Cost Per Mile?

Sinister

pari animositate
I've heard several formula for this.

Anyone know of a reliable way to figure cost per mile?
 
That is almost like asking what a person's favorite truck is, everybody is going to have a different answer and a different reason why
 
I think to come up with anything reliable you would have to average a couple years worth of total truck expense, then divide it by the average of a couple years of your total miles, like say your average yearly truck expense is $80,000 and your yearly average total miles is 115,000 = $.67 and before anybody gets the idea that WOW look at the money I could make, that does not take into account living expenses, household expenses and so on, you average that and taxes into the equation, it does not look nearly so appealing
 
I had a (ATS driver, surprise) tell me that even paying 570 a week to lease his truck still only had him at .47cpm costs. That's why I'm asking. I don't this guy is a bit off, but I'd like to guess at how he came up with that.

And I may need to know here in about 2 months or so.
 
Depends on your overhead a lot too. If you have a truck thats paid for your cpm is gonna be less than having a payment but then your repairs and maintenance will most likely be higher also. Always wondered how a new O/O would come up with these figures myself.
 
Take a reasonable miles per week x cpm + any add on,fsc,od,anything like that.Subtract your fuel and your payment and that will ballpark you.Now mind you,this is just a quick way to do this.You can go further and account for EVERYTHING,baseplates,ins,hut,maint......basically everything that comes out of your pocket to get the truck down the road.
You can do it based on the theoritical miles and project it out for a given time frame or you can figure it for every load,allowing for different pay....either cpm or a % and fuel prices in given area.
However you figure it, you HAVE to have some idea what it costs otherwise you will just be beating your head against the wall trying to make a payment every month.

Btw, the guy who quoted you .47cpm on 570 a phuckin week is out of his mind!
 
I was leased on to ATS a long time ago, never leased a truck from them though, but I know they liked to nickel and dime the lease drivers, they even made their lease drivers pay for an ATS accountant at $10 a week
 
#1 Thank you. Nerd.

#2 The guy who leases that truck for 570 a week is the same guy who is fully incorporated and takes a salary of $250 a week. That's not a red flag for the IRS. He also thinks it's normal to stay out NINE WEEKS at a shot.

Trucking is also not his first line of work, and I think this is the first company he's worked for, so he thinks all this shit's normal. A shame, really.

Nerd.
 
What formula are you using presently?

You gonna switch from leasing to buying?

Will Luke and Luara ever find happiness?
 
I don't really have anything to work with now. They take out for fuel and road taxes every week here too, plus there are deductions for maintenance account and qualcomm, etc. So I'd probably have to figure all that in also, right?

...and Luke and Laura are both men. You can tell if you look real close.
 
Absolutely,anything comes out of your pocket has to be figured.With you being on a mileage deal the only thing you can control is your costs....all your loads pay the same, so the only thing you have to judge as far as a "bad" load vs a "good" would be fuel prices, terrain,tolls and how much time you got tied up in it.
Bottom line however you fig your costs, you do need to know what it takes to get that rig down the road truckdriver.Or you could get yourself a co position with a co that pays real well,runs the hell out of ya and you wind up making an assload o' money.Let me know if you come across anything like that.Oh, make sure they have good equipment.....I'm too pretty to drive an ugly truck!
"Keen, you look good going that way"
"Driver,I look good going any direction"
 
Base on the average number of loads ran per month

All annual expense divided by 12 and added up
all monthly expense fixed and variable averaged and added up include individual idle time cost
all quarterly expense divided by three
all savings for maintenance accounts etc.

add the four and divide it by the average amount of miles run on load DH, empty, and loaded

e.g. annual totals are, say ....2750.00
monthly totals, including fuel 10,000
quarterly like IFTA 150.00
savings 500.00

totals 13,400 now divide that by average mile(should not exceed 13,500mi for individual driver) so let's use 13,500

$13,400.00 / 13,500mi= .99 cent is approximate "cost" per mile

The above is only an example and only fixes "cost per mile" and does not include desired monthly income

I do have a rate calculator online with google it fixes what the rate you should charge per mile based on how you run: I have not converted my quoting calculator "spreadsheet to public use so I haven't posted it, I'll try to do that soon.

I'll include the YouTube videos that train how to use the rate calculator for all that would like to give it a shot

Rate Calculator by Jo Bernard: http://spreadsheets.google.com/ccc?key=0AloyOIMFxJn-dE1HdkJoU3FqdmNkTEc5YnNpZGdrVGc&hl=en

YouTube video training on Rate Calculator: YouTube - The Real Deal Trucking Calculator

: YouTube - rate calculator trucking.mp4

Please let me know what you think about the calculator, thank you, Jo Bernard
 
Take your fixed cost, this was figured by ATS and is(should be) part of your lease agreement. Devide by your rate per mile. Save this number.
Figure your varible expenses. Maintenance Fund, Tires, Promissory Note, Fuel. Save this number.

To figure what you pay weekly on a monthly expense, multipy by 12 for yearly cost, then devide by 52 for weekly.

To figure how many miles you have to turn to break even for fixed cost multiply fixed cost per rate per mile.

