Re: An Injustice Averted

[Freightdawg]

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"Diane and I would not take that load. A thousand miles divided by 50 mph (the speed FedEx Custom Critical uses for load planning) is 20 hours of driving. Add in 30 minutes of labor on each end to get to a dock and complete the pick up and delivery to give you 21 hours of work.

The price will vary between trucks depending on whatever driver health care and retirement benefits you build into your pricing, so lets talk about a cost range of $1.00 to $1.40 per mile to operate your truck and replace it when it wears out.

A load that pays you $1.40 a mile will give you a profit ranging from zero to $0.40 a mile, depending on your operating costs.

If you can keep your operating costs down to a buck a mile, your maximum profit on this team load is $400, which is $200 each, divided by 21 hours (the non-driving co-driver is committed to the load even when in the sleeper), which totals $9.52 per hour before taxes, showers and sleep time needed before your next run.

If it costs you $1.10 per mile to run your truck, it becomes $7.14 before taxes, showers and sleep. At $1.20 per mile to run your truck, it becomes $4.76 per hour or a hundred dollars each for the day and night you nearly donated to your carrier and customer.

It has nothing to do with a reefer. We value our time and equipment more than to offer our services and put miles on our truck at such a price.

Notice too that at the maximum profit of $400, your net pay is $0.40 a mile before taxes. Divide that by two for each team member to get $0.20 per mile. Could you not do better as company drivers and get an employee benefit package too?

Diane and I love the road and the freedom that expediting provides as much as you, but if meaningful profits (that's profits, not money) cannot be made, we would enjoy it very little if at all."



OK, I'm a little confused. If you turn down that load, and don't do another, how much money did you make in that 21 hour period?

 

[greg334]

Freightdawg,
I ask the same thing but you know I can't see why anyone would turn down $1400 worth of revenue for the 21 hours of work - that works out to $66 an hour gross.

For some it may be perplexing how someone can run their truck for more than a buck a mile.

I guess with the added 'expense' of replacement costs considered, it skews the numbers a bit because there should be a need to also include trade in/trade up revenue estimated when the truck's lifecycle is planned which should be used to offset the cpm for a paid off truck in the first place - if one is looking at shower costs and man hours.

But also it seems when you are a H/W team, your 'wage' isn't $200 each but $400 together.

Kind of confusing ... isn't it?

 

[jjoerger]

We value our time too. Sitting in a truck stop for days waiting for a load is not our idea of using our time wisely. If we can go out and run 13000 miles in 21 days and then take a week off we are much happier than running 10000 miles in 30 days at a higher rate. Bills and expenses still come due when you are sitting. Eating in a truck stop, idling or running an APU costs money.
We would rather run for less, make our income goal and spend our time off at home enjoying the things we have and that we work to pay for.
Instead of rate per mile we consider our average income after expenses per day. If running for less per mile equates to having a larger net income and more time off that's the way we will go.

 

[Brisco]

Let's put it this way......

I'll pop off with another analogy/metaphor, of which Phil will not read because I've been deemed a "Troll" in his mind.

Let's say you got a guy that has a medical condition where caffeine from coffee was the only thing that warded off life threatening seizures. Guy feels a possble seizure coming on, but has it stuck in his mind that the expensive coffee from Starbucks was the ONLY coffee he will drink to ward off that seizure. He believes his body just will not accept anything less than Starbucks and just absolutely refuses to go to a 7-11 to get a cup of coffee to ward off that seizure because 7-11 coffee is beneath his bodys needs. Even if it's just for that 1 time, of which he truly needs to "Live".

So, he keeps driving and driving past each and every 7-11 (which by the way outnumbers Starbucks 12 to 1 in this example) desperately seeking out a Starbucks.

If he keeps doing this time after time, and Starbucks slowly starts to close stores here and there. Or selling their coffee at 7-11's at a lower price cause of the competitive lower pricing there, and which the guy just will not stop at a 7-11 period, cause it's beneath him, sooner or later the guy is going to be found flat on his back cause a seizure finally caught to him and knocked him back to reality.

Reality would be that even though 7-11 coffee IS cheaper than Starbucks, it still does the same thing to his body to ward off those seizures, AND, there's a LOT more 7-11's out there that he can stop at any time he wants, or needs to to survive.

Now, replace a lot of this above with $$$ Rates Per Mile, Available Loads, turning down and accepting load offers with regards to FedEx or any other Expediting company, or multiple other Expediting companies out there, and you'll see the comparison clearly.

 

[greg334]

Jim, one of the things I see is how waiting costs while moving won't cost as much.

I couldn't refuse the 1000 mile run for $1.40 a mile not because I am greedy but because I need to keep my truck moving.

It costs me more per mile to sit than it does to move.

 

[Tennesseahawk]

If we're talking $/hr, I made 25 cents/hr as a Lance Corporal in the Marines.

Gotta look at the bigger picture, IMO. If $10/hr is beneath you to steer a wheel, I feel sorry for you.

 

[Ragman]

Jim, one of the things I see is how waiting costs while moving won't cost as much.

