Rates in the Summer season...

[Bored Insane]

I heard there are more freights in the summer compared to winter season, thus the rates go up a little. I do see more freight, but not so much the rate. Is this normal? How is this year (2017) compared to prior years? Do you think the rate and the # of freights are increasing? What about a prediction for 2018?

 

[mndriver]

Don't know what to say. But you are correct in your observations.

 

[Bored Insane]

I'm just repeating what you guys have told me before, but wanting an update for this year. I did only started this year and have no clue what happened in the years past.

I was never told what the company was getting as far as the rates go (except for the last company I drove for, I asked for the rate he was getting for 3 months that I was there). I'm sure Swift even lost some money on small contracts just to run the trucks and keep the drivers busy. The rates Swift got can't be much better than say, $1.85 a mile.

Echo, CH Robinson, Landstar, TQL, etc... i.e., the big players have lots of listings for freight, but they don't necessarily have the best rates. I've seen the reverse mostly (the big guys have one of the lowest rates).

I take it the rates don't fluctuate too much from year to year? (other than inflation, price of oil change, etc.)

 

[Bored Insane]

I did forget to narrow down or make distinction on what kind of freight. Of course, I'm looking at Flatbed rates, but relative difference can't be different between different kinds of freight.

BTW, I see the benefits of pulling a van (not yet on the refer), but the maintenance can't be better than flat bed...

 

[mndriver]

Each trailer has its own seasons and rate trends. Figuring them out is the fun part.

Recently, steps had been hot in Minnesota. Not so much recently. Produce is still 3-5 weeks out for Minnesota for reefer and done for the moment in Florida.

It's spotty and tracks lots of seasons really.

If it's one thing.....

Semper gumby.

Always flexible.

What works this year isn't likely to change next year, but don't count on it being the same either.

 

[ironpony]

(not yet on the refer)

Its spelled REEFER.

You might want to pay some attention to this blog...

Rates & Lanes Online Radio by Rates and Lanes

 

[Bored Insane]

Each trailer has its own seasons and rate trends. Figuring them out is the fun part.

Recently, steps had been hot in Minnesota. Not so much recently. Produce is still 3-5 weeks out for Minnesota for reefer and done for the moment in Florida.

It's spotty and tracks lots of seasons really.

If it's one thing.....

Semper gumby.

Always flexible.

What works this year isn't likely to change next year, but don't count on it being the same either.

I was making note that my narrow view of flatbed rates that I got was better (average) in the summer times vs. beginning of the year (or even prior w/ other companies I drove for). I heard that there's more freight (in general) in summer than in winter. I can assume if I did refer, I can follow the season changes and go to the area with more work (across the US) if I choose to. It would be nice to switch trailers and try them out as the work changes.

 

[mndriver]

Open deck kind of follow the construction seasons really.

Reefer will follow the produce seasons. You need to follow the USDA listing religiously to really know what it's doing.

@JunkYardDog5958 and I are looking to get rid of reefer and get open decks. Has more to do with the FSMA and the risks involved that I do not have the level of tolerance for their stupidity any more.

I'm not looking to haul building materials in Minnesota in January. So the hit to leave the area is going to hurt.

As well as the equipment won't be moving in winter for farmers or construction until the seasons are right.

All things to consider.

 

[Bored Insane]

As I was comparing my rates from this month to last, I made a significant improvement. BUT having said that, I'm spending days not working because I'm looking at/ wanting higher rates. I think you guys mentioned (@Mike , @mndriver , and others) that going after higher rate is better than just taking lower rate work. I have decided not to take a low rate jobs and wait a day for a better one (but it's not easy when you just want to go home). Not that later rate is much better, but I won't accept rate that is close to 1.50 or lower. Am I making sound decision? I have the urge to just drive (w/ low rate) than sit still at POS town, but just can't work for free...

 

[mndriver]

what are your daily fixed costs?

The number I use is $400 per day. I have to earn that per day for 19 days of work for the month to pay ALL of my fixed costs. I can do that in one straight shot, a 9 day week, a 10 day week. However I want to break it down. If I can do it in LESS time, then I just go home. Or I can take more time off like in July where I am going to take 2 weeks off for the holiday and parenting time with my daughter

my fuel and maintenance adds $0.50 per mile expense.

So that load that pays $1.39 per mile might actually pay MORE profit to you than a series of "good paying" $2.10/ mile freight.

Had a dispatcher put a load on my truck. "But it pays $6/mile." Paid $650 to go 110 miles It looked great. Until you realized that it loaded Saturday and didn't final out until Tuesday late afternoon.

