//// What are "reasonable" rates to charge ? ////

[Andyinchville1]

HI All,

Long term driver here ( technically an "employee" if you go by IRS guidelines but always get 1099'd since the hiring companies didn't want to pay employee taxes etc...it's OK with me since I get all the $$ w/o taxes coming out first) .

I recently started searching for contracts for myself (this was a result of me getting on board with a major carrier to subcontract from them and them requiring me to get my own DOT #, MC #, TWIC card, General liability insurance, cargo insurance, Umbrella policy, workmans comp. etc...

I figure if I got all this for one contract, in theory I should be good to go most anywhere AND I should branch out to spread out the cost of all the insurance over more than 1 contract..

Anyways, I got in contact with UPS and Fed Ex and a couple other major carriers to potentially get on board with them as part of their critical (I.e. Rush) delivery team BUT I do NOT have a lot of experience bidding things.

The contract paperwork is very detailed and they even want rates for sitting time etc...(broken down even to the vehicle type!...Car / mini van / van / box trucks of various sizes up to tractor trailer etc...).

For me in my town there is NOT a lot of competition in terms of other delivery companies (only 1 company in the yellow pages (no I'm not even in there nor have I gotten a website (yet))....

I KNOW some of their rates are kinda high because I had a friend "secret shop" them for rates.

Truth be known, I can continue to drive my car for $1.00 / loaded mile (occasionally with the one other company mentioned above...been doing it for years) BUT I might as well go direct to the source instead of being a sub and losing out on a chunk of the extra $$..... ( plus maybe the larger vehicles will pay substantially more $$....I already have a small station wagon (car), a mini van, extended cargo van, looking into getting a tall and long sprinter, an 18' step van and a 26 foot box truck with lift gate).

My question is, what do you feel are reasonable rates for the following (Ideally if you already do the UPS / Fed Ex, DHL and other time critical delivery deliveries for large companies that'd be great to get "insider" rates!).

1) Base charge for first 20 Miles then extra charge per loaded mile after 20 miles (separate prices for):
Car / Mini van / cargo van / 12-14 ' straight truck / 16-18' straight truck / 20-26' straight truck / tractor
trailer ).

2) Hourly wait times for the aforementioned vehicle sizes (most contracts have a "free" 30minute wait time for the smaller vehicles up to a "free" 2 hour wait time for Tractor Trailers).

3) Holiday and weekend flat rate surcharges.

4) En route stop surcharges ( extra stops)

5) Lift gate surcharge

6) Attempted delivery surcharge

7) extra man surcharge

8) Inside delivery surcharge

9) blanket wrap / protection surcharge

There were other items than could be charged for on certain carrier contracts but these were common among all the contracts.

Any insights and help would be appreciated in helping me figure the "best / reasonable" rates.... I want to maximize my income BUT NOT price ridiculously and lose business to the "other" company.

Thanks in advance for any and all help.

Andrew

 

[BigStickJr]

Should we give you our customer lists and poc list ?

Seriously, these are things you need to figure out yourself. Based on your costs and expected profit margin.

If you get no business you’re probably too high.
If you’re swamped you’re probably too low.
Adjust as needed.

 

[BigStickJr]

For $100 per hour I’ll meet you and work on this with you.

8 hour minimum.

It takes money to make money.

 

[Andyinchville1]

HI All,

Thanks ( I Think) for the responses thus far...

I understand that some folks here may be reluctant (or maybe don't know what reasonable numbers are) but I am really trying to get at lest some "feel" for what to charge...PLUS if we get some good numbers and info flowing here we could probably end up helping ourselves too (knowledge is power and potentially $$)...

Anyways,

If I charge too much I may only work in extreme emergencies (good pay when you work but not lots of work).

If I charge too little, plenty of work but maybe not make any $$ ( or worse maybe LOSE $$ BUT I won't do that since I could just bid what I am getting paid now per mile and get the work since I'm sure the other company is making at least some $$ off my work....

Bidding what I make now ensures I won't lose $$ since that is what I'm getting now BUT It would be RAISE also since I could get many more miles at that rate to boot (I'm not getting as many miles as I could since the company has to keep other drivers making $$ too or risk losing drivers and then not having enough drivers to handle the workload).

As a base, I figure I can charge at least $1.00 per mile for car work since that is what I get now from the company....

I believe I could probably bid $1.35 per mile and still make out on the car work (an actual raise!).

I had a friend call and ask for a rate for delivery to a location in the same general area / distance and I was driving and I was told the rate was $90 for one off work and $80 for regular work....This is about DOUBLE what I'm currently getting for the same basic run as an independent driver for the company).