I couldn't refuse the 1000 mile run for $1.40 a mile not because I am greedy but because I need to keep my truck moving.

It costs me more per mile to sit than it does to move.

I always use the phrase "If the wheels ain't turning, I ain't earning"

 

[greg334]

I always use the phrase "If the wheels ain't turning, I ain't earning"

Do you include Bate's Breaks?

 

[beachbum]

1.4 a mile for a WG team that has a 200K or more investment in their straight truck is chump change. But I would have taken the load fort the revenue to the truck.

 

[jjoerger]

Anyone who pays a lot of money for a truck is doing it by choice. Carriers are not going to pay more because someone wanted an expensive show truck or RV with a cargo box.
Of course they will and should pay more for a reefer, lift gate, etc.
Our $28,000 dollar truck earns us the same rate per mile as a new $135,000 truck would.

 

[scottm4211]

That coffee shop analogy the troll posted is actually pretty good.

 

[Rocketman]

Anyone who pays a lot of money for a truck is doing it by choice. Carriers are not going to pay more because someone wanted an expensive show truck or RV with a cargo box.
Of course they will and should pay more for a reefer, lift gate, etc.
Our $28,000 dollar truck earns us the same rate per mile as a new $135,000 truck would.

This is what I always think when I read how everyone has different costs to cover. BS. The freight pays what it pays whether your in a $20k truck or a $250k truck. If you buy the expensive truck and turn down loads that don't meet your newly aquired costs...thanks!

I like the nice trucks and have always thought WG was the place to be for a team, but I've never understood the idea that how much you spend on the truck should determine your rates. Obviously money spent on additional equipment should be re-couped on loads that require that additional equipment. If you choose to wait for those loads, that's your call. But to sit there and demand those higher rates for freight that doesn't require the additional equipment...well...thanks again!

 

[ATeam]

OK, I'm a little confused. If you turn down that load, and don't do another, how much money did you make in that 21 hour period?

Where do you get 21 hours?

Regardless, we value our time and equipment too much to put cheap miles on the truck. We are not in the business to run at breakeven rates and thereby donate our time and equipment to shippers and our carrier so they can make money while we make little or none. We will save the truck for profitable miles before running at breakeven or slightly higher.

I don't talk about it hardly ever here in the open forum but I have two additional sources of revenue beyond expediting that can be generated from the truck. I don't talk about it because what I do is not something most other expediters could do or would want to do.

Diane and I run all three of our businesses as stand-alone activities and when I speak about expediting, it is in a way that presumes expediting is a business in and of itself that is expected to earn its own way.

The additional revenue makes it easier to stick to our expediting profitability guns when marginal loads come along or when a carrier is trying to force us to give away a service that would normally be charged for, but I like to think that if expediting was our sole revenue source, we would operate the same way, relying on savings to hold us over while saving the truck for profitable miles.

Profitable miles are miles that pay well and are available in sufficient quantity to pay our monthly costs of sitting and driving while also paying living expenses, retirement benefits and building our net worth.

Smart people in the Open Forum say its not about the miles, its about the money. I go one step further and say it's not about the money (as in cash flow sufficient to meet current costs and your truck payment), it's about profits.

 

[Tennesseahawk]

Pardon me. Do you have any Grey Poupon?

 

[ATeam]

If we're talking $/hr, I made 25 cents/hr as a Lance Corporal in the Marines.

Gotta look at the bigger picture, IMO. If $10/hr is beneath you to steer a wheel, I feel sorry for you.

If you are willing to accept $10 an hour to steer a wheel, I feel sorry for you.

 

[Dakota]

Just goes to show, that everyone will run for different amounts for different reasons. Isn't America great!!!

Posted with my Droid EO Forum App

 

[Tennesseahawk]

If you are willing to accept $10 an hour to steer a wheel, I feel sorry for you.

Sorry, I don't go by the hour. And yes, if it meant being able to stay close to home, I would take a $10/hr job. Some things mean more to me than money.

 

[paullud]

If you are willing to accept $10 an hour to steer a wheel, I feel sorry for you.

Why do you consider it an injustice? If you were offered the same load at say $2.40/mile and you found out after that you had to use the data logger, would you still be upset that it was given away free or would the extra money make it OK? Or is it an issue because you have to have this equipment and get billed for it but FedEx feels they can just give away your money?

Posted with my Droid EO Forum App

 

[Tennesseahawk]

Why do you consider it an injustice?

Because he's being stuck-up and obstinate when a depression stares him in the face. I'd love to see the tantrum if he finds out flipping burgers is his only choice.

 

[beachbum]

One thing I have learned in the 20 + years being a O/O is that no matter what a 100k truck makes the same as a 200K truck. The only difference is the truck payments.

When I was at MATS I seen all the fancy FedEx ST's and seen how most of the drivers wouldn't give you the time of day. The exception was Linda who help me with my decision. Thanks to her I decided to go from a TT O/O to a sprinter O/O big change but it's easier on me now. I decided on Landstar and have only been out here 2 weeks, but I paid cash for the thing. Won't ever drive a class8 again