channel 19

Todd Dills

Profit — what this trucking thing is all about: A new, simple freight-bid calculator app

| January 25, 2018

Missouri-based Power House Transportation small fleet owner and operator Scott Jordan regular readers may recall from coverage of the October ELD mandate protests, where he figured prominently among truckers involved with the Operation Black and Blue effort. He was one among the several haulers that participated in the meeting with FMCSA officials on the protests’ third day.

Jordan grew up the son of an owner-operator. For the last seven and some years, he’s run Power House Transportation, hauling today with several leased owner-operators. In recent years, he’s also banded together with a group of like-minded independents under the “Independent Carrier Group” name to support each other and share ideas. With some programming in his background, he soft-launched last Fall an Android app I think a lot of independents may find some utility within. The ICG ProfitCalc app is now also available on the iTunes app store for the iPhone and other iOS-powered devices, in both app markets for a $15 onetime cost.

Basically, it’s a bidding app that allows users to input their own annual cost projections as a benchmark for load-by-load rate calculations to ensure a chosen profit margin – for longtime operators who know their typical annual numbers, setup will be fairly quick and easy. After setting up those annual numbers, it then allows users to quickly input basic details for any load they’re negotiating (with brokers and/or shippers) and target a specific profit margin on that load. Based on load mileage and other details, and those annual cost numbers, it gives operators bid numbers in lump sum/per-mile and/or hourly rates. Adjusting any number in trip calculations or in the annual cost projections autopopulates the bid window to allow for on-the-fly adjustment during negotiations. I talked with Jordan about the genesis of the app — and more (ever hear the one about the farmer, the fox and the butcher?) — in the podcast you can hear up top or below:

Jordan has been using a similar bid-calc system, based on basic business line-item-allocation principles, for about four years in his own business, and believes it can be an effective on-the-fly calculating tool not only for seasoned freight negotiators but also for those just starting out in the trucking business as an owner-operator — for the latter, to truly be sure they’re “Trucking for Profit,” in his words, and not being a drag on the market.

That “Trucking for Profit” phrase is also one that Jordan’s put to a series of endeavors – including training webinars, a “load optimizing” dispatch service for independents, and more, some of which he’s had in place for quite a while and other parts, including the optimizing service, which are new.

In the podcast you’ll hear references to a video you can find at this link, Jordan’s ICG ProfitCalc set-up vid, essentially.

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An important aspect in the annual numbers allocations in setting up the app is that there is a driver-cost field. If you’re an owner-operator of an S Corp paying yourself a salary, this is where you input your salary. With that accounted for as a cost, profit margins between 20 and 30 percent might be appropriate for your trip calculations, but most owner-operators think about profit margin differently, excluding driver pay as a cost and counting it among their entire income. That’s why most profit-margin averages for owner-operators we see quoted by business analysts and owner-operators fall within a range of 40 percent, higher or lower depending on a variety of factors.

If you try out the ProfitCalc and decide to leave the driver cost field empty, be sure to adjust your desired profit margin higher than the 20-25 percent Jordan recommends starting out in the set-up video. As he might say, it’s certainly good policy not to give away the chickens for free if you don’t have to.

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