I am using multiple load boards until I build up my customer base and also until I decide just which type of trailer I am wanting to purchase. Right now, and for at least a month, I am power only. I am questioning how to bid a load without a trailer. For example. Right this moment DAT load board gives the rate from Kansas City to Salt Lake City, UT as $1.95 per mile. That is a general rate based over the last 90 days. It is based on Van rates. My question is if there is a load that is power only and all I have to work off of is a Van rate what kind of discount would you have to give for Power Only? I see a Power only trip pulling a flat bed to Idaho with a flatbed rate at 1.91. Do you just bid it like it is your trailer or what? Thanks for given me, a poor, struggling trucker a helping hand.
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Trailer Transit has what looks to be a good deal for owner-operators. It's not a load board though. They advance you 50% upfront on each trip.Last edited: Aug 23, 2016
- let me know what you hear. Ive wondered the same thing. I have never heard of what power only pays and i am very interested!I am using multiple load boards until I build up my customer base and also until I decide just which type of trailer I am wanting to purchase. Right now, and for at least a month, I am power only. I am questioning how to bid a load without a trailer. For example. Right this moment DAT load board gives the rate from Kansas City to Salt Lake City, UT as $1.95 per mile. That is a general rate based over the last 90 days. It is based on Van rates. My question is if there is a load that is power only and all I have to work off of is a Van rate what kind of discount would you have to give for Power Only? I see a Power only trip pulling a flat bed to Idaho with a flatbed rate at 1.91. Do you just bid it like it is your trailer or what? Thanks for given me, a poor, struggling trucker a helping hand.
That lane average info is useless, worthless info. Outdated, old info. Lane rates are stable in some places and might change daily in others. It'll be up to you to figure out how much you can charge.
Load outs aren't going to pay much more than $200-$300 no matter how far they go, sometimes even less. And $2 a mile on a power only is usually a wild gamble that loses on the other end. I've got my own trailer so the power only moves I make are only when someone seeks me out.
The rate I charge is according or they can move onto the next phone call. Being in a situation where you are dependent on power only is a different matter. Because more often than not off loadboards PO is dirt cheap.
Last week I did a power only Amazon load one way from Lebanon, TN to Kenosha, WI that paid $2.50 a mile. For me that was a bottom of the barrel move but seeing as it was that or bobtail up there unpaid, or take a cheap load out, or cheap brand new trailer from a factory in Indiana up that way, well it was actually an OK move that worked to my favor. I think most times it would be a loser though.
I would not want to depend on load boards for 100% of power only moves. Good luck.
For all practical purposes and assuming you have something lined up on the other end to fit into the equation , I would bid whatever the going van rate is if you want to be profitable. That's assuming they are not ridiculously low in that area. In reality your operating costs arent going to be much less at all pulling someone else's trailer.
He'll probably win every time bidding like that. And in theory it sounds good. Have you ever looked at power only before though? The trouble is more often than not there's going to be zero reload possibilities close by. Sometimes there won't be any within 500 miles depending where he is. What it means is he'll be running around quiet often for what ends up being about $1 a mile or worse. I mean if he is going to book loads based on DAT averages and they currently have the national van average at $1.65 or so, that's really ugly. I would say again whatever you do learn a few of the same market areas and you won't ever think about what DAT consideres a lane average. You'll be charging based on real need in the moment and not some questionbable possibly flawed data someone else with their own motives entered into a system.Last edited: Aug 24, 2016
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Chris Henry runs fleet profitability benchmarking and analytics for FreightWaves and facilitates the TCA’s TPP program. If you are interested in benchmarking your fleet’s performance with the best operators, join TCA’s TPP.
The data presented in this article come from analytics of over 230 truckload for-hire fleets, representing more than 70,000 trucks.
A wise trucker once said, “The only way to make money in trucking is to not spend it.” Truer words have never been spoken. This business is a game of razor-thin margins, and an infinite (and growing) number of risks and curveballs. This article is the first of two that will: 1) breakdown the cost components of operating a truck (and a trucking company); and 2) establish a financial framework for improved margins and bottom lines.
It’s very difficult for trucking companies to achieve higher than average rates per mile, per hour and per week. Due to low barriers to market entry, fleets and operators of all sizes are able to add capacity very easily to the market. As a result, shippers benefit from these hyper-competitive effects with rates that don’t typically capture the expense realities of trucking.
Total operating expenses in trucking (excluding very specialized operating models), range from extremes of $1.16 to $3.05 per mile when you simply take the best and worst from each of the categories below. Realistically, no trucking company could achieve an average total operating cost per total mile of $1.16, nor would they survive at $3.05 per mile. However, this article will illustrate the wide variances, and opportunity costs that operators realize on a day-to-day basis.
