So You Sit or Do You Move? Try This Decision Aid

[ATeam]

Situation:

You deliver a load on Friday afternoon in a slow freight area. If you stay put and wait for freight, it is not likely that you will get a load out until sometime next week. It may be Monday. It may be Wednesday. You do not know.

You do know:

- You have fixed costs to pay every day of the year, whether your truck is moving or not. These include insurance, Qualcomm fees, truck registration, truck payment (if you have one), depreciation, etc.

- You have variable costs, over and above your fixed costs, every time you move your truck. These include fuel, tires, oil changes, tolls, etc.

- In other words, you know it costs you money to sit and wait for freight, and it costs you even more money to deadhead to a busier freight area.

What Do You Do?

How do you decide? Of your available options, which is the most profitable? Or, if all available options are money losers, which is the least costly?

Our Sit vs. Move Decision Aid

Diane and I have developed a spreadsheet to use when faced with the sit/move decision. It is pictured below. A live version is available here, free of charge, that you can download, use and modify as you please. If you mess it up, don't worry. You can download another copy and start fresh. (Personal use only, no republishing or redistribution in any form. Copyright 2011, Phil Madsen. All rights reserved).

Your Cost Assumptions

Two key numbers in the spreadsheet are the $100 cost per day and $1.00 per mile cost to drive. The $100 per day number was taken from industry literature. It is commonly used to describe the cost to sit. The $1.00 cost per mile number is more of a place holder.

I have heard credible people argue costs per mile ranging from $0.44 to $1.35. We do not need to have that debate here. Simply substitute whatever number makes sense to you for the $1.00 placeholder shown. So too with the cost per day number. The table will instantly recalculate using your numbers you enter.

Other Considerations

There are of course other considerations that go into a stay or move decision. If you have family in the slow freight area or feel you need some time off, you may be content to stay for a week. This spreadsheet shows financial consequences only. Additional considerations lie beyond its scope.

The red dots and tab referenced in the table title do not appear in the image below. You will see them on the live web page.

I'd appreciate any constructive criticism you care to share. Thank you.

 

[jjoerger]

Very interesting.
Have you tried it out yet?

 

[chefdennis]

Since Load 1 pays us to sit for 2 days, then pays for the move after that, I sit for the 2 days, take the paid move after that and start over...

Now, that being said, If as you stated, this is on a Friday, chances are real good I will moveas soon as I drop to a good place to eat and enjoy the weekend...I have been known to DH 200 miles for dinner on a regular basis.. and thats not going home either....oh and then I get paid to wait ....

 

[ATeam]

Very interesting.
Have you tried it out yet?

Yes we have.

 

[lugnut1]

Deciding to move your truck should not be based on an “aid”; But rather upon known freight movement information. Your “aid” try’s to determine the outcome of where the freight will be based on only known operating cost. Rolling a pair of dice would work equally as well as the “aid”.

 

[geo]

that is good looking program
when i was with fedexcc i had a program on laptop , mark each pick up, so next time when i was in that area i could see what and where it pick up to see if i would stay in that area or move

you have to keep records so you will be able to make good decision to move or stay

also check to see how many trucks were in area and stay in area where it makes you the nearest unit to pickup
that where records come in play

also look where all express centers are so when they run out of trucks you are next one called

 

[Monty]

That planner looks "good on paper", but in the real world, not so much.

A lot of decisions are made more from my gut feeling, more so than stats.

I think each and every decision must be made in that fashion. To many variables in this industry, and in life it's self.

So far my gut has served me well. But then I have years and years, (yes, I'm old ), of experience to call on.

 

[jjoerger]

I tried it out using a few different scenarios. It would be very helpful for someone that has been with there company long enough to know the freight lanes and have some historical data to use.

There are a lot of ifs to consider. An example: If I was sitting in Orlando with 5 other trucks and I decided to move to Atlanta I would probably get loaded on Monday. If I stayed in Orlando it would probably be Tuesday or Wednesday. So if I moved and if I got loaded on Monday how would it affect me financially?

It's a nice spreadsheet to use to help when considering different scenarios.

 

[ATeam]

The tables do not replace gut feeling or informed probability (as Geo described). They support it.

They do not tell you what to do. They illustrate the financial consequences of doing whatever it is that your gut, past freight center experience, the meal 200 miles away, family visit or something else is telling you to do.

The tables begin blank. You fill them in as best you can, using whatever method you choose. Gut feeling might tell you how long to sit or when to move. Informed probability might tell you which of three possible express centers is the best one to choose. A dispatcher, agent, mentor or friend may tell you about a load that picks up 300 miles away in three days and that you can have it if you want it (giving you a fully known and predictable option).

The tables do not account for all known variables and decide what the scenarios are. You do. Notice the title. The tool is not a decision maker. It is a decision aid. The tables are not used to make decisions. They are used to produce financial information that can be added to the mix of all known information (including gut feeling).

Diane and I are not casual expediters. Expediting is our business; our career. We care about the money and try to make the best decisions we can as often as we can. The tables are useful in that regard.

 

[60MPH]

Don't take a load to a known slow area unless it:
A: covers 4 day's of fixed expense's plus op cost for the load.
B: load pays enough to relocate to a better area, at full op. cost and you have the hours to do it, of course not a problem for teams.
C: goes by the house and I want hometme, which is rare.

This is how I do it and it works for me. Takes discipline but it does work, that is also why I don't usually take long loads because they leave my service area and in the long run are not worth it. Having said that I did go to NS. on Monday but the load paid for 100% DH back to my service area. So this 1 load made my week and it only took 2 days to do.