Take your rate per mile minus your variable cost and take this number and devide it into you fixed cost per month.

This has nothing to do with your personal expenses.

Now that this is as clear as mud, I will give you my numbers. Your's will vary a little based on your fixed cost. I ran these numbers when I first started with ATS. I no longer have a Promissary Note, rates per mile changed back in August and fuel cost are higher now. It is figured on a $1.00. You can figure your own rates per mile average for a more accurate number.

Now to the numbers:

My weekly fixed cost are $610.36.

Escrow $75.00
Insurance
Contingent Non-Trucking Liability $40.00 per month.
Physical Damage $33.36/$154.00 (I opted for the supplemental ins.) per month.
Occupational Accident $155.00 per month.

Weekly $163.24

******************************
I don't understand this section:

Lower Deduction Physical Damage $33.36 monthly.
Reduciton of Charge Backs $86.52 Monthly.

Weekly Breakdown:

Auto Liability $11.68.
Cargo Liability $5.87.
Physical Damage Libility $2.42.
*************************************

Truck Payment $400.00
Federal Highway Used Tax $11.00
Transaction Fee (Fuel Card, Advances, per use) $1.25
Tax Service $16.15
Maintenance Fund $0.065 per mile.
Tires $0.0185 per mile
Promisory Note (Sercurement equipment, until paid off) $0.04 per mile.
Qualcomm Rental $60.00 monthly.
Trippak (includes TransFo) $11.25 monthly.
Prepass $10.00 per month.

My variable expenses:

Maintenance Fund $0.065.
Tires $0.0185
Promissory Note $0.04
Fuel $2.20 gallon / 6.75 $0.33

Total $0.4535.

Keep it simple and figure I get $1.00 per mile.

Miles per week to pay fixxed expenses:

$610.36 x $1.00 = 610.36 miles.

Variable cost per mile for the week $0.4535.

My break even:

$1.00 minus $0.4535 = $0.5465.

$610.36 / $.5465 = 1116.883 Miles per week. Anything over 1117 miles per week is profit.
 
Here is what I do for a minimum. Take total miles from pick up point to destination point. Divide your miles per gallon from that, I use 5. Then multiply that times 3 and that would be a minimum for general freight, now from a truckers point of view this should work. 1/3 to fuel, 1/3 to operating expense and 1/3 to driver. Over weight and dimensional is by the hour for equipment and operator (s) depending on what is needed
 
I read through all the post including mine, and notice two number always factor:

1. How much you want to make.
2 How much does it cost to make it.

First, how much you should make?

A company driver can net 3,000 a month on load responsibility
Lease Operators should net 4,500 a month on load, and unit responsibility
Running your own Authority should net 6,000 a month on load, unit and business responsibility

Why? because, twice the responsibility (headache) should justify twice the pay.

Secondly, How much it cost to make that monthly desired amount.
Cost can be figured annually, quarterly, monthly, weekly, daily, and right down to the hour, minute, and second or any combination of these variable, that's why there are so many different answers!!!

All ways of figuring cost should involve reducing "all" cost to a monthly figure naturally variable such as expense and miles "must" be reduced to realistic averages.

Now, once you know what you should make per month, how much it cost to make that per month, when you add the two you come up with your monthly total gross.

Dividing your total monthly gross by the average number of runs you make per month will give you how much you expect to gross per run.

Again you need a realistic average for how many mile you run "on average" to finally reduce how much you expect to gross per run to a price per mile by dividing it by the average amount of miles you run per load

All of this "FOR EXAMPLE"

you want to make 6,000 a month, all of you truck expense (cost) reduce to a monthly figure is 10,000: you must gross 16,000 total gross per month. you know you average 12 loads per month based on how you run your operation.

That's 16,000 divided by number of loads 12 equals 1333.33 avg. you expect to make per load. Now if the average number of mile you run on loads is 500:

1,333.33 divided by 500 is 2.66 you must earn 2.66 on all loaded miles

if your average mile are 1000: 1,333.33 divided by 1000 equals 1.33 on all loaded miles

You have to decide how hard you want to work to make what you want to make, but remember, you can only legally run so many miles a day a week a month, so you have to chose a realistic total amount of miles per month, including empty, dead head and loaded miles: you should not exceed approx. 13,500 total miles per month, Jo Bernard
 
I was just looking at the numbers..

five months = 5 x 4.3 = 21.5 weeks (or 150.5 days)

I figure 5 or 6 days of driving per week = 107 to 129 driving days.

