What is a fair rate for a dry van?

[lavenderhearts]

Hello everyone,

I am new to this forum website. I want to rate my dispatching skills but I'm not sure how to score them. I saw on one website that Dry Van drivers were getting $1.92 per mile. My driver wants $2.50 per mile or more. Which I usually get between $2.00 to $2.50 a load. When I first started working, freight that would be $600 is now $500 to $450. Why has the rate of freight changed? Or am I'm not a good negotiator? I've been working for a year for a driver who has over 20 years of experience and I have learned a lot in my one year. I want to know why has the price of freight changed so much over the months?

 

[mndriver]

It's been on a downward spiral since 2015.

 

[mosinee dave]

Where are we talking about? What corridor? What he wants and what the world is paying is two different things I want 5.00 a mile but then I wake up from my dream

 

[frozesolid]

Potential driver wants their CDL. Today's 2 most common paths to that are 4 week driving schools or company sponsored training. Usually gonna wind up with one of the larger carriers to start out with either way.

Larger carriers drive down prices by having volume and paying new drivers chump change to move it.

After a while, new driver learns how to handle the rig and learns some lanes, says "screw this crap company", I'm buying my own truck and trailer!

New business owner doesn't know much about running a business. Bills be piling up, gotta take anything they can, price be damned, to keep the repo man, tax man, foreclosure man, angry significant other........at bay.

Cut throating happens in a lot of businesses, not just trucking. Nobody goes new roof shopping for the fun of it. It's seen as an unnecessary evil that consumer suckers are going to go with the cheapest quote regardless of the service they are going to receive.

 

[mndriver]

Potential driver wants their CDL. Today's 2 most common paths to that are 4 week driving schools or company sponsored training. Usually gonna wind up with one of the larger carriers to start out with either way.

Larger carriers drive down prices by having volume and paying new drivers chump change to move it.

After a while, new driver learns how to handle the rig and learns some lanes, says "screw this crap company", I'm buying my own truck and trailer!

New business owner doesn't know much about running a business. Bills be piling up, gotta take anything they can, price be damned, to keep the repo man, tax man, foreclosure man, angry significant other........at bay.

Cut throating happens in a lot of businesses, not just trucking. Nobody goes new roof shopping for the fun of it. It's seen as an unnecessary evil that consumer suckers are going to go with the cheapest quote regardless of the service they are going to receive.

Let me guess.

You have a definition for "cheap freight"

 

[Ranger_375]

I do, it is anything that falls below the combined per day and per mile expenses, and desired pay, is cheap freight.

 

[frozesolid]

Let me guess.

You have a definition for "cheap freight"

There is no definition. Without analyzing whomever's numbers, there are too many variables.

The bumper sticker should read "Say No to Operating Your Business in the Red"

 

[Injun]

The bumper sticker should read "Say No to Operating Your Business in the Red

 

[mndriver]

There is no definition. Without analyzing whomever's numbers, there are too many variables.

The bumper sticker should read "Say No to Operating Your Business in the Red"

business 101.


even a 10 yo with a lemonaide stand knows that

 

[THBatMan8]

You guys just described why I rarely pull vans anymore. Yes I'm a company driver paid by the hour, but if my employer can't make a profit with me then they operate in the red or cut me loose. I won't pull a van and my dispatcher won't put me with one unless we/I can make a profit.

 

[ironpony]

If you own a truck you should already know what you need to gross in order to make a profit. If you don't, get busy. If you don't know how, you'd better ask for help, or go back to being a company driver.

You should know...

Gross revenue per week,
Gross revenue per day and
Gross revenue per mile.

I'm using the term "gross revenue," because what a shipper pays you to move a load is not what goescin your wallet.

Those three numbers above should be properly looked at as minimum targets for your business. Its formed of your fixed costs, average variable costs, presumed tax load and your salary. Especially your salary.

In going into any negotiation with a shipper, you should have three numbers in mind.

Your WOW!!!! price,
Your price that meets your gross revenue expectation and
Your walk away price.

There's nothing wrong with setting your walk away at your minimum necessary gross - just adjust the other two prices up accordingly.

Never open a negotiation with, "How much is this load paying?" At that point you're done, and the other party has staked out a fixed position. Ask questions about the load, find out what's important to the other party before opening the bidding, and make sure you set the opening price. Use those points that are important to the other party as bargaining chips in order to get a better price. Never give anything away without getting a concession in return. You want to open high (WOW!!!!) because the settled rate will most likely be south of there.