As the main pricing mechanism for trucking is the mile, it is important that industry participants understand their expenses relative to the miles generated by their trucks in a given week or month. Doing so provides an easier methodology to match operating expenses with pricing decisions.
Total operating cost per mile summary table
According to the Truckload Carrier Association’s TPP fleet data (available to TPP members and SONAR subscribers), a for-hire truckload carrier will average between 1,700-1,900 miles per truck per week throughout the year, except for December.
Average operating expenses for a carrier on a per mile basis:
|Expense Category||Low Range||High Range|
|Driver Compensation||$0.48 per Mile||$0.83 per Mile|
|Fuel||$0.40 per Mile||$0.55 per Mile|
|Equipment Financing||$0.00 per Mile||$0.40 per Mile|
|Maintenance||$0.09 per Mile||$0.40 per Mile|
|Insurance||$0.06 per Mile||$0.18 per Mile|
|Variable Driving Expenses||$0.01 per Mile||$0.09 per Mile|
|Non-Driver Compensation||$0.06 per Mile||$0.30 per Mile|
|Fixed Overhead||$0.06 per Mile||$0.30 per Mile|
Source: Truckload Carriers Association TPP Program for all carriers in the program. Data is available in SONAR.
Driver compensation ($0.48-$0.83 per mile)
A disclaimer – for independent contractors (ICs), driving labor does not equal ‘profit.’ The most successful ICs pay themselves a market wage in addition to projected profit. Whether the amount is actually ‘paid out’ as wages is another issue unique to the personal tax situation, and state/provincial residency of each IC. Driving labor expense is the single largest expense for trucking companies. Depending on the geographic region, operating mode and length of haul, the combination of driving compensation, benefits and payroll taxes ranges from 28% to 50% of revenue. Industry averages for total driving labor expense per mile range from $0.49 to $0.83 ($0.67 per mile on average). This amount includes base wages, incentive compensation, per diem, accessorial pay, workers comp, health insurance and retirement benefits.
Fuel ($0.40-$0.55 per mile)
Fuel represents the second-largest variable operating expense for any company or owner-operator. However, the difference between a top and bottom performer in trucking is directly correlated to the ‘net fuel expense’ calculation. Net fuel expense is simply the sum of gross fuel receipts, including taxes and additives minus fuel surcharge generated for the same time period. Top-performing trucking companies and ICs focus on some of these items and practices to reduce the gross fuel spend:
- Reducing speed and idle time, and maintaining proper shifting patterns
- Implementing fuel-saving technologies, equipment and practices (e.g. APUs, truck and trailer fairings, etc.)
- Reduce empty miles (unless it is more advantageous from a margin/yield perspective)
- Maximize ‘in network’ fuel spend. This one occurs when economies of scale really take hold, as fuel discounts are directly related to the volume of fuel purchased – the more fuel purchased, the lower the net fuel per gallon/litre.
Typically, gross fuel expense averages between $0.40-$0.55 per mile. However, when you factor in fuel surcharge and some or all the practices above, the net fuel spend can be dramatically less. Some trucking companies go further than most, utilizing financial instruments to ‘hedge’ their fuel expense from changes in the cost of diesel.
Equipment financing expense ($0.00-$0.40 per mile)
To be a trucker, you need a truck. Being mechanically inclined provides a distinct advantage for independent contractors and fleets alike. Being able to properly maintain equipment allows ICs and trucking companies to extend the average age of their trucks, and thereby reduce the large expense related to financing both trucks and trailers. In recent years, tax law changes have permitted accelerated capital equipment depreciation rates, meaning if a trucking company still owes money on its trucks and trailers, it is likely able to net more dollars after tax than before these changes. In recent years, fleets have reduced the average age of trucks to 2.3 years (on average). This trend is based on a growing school of thought that younger equipment reduces total tractor lifecycle expense (although this may be debatable based on original equipment manufacturer, specifications and operating conditions). In addition to traditional note financing, fleets and ICs alike have standard lease options available to them, along with Fair Market and Full-Service leases (the former taking care of the majority of maintenance expenses for a premium charge). As a percentage of revenue, due to the wide variety of financing strategies implemented by fleets and ICs, the cost of financing trucks and trailers ranges from 0%-30%.
Maintenance ($0.09-$0.40 per mile)
Based on my observations of over 200 trucking companies throughout North America, maintenance represents the largest margin opportunity for most companies. To be clear, maintenance expenses should capture all labor, parts, tires, supplies, oil, lube and fixed overhead (e.g. tools, shop rent, utilities, etc.). The difference between the top performers on maintenance and the bottom performers range from a low of $0.09 per mile to over $0.40 per mile! You read that right, that’s a $0.31 swing from top to bottom – think of the money going out the door! For many smaller fleets, especially those that do not use traditional accrual accounting, I suggest capturing the total maintenance spend over the past six months and keep rolling that average forward as each month unfolds. This reduces swings in large repairs from month to month and provides a clear picture of your maintenance expense.