600 miles per day (an industry norm) = 64,200 to 77,400 miles


So your lost labor claim could reasonably be from $135,462 to $163,314


Landstar figures in a perfect world similar to yours. Reality, not every mile is loaded or paid for, unless you are direct and on a specified route to have less than 1% deadhead, not going to happen with current rates. This was figured on 180 per mile and 26 FSC. I may be able to make that number with me collecting over 4 per mile and legal on miles and hours. We do not make 100000 a year in mileage, and we spend much more time on loading and unloading for what we do, I do not haul general freight, because its not going to pay and as long as the trucks running and a driver is in it, it costs me money. With variation in fuel costs, I have seen more drivers lose their ass on jobs because of fuel costs. The 1/3 thing works, you say 2.66. Would you be willing to pay that for all miles for us to haul 45000 and less, no you would not. Not when you can get someone to haul it for .80 cents. And that's what they are paying out of Colorado to haul boulders to landscape companies. 1.20 and less is the high side coming back, because of shit brokers and stupid drivers taking it. My advantage is weight capability and I use it to my advantage. Our cheapest truck is 125 per hour. That's all hours. from the time it starts to the time it shuts off back at the yard. My neighbor works for Jet Cor and use to get 1.05 all miles and was dropped because he demanded 1.10. Do the math on that. Total gross and take 50% off for fuel he didn't make 50 G for himself. That is mid west rates offered, I don't work for that. Once again I am not in general freight. That's why.
 
I still have the offer out there. Pay me 250G a year for a truck, and you own one or I will put a driver in it and run it anywhere you want, and I can still pay union wages to a driver to do it and make money. There is not enough hours, and loaded miles to pay that much, but if you are willing to pay that. I am willing to supply a truck. Hell I could buy new equipment every two years then.
 
A professional "first" knows what his/her rate per mile must be,

secondly, knows he can't get that rate in every area,

thirdly, knows he "must" make more going into a weak area (too many trucks or not enough freight) to offset what he expects to make coming out,

fourthly he masters his understanding of the market "where trucks are too strong versus where trucks are too weak,

and finally, he has the discipline to exploits the demand and supply in the market.

see also "Setting My Rate" Jo Bernard
 
I agree with what you say, I agree with what we should make, I agree with setting my rate, Problem you wont work. Prove me wrong, show your 99 showing that as a gross for one truck. I know some can do it and I have. But not today with the rates. If you do get a high pay, you most likely won't collect. Been there done that to. If you are direct with shippers and receivers, you have a chance. But independents working through brokers will never make that. The rates are to low after the broker takes his cut, and the shippers and receivers are now on a scam of damged goods that the driver is responsible for.

1970s, regulated trucking, no one liked it but you made good money. $1 per mile and $1 per gallon of fuel the 1/3 deal worked with a plus to the driver. Today non regulated, going high $1.50 per mile and $3.00 + per gallon of fuel, basically 50% to fuel and truck and driver now split profit.

Last week highest offer in to haul to Florida, 2.41 per mile all to truck. nothing coming back out of there for RGN. My RGN will not move under $5 per mile. So I sit. Ass Hat TMC who is broke and government subsidized is hauling for $1.75 plus FSC, so $2 per mile. I am insured, TMC is self insured. No comparison at all. If I screw up, I am covered, If they screw up, Its years before anything gets done.

Until the governments bed partners get out of this industry, Independents are doomed to fail at some point, Non payments, tickets, Insurance claims for damage, Higher insurance costs and fuel costs and repairs. The big companies are subsidized on.

When the field is level again, and all trucks have to follow the same rules. Big companies will bow out, because they are going broke and would be if they didn't get the government subsidies.

I will guess the average plates, insurance per truck at 1 Mill is around 15G per truck to start. Make the big companies pay that. You will see all the trucks for sale
 
If you do get a high pay, you most likely won't collect.

I've only had one broker deny me my pay and I kept after them and they finally paid it, I'll run a load on any broker my factoring company will factor, that's why they get a cut, to make sure I don't get the sleaze bags.

The rates are to low after the broker takes his cut
Last week highest offer in to haul to Florida, 2.41 per mile all to truck.

I'm always quick to pick up on certain patterns: notice "broker 'takes' his cut" notice "highest 'offer' to haul"

It is true, that when you are in an area where the trucks far out number the freight the broker "takes" but when you master your market and know when the trucks are weak "you" have to do the taking. When you're in a good market (trucks weak and there's freight that needs to be moved) there must not be a concept of the broker "making an offer" you tell them what you charge and you're not taking a dime less and you get written on the rate confirmation what you want written on it. WHY?

Because market drives everything and while I know the market hasn't been the best, can you say with certainty there is absolutely no expedited freight anywhere? if so, then why are the expedited companies still in business? its not because they have all these high class connections of companies that just love to pay out of the ying yang.

Good friend of mine challenged me on this when the market was at it's lowest like 1st Qrt. 2009, said he didn't mind if the company paid him significantly less: so I got on the phone and call up the expedited company he worked for and posed as a company getting a quote (as I've done many times before) quoted like 500 miles or so: Them so in so's quoted me a whooping $4.91 a mile!!! so help, that's no exaggeration;

So I know from that and personal experience of consistently getting my rate; if you find where the trucks are weak, post your truck, and take command of the quote and be prepared to miss a few- without fail you "will" get your rate, even in today's market.

I would say, most weak area aren't worth fooling with, running round trip rates (like $4.00 mi) is not only possible, it's really (to me) the only practical way to run.

Finally, waiting on the hot runs "IS NOT FOR EVERYONE" I accept that and I respect that, and would add, it's not always what I want or choose to do, but that is primarily the only way I've run.
 

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