If the counter bid is below your walk away price, do what you can to raise it, but never go below it - unless you're doing that to get a foot in the door somewhere - an introductory price. Retailers call that a "loss leader." Make sure the other party knows you expect to do better on other business if they're satisfied with your service.

Information is power. On another thread someone was looking for free access to brokered loads. I think that's the wrong way to go about negotiating for freight. DAT and Internet Truckstop both offer informational tools that give you an edge in negotiations. It will cost you to purchase that information.

If you start by knowing what a lane has paid on the average for the last 30-days, then you have a ballpark number for what a broker will settle for. If you go in looking for 100% over average in a market saturated with empty trucks, do y'all think you're going to get it? ($1 per mile average, asking $2 with 10 empty trucks for every available load?)

Ain't gonna happen. There's probably 10 hungry mothers out there that will settle for 80-cents.

On the other hand, if that $1 average is out there, asking $2 with 10 loads for every available truck will probably get you a better than average rate out - with persistance. Advertising your rate on the load board is always a good idea. That's the power of information, and you're not going to get that information on a "free" load board.

So whats a "fair price?"

One that meets your gross revenue requirement. Only you can answer that. A guy who doesn't have equipment payments can always undercut someone with a hefty payment, and still make a handsome profit.

 

[Mike]

Knowing how to operate with a profit goes deeper than many realize.

A truck owner, with a fully paid off truck, may feel like there is plenty profit being made, but may very well be failing to put back money for that eventual equipment replacement.

Truck owner builds contracts with customers, making a comfortable profit, then it suddenly is no longer justifiable to keep repairing the old equipment.

Truck owner didn't put back additional money to cover this cost, and is now suddenly scrambling and trying how to figure out how to make a truck payment and wondering where that profit went.

A true business profit plan has these costs projected into it.

It's at this point where you realize just how tight the profit margins are in this industry, and it's at this point when many truck owners are having remorse for taking those cheaper loads over the previous 4-5 years, thinking they were making plenty profit.

A true profit plan will hopefully allow you enough to make payroll, pay off your initial equipment investment, and by the time equipment needs to be replaced, cash on hand to actually purchase that equipment, rather than resorting back to operating the business in debt.

Operating in debt puts pressure on you to take less than you want because you have increased expenses. If you survey the business owners out here, you will see that those operating with no debt are pulling in higher rates than those making truck payments. Profits are higher for those folks, and the pressure on them is much less.

I have a truck that I bought new. Still slaved to the payments. Because of this, I tossed thousands of dollars into the trash due to finance charges. It's definitely not the way to do this long term.

 

[mndriver]

If you finance equipment, you have to almost make double payments as you should be planning for the eventual equipment replacement.


Partly why full service leases have a draw.

 

[ironpony]

Most truck owners are one major repair from being company drivers again.

...and they don't have a clue about what it costs to run a load a mile down the road.

 

[mndriver]

Define a "major truck repair"

 

[Mike]

Most truck owners are one major repair from being company drivers again.

...and they don't have a clue about what it costs to run a load a mile down the road.

That, and.......

There are only a couple factors that make the operating costs different among truck owners.

Payroll? What do you pay yourself and others?

Equipment. This one, I think, is really not much different for anyone. Some buy new and maintain, others buy old and replace a little more often. In the long run, equipment costs likely average out pretty close for one to maintains either option well and uses their head when making purchases.

In the end, we all need to be demanding good rates. I don't see any point in running out here simply to chase a paycheck.

 

[ironpony]

Define a "major truck repair"

I know a number of guys who were beached for $15k - $20k+ last year. A couple of years ago a gal who moved over to Landstar ended up throwing in the towel over a series of six or so repairs in the range of $1k to $2k, on sn older Cornbinder. Landstar put her in a '11 Petercar that immediately took a dump. That was the end of her money.

 

[Mike]

I know a number of guys who were beached for $15k - $20k+ last year. A couple of years ago a gal who moved over to Landstar ended up throwing in the towel over a series of six or so repairs in the range of $1k to $2k, on sn older Cornbinder. Landstar put her in a '11 Petercar that immediately took a dump. That was the end of her money.

Those repetitive smaller repairs can be worse than a major Engine or Transmission replacement. Repair costs may actually be a bit lower, but he downtime piling up can be a killer. Simply another reason you want to reach a position of working "debt free" as quickly as possible.