Rate/Mile vs. Gross

sweetbillebob · May 17, 2008

Here is the general question. Are you better off grossing 22.5K/month at 1.90/mile or 26K at 1.70/mile.
The boss wants $1.80/mile for midwest and $1.85/mile for the coasts. So we turn down offers that will not having us meet his criteria. This includes turning down $2000 loads that pickup on Friday and deliver on Saturday that pay $1.74 delivering in FL requiring some DH to get out of FL to sitting for the weekend and picking up a $1000 load for Monday at $1.85/mile and leaves us in the research triangle in NC Monday nite.
I know there is a balance between $/mile and gross. Hoping for feedback as we consider becoming owner/operators.

Jack_Berry · May 17, 2008

what kind of truck?

sweetbillebob · May 17, 2008

2008 Freightliner Columbia, M/B, 18' box
Averaging 9.00 including idle/refer

ATeam · May 17, 2008

sweetbillebob said:
Here is the general question. Are you better off grossing 22.5K/month at 1.90/mile or 26K at 1.70/mile.

It would help if you provided the number of miles driven, and how many of those are unpaid deadhead miles. It would also help to know what the cost per mile is to operate the truck. If you cannot provide that, share what you can. I can plug in some assumed values after that to run the numbers and answer your question.

sweetbillebob · May 17, 2008

Hey Phil, Glad Your Online

When I say $1.90 or $1.70/mile I am talking all miles. When calculating I take the gross minus the tolls and divide by all miles, DHPL and DHPU Included.

We are driving a 2008 Freightliner Columbia with a MB powerplant. We average 9 miles/gallon including generator and reefer. 100" sleeper, 18' bed. WG/TVAL/RadMat/Explosives. Have just submitted DoD application.

ATeam · May 17, 2008

sweetbillebob said:
Here is the general question. Are you better off grossing 22.5K/month at 1.90/mile or 26K at 1.70/mile.

$22,500 gross/$1.90 per mile = 11,842 miles
$26,000 gross/$1.70 per mile = 15,294 miles

Let's assume (you can give or take as you wish) it costs $1.50 per mile to operate your truck. Thus:

11,842 miles x $1.50 per mile = $17,763 to run the truck.
15,294 miles x $1.50 per mile = $22,941 to run the truck.

At your $1.90 scenario, your profit is: $22,500 - $17,763 = $4,737.
At your $1.70 scenario, your profit is: $26,000 - $22,941 = $3,059.

For the higher gross revenue figure (the $26,000), your monthly profit was $1,678 lower and you drove 3,452 more miles to get it. Doing that, you will wear your truck out faster and pocket less money. Thus, it is better to gross $22,500 at $1.90 per mile than $26,000 at $1.70 per mile.

jaminjim · May 17, 2008

What is DHPL, I'll take the $1.90

nightcreacher · May 17, 2008

DHPL dead head to planning for the layover option.one of the 50 mile give aways,but does get fsc

jaminjim · May 17, 2008

Thanks night

nightcreacher · May 18, 2008

Myself i like working on a percentage contract,this way I can control my net income.On a flat rate,if you dont ge the miles,you wont make the revenue.With the flat rate companies ive been involved with,they dont like to waist their money paying you to dead head anywhere,so you could be siiting around more.On percentage,you can make the decission where you want to sit,or move to another location,sometimes get paid sometimes not,but if your useing your head,the load that took you there would have enough revenue to let you make the move.Its what ever you like,flat rate is easier,the rate on all loads will be the same,percentage will make you use your knowledge from your experiance,on past loads

LDB · May 18, 2008

sweetbillebob said:
This includes turning down $2000 loads that pickup on Friday and deliver on Saturday that pay $1.74 delivering in FL requiring some DH to get out of FL to sitting for the weekend and picking up a $1000 load for Monday at $1.85/mile and leaves us in the research triangle in NC Monday nite.
I know there is a balance between $/mile and gross.

Did this turn down result in sitting the weekend? Presuming a cpm that isn't ridiculous, generating $1.74/mi or sitting and waiting for the "magic numbers" while generating $0 is a pretty simple answer. Every offer has to be looked at individually. Depending on circumstances, the identical offer might be accepted one time and refused another.