Load Choices
Factor in costs, mileage and time to help choose your most profitable hauls
Here’s a quiz: Which loads and lane would you choose?
Recently, flatbed loads from Chicago to Denver were paying $2.01-$2.19 per mile, whereas Chicago to Dallas hauls were ranging from $1.60-$1.89. If you chose a trip to Denver, you might want to change your mind. The reason: there were 129 loads to choose from leaving Dallas, while only 43 loads were available out of Denver. Plus, the rates from Dallas were much higher.
This example from trucking columnist and satellite radio host Kevin Rutherford illustrates the options owner-operators face in deciding which loads to take. It also points to some of the information an operator needs to know to choose profitable hauls.
Rutherford says you need to evaluate both the loads and the destinations. A higher-paying load to a particular market may be minimized by lower-paying loads leaving that area. If you’re going to a place with limited load availability, you should consider potential deadhead costs to get the next load, he says. Think twice about accepting a load to a market that doesn’t pay well for outgoing hauls, unless you happen to live there and want to go home.
David Wolff, a consultant at financial services firm ATBS, says the elements to consider in load selection are time, miles and rates. Some operators look for loads with lots of miles that pay lower rates, but the time involved to deliver may reduce the overall payoff. You may be able to land a lucrative local or regional run, but can you sustain it or is it a one-time event? How many loads can you run in a week?
The bottom line in profitable load selection is knowing your costs per mile and break-even point. That means factoring in your trucking expenses, both fixed and operating. Also, don’t forget to add in your personal expenses at home. “If you choose to sit for a day and pass up a load because you felt it didn’t pay enough, be aware you will lose this amount for every day you sit,” Rutherford says.
Wolff adds, “What you should be saying is there is no such thing as an unpaid mile. You have to know how many miles you drive each day and ask how much money did you make that day.”
Wolff advises to pay attention to freight cycles when searching rates. “It doesn’t matter if the economy is good or bad, it’s busier before Christmas than it is in January,” he says. “It’s busier in August than it is in July, because back-to-school gives you a kick.”
If you want to take time off, do it at the beginning of a month or quarter, not at the end when more freight is available, Wolff says. “Every dispatcher is trying to get as many miles on his board as possible every week. Understand those cycles and take advantage of them.”
Rutherford says to keep track of fuel costs per lane. Since fuel costs more on the West Coast, the cost per mile will be greater on a Los Angeles-Denver run than it will be for a Houston to Mobile, Ala., trip. Your fuel mileage will also be less because you’ll have to run through the mountains.
Another consideration is load weight. Reducing weight by 10,000 pounds will increase fuel mileage by 4 percent, Rutherford says. The lighter load might pay less but will cost less in fuel and reduced wear on the truck and engine.
Bottom-line loading
Oregon-based operator Bill Esser knows his bottom line and uses his expense knowledge in selecting loads. Esser, who’s owned Twin Rivers Transport LLC in Springfield, Ore., for about two years, says it takes about $1.15 a mile to cover his expenses and pay his salary. “Anything less than that is a loss, and anything more than that is a profit, in a sense,” he says.
Bill Esser takes his son on occasional cross-country trips, but most of the time he hauls west of Colorado.Working exclusively with a broker at a company where he was formerly leased and worked as a driver, Esser estimates he has pulled only three loads this year that didn’t gross him $1.15 a mile. Last year, there were periods when half of his loads dipped below that rate.
Esser, who drives a 2001 Peterbilt 379 and pulls a 48-foot flatbed, doesn’t seek per-mile minimums for his loads. Rather, he considers where the hauls go and what the rates are for loads leaving the area. “You get more going in to compensate for less coming out,” he says. “I don’t look at it trip by trip but the round trip.”
Esser, who’s been driving since 1998, says he sometimes will sit a day if he and his broker believe rates will improve. He says Dallas and Houston are good examples of markets where pay can vary 50 cents a mile or more day to day on outgoing loads. “You roll the dice sometimes on rates — sometimes you guess right and sometimes not,” he says.