Load should have paid no less than $1900 for the amount of time on my truck.

 

[Bored Insane]

Yes, I think I understand what you're saying. I don't have numbers down to 'per day' basis, but maybe I should. I have a 'goal' of $500/ day as a general number based on my recent performance, but I don't reach it every day. I don't think I have enough data to have a good per day numbers or a minimum per day number. I have worked different amount of days per month, so this is a wrench in the average (due to truck repairs, family issues, etc.)

 

[Bored Insane]

So to give my specific numbers: my fuel cost is 40 cents, but my repair cost is 79 cents (based on the recent past, but this could be far lower going forward: I hope)
This already puts me in $1.20 range just for those costs, not to mention the truck & insurance costs. Thus my reasoning for rejecting anything near $1.50 rate. Luckily, I've been getting better rates recently, but with 'down time cost' like in @mndriver 's example, the rate should be higher to reflect some 'opportunity costs' or to run which will lower the 'down time cost'.

 

[mndriver]

historically, It's about 14-16 cpm to have a maintenance fund for a truck. It just goes into the savings account and sits there for when you need it. I'm sure you've realized by now, some months you get off cheap. Other months you wonder what the hell hit you maintenance wise.

All the other stuff, Insurance, Truck, phone, salary etc. THAT is the big number you need a month. Say $8000.

Office workers for a company work 20 days a month. Four 5-day work weeks. That's where I come up with that number. Just how it is. If the office puke is going to only work 20 days, why should I work more than that?

So that $8000 has to be earned in 20 days. That's a minimum of $400 per day.

So a load is looking to pay you $4000.

You pick it up on Thursday, it delivers on Tuesday Morning. It's on your truck 5 days. It's got a miles of 2900 miles. Your Maint/fuel is $1500. Your Daily rate is $2000. So that load needs to break even at $3500. You are making $500 profit. on that weekend load.

Consider having three $800 loads for that same 5 day period. They have a 370--390 mile range each load. They are also Frozen.

reefer costs are $50/day.

Your maint/fuel is $600. Same $2000 expense. Reefer is another $250. So it's $2850 expenses on $2400 revenue. You are in the hole $450 for the same period.

Which are you going to haul.

The long miles works out to $1.39/ mile. The short stuff is about $2.10/mile.

 

[Bored Insane]

...All the other stuff, Insurance, Truck, phone, salary etc. THAT is the big number you need a month. Say $8000.
Office workers for a company work 20 days a month. Four 5-day work weeks. That's where I come up with that number. Just how it is. If the office puke is going to only work 20 days, why should I work more than that?...
The long miles works out to $1.39/ mile. The short stuff is about $2.10/mile.

Thanks for breaking it down. I got it now. It's a good point.

 

[ironpony]

Thanks for breaking it down. I got it now. It's a good point.

Do you subscribe to a load board with good lane analytics?

If you're holding out for north of $2/mi in a lane that averages $1.10, you're going to be sitting a long while.

 

[Bored Insane]

Two things;
1) isn't 2000 per 5 days (400/day) includes your pay? or profit? or is this calc with a driver (not yourself) in mind?
2) reefer cost 50/day is not included on the long haul? if it is, it would cut down on the profit by half.

 

[mndriver]

Long haul was a dry load. No reefer needed.

The daily overhead of $400/ day includes money for your salary. Probably where a lot of entrepreneur's make the biggest mistake. You do still need money to live on.

Pay yourself.

 

[Bored Insane]

Do you subscribe to a load board with good lane analytics?

If you're holding out for north of $2/mi in a lane that averages $1.10, you're going to be sitting a long while.

I had for first month, the lane rates and ratios of trucks to loads. But I cancel the service because I thought I can sense the ratio and negotiate the rate on the spot.
I agree it helps when you want to get to a place, but I try to play my advantage of going into the 'right' place.

I don't think many truckers likes to sit, because mentality is: 'miles equals money'. I'm same, but I also like to have high rates.

 

[ironpony]

Miles = money only works on mileage contracts.

You have no idea what's those metrics are going into market without the same information the brokers have. You're likely leaving a good deal of money on the table.

 

[Bored Insane]

I have my own experience like this too, I ran for 29 days of local runs with average rate of $2.39/ mile. Then I ran inter-state runs for about the same days and got higher total revenue with 1.79 rate average. Per day revenue minus the fuel cost was slightly higher with inter-state runs than local runs. I did lots more of physical work with local runs, but the plus is I got home every night to my family.