 

[greg334]

Isn't this a copy of a load go/no go aid that has been floating around for a while?

I'm siding with Lugnut and others. Part of the overall problems in this niche market is the secrecy of the freight and the need for dispatch not to be too proactive in tapping into the freight they can or already have.

For example, FedEx has freight in every market and pretty much every thinkable location within the lower 48 but how much of their fleet sits and how much are moving with loads that are taken not to relocate but to fulfill the customer's needs at a premium rate?

LS is another example, the need to move means to me that one has exhausted their search for work through agents and given up on finding the work that sister agents may have - flat bed work that can be loaded into a box truck is one such way to produce revenue but it is overlooked when searching. Sitting in Atlanta for three days may not be the fault of the system as it would be with FedEx but that of the driver who fails to use the resources needed to find revenue.

 

[lugnut1]

Phil your “aid” in your view is useful, but it is useful? You’re trying to create a theorem with too many variables, thus your theorem lacks a concept of proof other than your word/gut that it works. For your “move or not move” theorem to work you need more true statements. Your aid demonstrates a trivial theorem and contains no surprising insights.

We use a searchable data base configured to result four choices for any place we drop freight. Enter either zip or city/state and four zips or city/states in the data base and results are given in order of highest freight volumes with each result giving freight further order defined as to type, ltl, express with volume numbers. The data base is referencing more than 28,000 shippers and their known freight habits.

Without getting to deep into the math, the results we view from the above database we loving call “freight genie” for aiding in moving or not to move is far from perfect as the traditional logic of an axiom in our formulas will have increasingly degrading results due to a host known variables. Simply put, results are a probability.

Might I suggest you devolve your focus from “We care about the money” to enjoying your day.

 

[bobwg]

Weather forcast is also a important factor for me especially in the winter as to stay or move. Delivered in Baltimore last winter on a Friday they had winter storm warnings for the weekend, I turn the Sprinter to the South and headed for the Carolinas

 

[Brisco]

Interesting Chart......

I kinda like it, But.....

Whole thing is theoretical of course.....

Just can't cover every issue that comes up in that one little made up chart. 2 deciding factors mentioned here already are Location and Weather Conditions. (weather never came to mind until mentioned above - Thanks bob )

How many other factors have not been mentioned yet...............

My opinion..... this is just like a PHD Candidate trying to over-simplify a Janitors routine when it comes to mopping floors by coming up with "charts" on what's the best way to hold the mop handle while mopping. (not that my opinion really counts )

I'm quite sure there are hundreds of Expeditors right here on this board that are doing quite well in the "should I stay or should I relocate" department without the self promoted chart above.

 

[jrcase]

I know I don't post a lot on here and I may be out of bounds here by saying this but..... Why all of the harshness against Phil? Is there some bad blood I am not aware of?

The way I see it, he posted his aid for someone that may find it helpful. Primarily newbies. I don't know anyone this board including Phil (other than reading his blog) and I may not be in the loop so maybe there is a history I am not privy to?

 

[lugnut1]

I know I don't post a lot on here and I may be out of bounds here by saying this but..... Why all of the harshness against Phil? Is there some bad blood I am not aware of?

The way I see it, he posted his aid for someone that may find it helpful. Primarily newbies. I don't know anyone this board including Phil (other than reading his blog) and I may not be in the loop so maybe there is a history I am not privy to?

I think all the comments, excluding yours, are about the usefulness of his “aid”, not about Phil or his usefulness.

 

[highway star]

I think all the comments, excluding yours, are about the usefulness of his “aid”, not about Phil or his usefulness.

I agree. Phil has a genuine desire to help his fellow expediter, but I think this one is over thinking it just a bit. It really is a roll of the dice out here. You can make a decision based on every bit of good info you have, and it can just blow up in your face. Then sometimes you just fall bassackwards into a good thing. It looks like a weekend in Columbus, Oh. for me, a place most would consider a good place to be.

 

[tumbleweeds]

that is good looking program
when i was with fedexcc i had a program on laptop , mark each pick up, so next time when i was in that area i could see what and where it pick up to see if i would stay in that area or move

you have to keep records so you will be able to make good decision to move or stay

also check to see how many trucks were in area and stay in area where it makes you the nearest unit to pickup
that where records come in play

also look where all express centers are so when they run out of trucks you are next one called

We do something similar using the phone system and going back 3 weeks to see how many loads get sent out. We also keep a list of every express center and have listed the ones that have weekend loads from time to time. It has served us well so far.

 

[OntarioVanMan]

And really pay attention to the location thread...the same cities areas keep popping up....When it is slower I'll hover around major cities to up the odds....or I'll center myself between known freight areas so I can chase it down...always try to leave yourself an option plan...You have to sell yourself. make dispatch see you....try and be in the optimum position...THINK....there is a time to move and a time to drop anchor.....more time then not it comes down to "gut" feeling.
Phil has stated he does not believe in luck...

 

[greg334]

It really has nothing to do with Phil but as Lugnut said that its a theorem and that's all.

Regardless what people want to think, knowing past performance of freight-lanes is no real guarantee of present freight revenue unless one wants to step out of the box and think beyond the "expedite" thing.

There is a governing factor involved with all of this, your carrier. If your carrier is not actively looking for freight to move trucks, but rather looking to capture top dollar revenue, then you will sit anywhere you land. AND with that, you as a contractor DO not have the right information to make this little spreadsheet useful, even at LS.