loaded mile pay, then the deadhead is pretty much covered, unless the load is taking me to a place where I'll have a lot of deadhead on the backend.
Some people don't look at deadhead percent as much as I do, and instead look at all miles and what the total pay is for all miles. The load example above, using your 70 cents per mile contract, would be 290 miles driven, which pays .82 per loaded mile in the first example, which comes to $164 total pay (.82 x 200). The per mile for all-miles would be 56.55 cents per all miles. With the larger 20 cents FSC, the total pay is $180 and for all-miles it's 62.06 per all miles. If the FSC is 25 cents, it goes to $190 and 65.52 cents per all mile.
At 20 MPG and $2.75 per gallon gas, the fuel cost to run that trip is $39.88. The fuel cost percentage of the three above figures is:
$164 - 24.32%
$180 - 22.15%
$190 - 20.99%
By the same token, if the deadhead was 20%, or 40 miles, of those 200 loaded miles, at 12 cents and 70 cents per mile, the total pay is the same $164, but the per all miles figure ends up being 68.33 cents per all miles. At that rate per all miles, figuring 290 miles times .6833, would pay $198.
So, whether you look at all-miles and depending on your Cost Per Mile (something that you'll very quickly need to take a close look at and figure out) you can come up with a minimum per-mile dollar figure for all-miles, or if you take a look at loaded revenue while keeping your deadhead as close to 20% as possible, it doesn't matter which method you chose, as long as you are keenly aware of your situation at all times.
Int he above example that pays $168, and that would pay $198 if the deadhead were at 20%, I'd have to take a close look at turning that load down, unless I was able to get an extra $25 or so out of them to cover that deadhead. Granted, the customer is where the customer is, and they could nor the carrier care less about how much deadhead I have, but the bottom line is that it's my truck and my business and without that extra $25 it's simply not in my best interest to run the load (again, unless it takes me someplace that I want to be, or some other factor that may come in to play).
Think of deadhead miles as any and all unpaid miles put on the van. That includes running round town when at home, jut as it includes driving from a bad area towards a good one. I look at mine every so often, by taking the current odometer reading and subtracting the beginning year odometer reading, to get my total miles driven. I divide that into my total loaded miles for the year to date, and that's my YTD deadhead percentage. Right now it's at 19%, so I know that I can take a few loads that have longer than normal deadhead in them and still be OK YTD. It's not a day-to-day or week-to-week thing, it's over time, monthly, quarterly, yearly. You'll have some great weeks and some weeks that you want to just kill yourself, but over time they all average out.
On the floor, I have had a forklift rip a couple of chunks out of mine, but a little Bondo and a power sander, another few coats of Polycrylic, and it's good as new.
As for the .70 contract rate going up, it might happen, but I wouldn't hold my breath. I've never known Panther to increase a contracted rate. On the other hand, if the new contracts 6 months or a year from now are set for 68 cents or 65 cents, they won't force you to sign a new one, either. They'll let you stay at your current contracted rate. Can't say that about a lot of carriers.
Oh, while I'm thinking about it, in orientation someone may tell you that deadhead doesn't matter, all that matters is getting to that next load and getting that loaded miles revenue. Just sit there and smile, don't say a word, 'cause it's a load of crap.
Deadhead absolutely matters. And it's in your best interest to see that you are able to minimize it the best you can. If you're in the wrong place, that's not the carrier's fault, either, so you can't expect them to take care of you and cover your deadhead, unless it's in their best interest to do so (which is another reason I like the fringes, no one else for them to give the load to).
Not another "i hear" story
