If it was so good when fuel was cheap then you should ask what marina is his yacht in. If fuel was .50 some people would still complain about how it used to be. :lol:

 

merrick, isn't your wife from Ecuador?

 

I know Bigmon. Believe me, people get annoyed with me sometimes cause I will ask the same quesiton over and over, but that's because people usually leave out details so I need to keep asking. No doubt this is a tough environment but I have been thinking;

At most my fuel is $.60 a mile. I am getting good fuel mileage and have an APU and I'm not paying $3.50 a gallon. I think it was DD60 who had reefer fuel at $.15 a mile but I don't think I am even close to that. Besides it seems I am doing better with the reefer fuel. I asked the reefer guy today and he said in the beginning it always burns more.

So that's about $.60 for fuel. Insurance is $14,000 for the year so based on 100,000 miles that's $.14. so that brings me up to $.74.

My truck payment is like $670 but that was with a lot down, actually how I did that was complicated so I'll just say $900 a month so that's about $.11 which brings me up to $.85. I don't know how to do depreciation but the accountant will be giving me some financials soon.

The trailer and APU is on credit but basically it's mine as I have the title and the money to pay it off. The trailer/reefer cost me $58,000 but divided by 7 is $8285 and divided by 100,000 is $.08 so that brings me up to $.96 a mile (I'm starting to get sick :? )

Then we have cellphone, load boards etc but I won't count those. First I've had the same cell phone plan for years. I do have the laptop card but I am getting several hundred back every month in cash back from buying fuel so I will use that money to offset those expenses.

Then I have maintenance, tires, ets but I don't know how much that all costs yet. But just from doing all of this off the top of my head, I can see if I ran for $1.00 a mile than I would be losing money. Say I had a driver with pay about $.35 a mile then basically there wouldn't be much left over.

 

Merrick. I punched your figures into my custom built truckers calculator and your cost per mile is $.38 cents so your doing fine!!

 

Yes she is. Isn't your's from Peru? Someone on here married a Peruvian. They are bitter enemies those two countries. Well maybe not bitter but they each claim the other stole. I went to a museum in Ecuador and they had the map of Ecuador and how Peru stole land.

 

This might seem a little long, but I'll try and illustrate my approach to the DH.

Say I'm quoting rates based on the following assumptions:

DH+OOR = 8%
Operating Costs / loaded mile = $1.30

With these in mind, I quote my loads at $1.50/mile loaded and $1.00/mile DH. That's just for the DH necessary to run the load i.e., distance to shipper or DH to exit a bad area. I don't worry about extra miles I might need, whether they're DH or OOR, to grab a shower, run around if there's a layover, etc.

When it comes time to evaluate performance, I do so on two levels. First, I evaluate based on the rates I'm getting. On the miles it takes to haul a load, am I getting paid enough? If I have to go 20 miles out of route because I want a nicer shower, those 20 miles aren't necessary to complete the job. This evaluation helps me figure out my position in relation to the market. If three trucks are all starting at the same place and then hauling the same load, how do you compare them if they all travel different distances to get the job done? You have to try to standardize in order to compare. Say two of us are bidding a load. Maybe my previous load required me to run all night and I didn't get a shower whereas my competitor is coming off a fresh 10-hour break. If the only shower on this next run is 20 miles OOR, I will be at a competitive disadvantage if I try to capture my cost in this bid. I try to evaluate each load's performance based on the most standardized scenario I can.

My second evaluation is more of a macro one. That's when I sit down, say at the end of the quarter, and look at overall profitability. I don't do this on a per load basis; only a period of time, in this case quarterly. Now, say I find that instead of the 8% DH+OOR I had assumed, I was actually running closer to 12%. Because I calculate my costs on a loaded mile basis these increased miles show up as an increased cost of say $.02/mile. From that point on (at least until my next evaluation) I base my bids on a loaded mile cost of $1.32 instead of $1.30.

One of the enemies of any business is wildly fluctuating costs. Costs are much easier to manage if you can smooth them out. You do this by accounting for them over a longer time horizon. Say you calculated your cost per mile on each load, graphed it, and connected the points. You'd have a line going all over the place due to headwinds, breakdowns, lumpers, etc. Now apply a best-fit line to that graph. You'd have a straight line. Which is easier to forecast off of? And that's what it's all about, predicting what your costs WILL be. It doesn't matter what they WERE, what's done is done. You either lost money or made money, neither one helps you tomorrow.

Simple, eh? :shock: :lol:

Basically it comes down to this; the cost to run any load is broken into two components. There are those things that are unique to the carrier i.e., cost to operate, desired profit, etc. Then there are those things that are unique to the load; miles, tolls, lumpers, and the like. In order to make the most competitive bid, you have to level the field as much as possible. The easiest way to start is to make sure the load your bidding on looks just like the load the next guy is bidding on.

 

Thanks Steve. I never was good with math, so I was hoping that I was in fact over counting. I'm glad it's $.38 cause the numbers I was coming up with was too high.

 

Thanks No_Worries. Actually I'm going to need to read this a couple times. So I'll withhold any comments for the immediate moment.

He no_worries, when you coming back to work? Don't tell me you left the skiiing to now go jet skiing in Southern Cali. Boy aren't you the poster boy for living the life of an O/O

 

Yes, mine is from Peru. I have heard about the border disputes also. Ironic that those two poor countries without that much to lose, relatively speaking, don't hesitate to send their militaries to defend their borders, but half the world freaks when the US sends a few NG down to observe.

My wife lived near the border with Ecuador at one time and still has family there. I'll PM you with other related stuff.