Insurance ($0.06-$0.18 per mile)
Insurance, for the purposes of this article and exercise, is the total cost of liability, physical damage and cargo insurance premiums and deductibles, plus the expense of any other accident-related damages. The latter item is one which sometimes gets ignored or is inappropriately categorized as a maintenance expense. In recent years the cost of insurance has been dramatically affected by the growing trend of nuclear verdicts in multiple jurisdictions and continued general accident repair expenses. This trend has led more companies and single truck operators to shoulder more of the burden of insurance themselves through higher deductibles and captive insurance arrangements. Increasing the deductible per incident (retention) also raises the risk of financial harm in the event of an accident. As such, a prudent operator should invest any insurance expense savings in practices and technologies to reduce the probability of accidents in the future, such as in-cab event recorders, collision mitigation tech and enhanced entry-level driver driving.
Variable driving expenses ($0.01-$0.09 per mile)
This category is the most nuanced of the expense categories, and the last of the ‘variable’ operating expenses. This group captures all the permits, tolls, fines, along with motels, lumper fees and driver orientation/screening and recruiting expenses (which can be significant depending on the size of operator/company). As such, it is a bit of a ‘catchall’ for those items that don’t fit cleanly into one of the other large buckets. Top performers keep an eye on the above items to ensure that they aren’t a symptom of inefficient dispatch (layovers), unsafe practices (fines), poor routing decisions (tolls) and bad culture (increased turnover).
Non-driver wages & benefits ($0.06-$0.30 per mile)
This is an area in which independent contractors have an advantage, as they handle all sales, administrative and operating activities themselves. However, they are very susceptible to spot market changes, and the reliance on brokers or load boards for freight. For those that seek to grow their fleet, you need to start hiring people for sales, dispatch, finance and safety roles. Depending on the operating mode (trailer type) and length of haul, a trucking company will have three to six drivers for every one non-driver. For smaller fleets, the expense of non-driving positions represents as much as 15% of revenue. As a company grows, and implements software and standard processes, the cost of non-driving activities can be reduced significantly (by 4-7% of revenue).
Fixed overhead ($0.06-$0.30 per mile)
The last of all operating expense categories is fixed overhead expense. This category will capture all rent, office supplies, software, utilities and communications expenses (among many other possible expenses). Generally speaking, from a percentage of revenue perspective, the cost associated with this category should closely approximate the cost of non-driver wages and benefits.
You cannot simply take the sum of the lowest values and highest values for each of the above categories to establish total operating expense per mile range for trucking. This industry has an endless number of modes and operating models, not to mention people and aptitudes. Being a top performer in one category doesn’t necessarily equate to top performance in multiple categories. However, understanding the numbers and their place in your margin equation can be the difference between survival and realizing the American (and Canadian) dream.
September 15, 2021
Cass Information Systems has released the Transportation Index Report for August. Cass reports the shipments component grew 12% year over year in August. The Cass Truckload Linehaul Index in August rose 1.1% over July and 12.6% year over year. Cass expects the equipment and driver shortages to continue into the near future.
Trucking News – US Freight Rates
September 13, 2021 – Courtesy of DAT Trendlines
September 2021 Freight Rates
|Sep 06 – Sep 12 vs Aug 30 – Sep 05||Aug 2021 vs Jul 2021||Aug 2021 vs Aug 2020|
|Spot Market Loads||-18.5%||+11.9%||+48.6%|
|Spot Market Capacity||-7.0%||+3.3%||+10.1%|
|Van Rates (Spot)||+1.7%||+1.1%||+23.8%|
|Flatbed Rates (Spot)||+0.5%||-1.4%||+33.8%|
|Reefer Rates (Spot)||+1.0%||+0.4%||+29.0%|
DAT.com reports truckload rates remain steady. DAT’s September 13th Trendlines Report shows current national van rate averages are at $2.84 per mile, an $.09 increase from the August average. According to DAT, the highest average van rates are in the Midwest at $2.99 per mile. The lowest average van rates are in the Northeast at $2.53 per mile.
DAT reports the current national load-to-truck ratio is 6.22 loads to truck, compared to the August 22nd average of 6.40. Ratios are high from the Great Lakes states, and central plains. The lowest ratios are in the Southeast and desert Southwest.
Reefer freight rates are averaging $3.24 per mile, up $.10 from the August average. Reefer rates are highest in the Midwest, averaging $3.49 per mile, and the lowest rates are in the Southeast, with an average of $2.81 per mile.
National reefer capacity is at 12.75 loads to truck, compared to the August 22nd average of 14.24. Current load-to-truck capacity shows reefer demand is high throughout most of the country. The lowest ratios are in Southeast and Southwest states.