I don't have a good "feel" for what a larger vehicle get BUT I suppose I could secretly "shop" rates from the company again....

The only disadvantage to not getting more input as far as "reasonable" rates is maybe the company is really cut throat when it comes to the rates they give the big players that throw them lots of work ( I have no real idea what their mark up is to a large company like UPS / Fed Ex / DHL / Forward Air etc....the mark up MAY not be that large due to huge volumes of work....MAYBE THAT is why they are the only other "player" in town ? .... I kinda doubt it I think they are somehow making serious $$ (nice buildings, nice company vehicles etc(they do have employees that work during the day primarily).

I recently started working with a broker (have not done runs yet) to see what rates they throw out to me as a rate per mile on my 24' truck with lift gate (their ads seem to advertise pretty high... $2 to $5 per mile less than 400 miles and $1.50 to $3.50 per mile for long hauls)....but we'll see how that goes.

I have no real "feel" for good rates on a straight truck because the only other gig I do with the straights is appliance set up and delivery for big box stores like Home Depot and Lowe's where we are paid for the day (typically flat rate of $450 to $500 per day....1 helper needed...miles vary but can be as many as 175 or so miles per day (hard to be accurate since the odometer is on and off working)....

I typically pay the driver $150 / day + tips , and helper $100 per day....insurance for 2 trucks runs about $35 per day....truck is typically 7 MPG or so (max is 10 MPG highway run empty at 55 mph).

Anybody else doing deliveries for big box stores?....what are you getting paid?

(FWIW Wayfair wants to start at 530 am and ends 5 PM avg and pays out about $500 per day...needs helper on that but I don't do that since that is too early in the AM to start hearing about problems (truck issues , helper no shows etc).....just threw that out for informational purposes.

Anyways, keep the info coming (hopefully).

Thanks

Andrew

 

[FlyingVan]

When you go independent you have some other things to worry about that you don't now. You can't bid just what you get paid from the company now. If you do, you probably will go under sooner or later. Some of the brokers pay late. Some 30 days, some 60 days, some even 90 days. Do you have the money to pay your drivers up front and wait 60 days do get paid? What do you do if the broker doesn't pay you at all? Winning loads is just the beginning.

For me, I am happy to give my company 30% and not have to worry about any of that. The work I do today I know I will be paid next Friday.

Just something to keep in mind

 

[Truckster1036]

Andrew you sound like a real smart guy are you in the midwest i need a partner here to startmaking some big bucks $$$$$

 

[Andyinchville1]

Andrew you sound like a real smart guy are you in the midwest i need a partner here to startmaking some big bucks $$$$$

I'm on the east coast but have family in Michigan...I guess that's kinda Midwest.

Ever think of moving to the East (Richmond VA or surrounding area) ? ....

I am trying to get stuff going here in a big way (have a Lowe's contract already so that could be worked on right off the bat...just need another good driver ) but I'm trying hard to land some other big contracts because never a good idea to put all your eggs in 1 basket (I know because at one time we did 5 Idexx lab runs and all of them got lost at the same time because the lab wanted another company to service the entire region whereas we only did 5 of the runs (we were never late and did the runs 100% good for over a year so it really sucked because we were doing the job right...no lates etc....I tried getting our guys on with the new servicing company but to to do that I had to get signed on with them but by then the conversion happened and they already had extra drivers in their organization...they said If I get on with them we could maybe do a CVS contract through them when they get it).

....It'd be great to have a good person to work with....

I may be headed through to Michigan because of a Sprinter truck my Uncle told be about.....

PM me if you that could work..

Andrew

 

[Andyinchville1]

When you go independent you have some other things to worry about that you don't now. You can't bid just what you get paid from the company now. If you do, you probably will go under sooner or later. Some of the brokers pay late. Some 30 days, some 60 days, some even 90 days. Do you have the money to pay your drivers up front and wait 60 days do get paid? What do you do if the broker doesn't pay you at all? Winning loads is just the beginning.

For me, I am happy to give my company 30% and not have to worry about any of that. The work I do today I know I will be paid next Friday.

Just something to keep in mind

HI,

True about potential slow pays.....

I guess I've been relatively lucky that most of the companies I work with are right on time with payments...

I do keep a buffer of $$ back in case of slow payers and have hooked up with a few factoring companies in case things get really crazy.

I do drive a lot also, so if 1 company slow pays I am still making money from another fast paying company to be able to cover for the slow payers....

I have not had the "pleasure" of a no payer.....yet....knock on wood.