National average flatbed rates are currently at $3.06 per mile, the same as the August average. The Midwest has the highest average flatbed rates at $3.25 per mile; the lowest rates are in the West, with an average of $2.71 per mile. Nationally, load-to-truck ratios are at 42.96, compared to 41.53 on August 22nd. Load ratios remain high throughout the country. For more details, visit Dat.com.
Turning to fuel prices, the latest Energy Information Administration data shows the national average diesel price is at $3.37 per gallon, a $.01 increase from one month ago. Regional diesel prices range from $3.10 in the gulf coast states to $3.49 in the central Atlantic region. California diesel prices are averaging $4.31 per gallon.
*Diesel fuel price map as of September 14, 2021.
|08/30/21||09/06/21||09/13/21||One Week Ago||One Year Ago|
|East Coast (PADD 1)||3.306||3.332||3.337||+0.005||+0.838|
|New England (PADD 1A)||3.271||3.285||3.288||+0.003||+0.683|
|Central Atlantic (PADD 1B)||3.474||3.483||3.486||+0.003||+0.810|
|Lower Atlantic (PADD 1C)||3.201||3.240||3.246||+0.006||+0889|
|Midwest (PADD 2)||3.241||3.284||3.282||-0.002||+0.974|
|Gulf Coast (PADD 3)||3.060||3.104||3.099||-0.005||+0.927|
|Rocky Mountain (PADD 4)||3.628||3.645||3.636||-0.009||+1.268|
|West Coast (PADD 5)||3.997||4.020||4.016||-0.004||+1.061|
|West Coast less California||3.645||3.664||3.661||-0.003||+1.086|
Factoring for Trucking Companies
Factoring Keeps Trucks Moving Forward Factoring is a common financing solution for trucking companies to access cash that is tied up in their receivables. Instead of waiting weeks or even months for customer payment, get paid same-day with TCI Business Capital. We’re proud to be the top factoring company for trucking companies across the United States.Benefits of Factoring with TCI Business Capital
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To learn more about our freight factoring services, call TCI Business Capital at (800) 707-4845 or contact us via the web.
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If you need to hire a tractor and driving crew to move a trailer that you already have available, you will want to find a reliable and affordable solution. By working closely with freight carriers and power-only service providers across the country, we make sure that Freight Rate Central’s prices are affordable and predictable. That way, we can provide a fast, free and accurate estimate on the price of hiring a tractor and crew with our online freight quote calculator.
When is Power Only Service Needed?
You may find yourself in a situation where you have a trailer that you can load up yourself, but you don’t have a tractor or driver to move your goods or equipment. Power-Only Trucking services are on call to take care of these problems, providing both a tractor and either a single driver or a team to pull customer owned trailers wherever they need to go.
We can match you with a power-only trucking service that either moves cargo locally or for long distances, even across state lines or internationally. Power-only units are extremely versatile tractors and are driven by highly experienced drivers who work either alone or in teams, depending on the exact nature of the shipment.
How Do Power Only Cabs Work?
A power-only trucking unit includes an adjustable fifth wheel that helps fit the tractor to your trailer’s exact dimensions and specifications. This gets a lot of guesswork out of the way, and that is an important consideration when you’re trying to ship some cargo that you’ve loaded yourself. Most power-only units are suited to handle standard weight loads, but larger, four-axle units are available for moving overweight loads. It’s important to know beforehand which kind of power-only unit you’ll need.
Fortunately, the power-only truckers that we work with are highly experienced in moving a variety of cargo and working with all kinds of equipment, including oversized equipment. When trying to move sensitive or fragile freight, having an experienced team driving the tractor is essential. If you don’t have a trucking team available that has the skill and experience that you need to haul your cargo, or if you’ve got more trailers than cabs and you’re simply over-committed, then we can find you a power-only service in your area.
What are Power Only Set-Ups Commonly Used For?
Moving equipment like flatbed trailers, shipping containers, dry vans, tankers and refrigerated vans are no problem to our Power Only carriers. We work with a wide array of customers who need to move everything from medical equipment to military ordnance, and we can find truckers who have personal experience hauling whatever kind of cargo that you need to move. As long as the equipment complies with national, state, and local regulations throughout the regions where it will travel, Freight Rate Central will be able to find a power-only freight service provider to do the job.
Power Only Limitations
Power-only trucking units do have a few limitations. Standard power-only trucking units have three axles, but three axles aren’t always sufficient to move the heaviest loads. Overweight loads may require the use of a four-axle power-only unit, so it is essential that we know the weight of the shipment in order to get the right power-only unit and crew for the job.
In general, power-only trucking services are an ideal solution for moving unexpected loads quickly, for taking up the slack when your drivers are over-committed or for making long distance one-way hauls. In general, power-only trucking units are the perfect solution for moving specialized equipment or for making long, one-way trips.
Rates per only mile power
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