Sign up for The Wire Newsletter!

It's a Team's Life

Law of averages

By Linda Caffee
Posted Feb 10th 2013 11:34AM

Must we have an absolute minimum Pay Per Mile (PPM) and only accept loads that meet or exceeds our minimum PPM?  Can we afford to take less than our predetermined minimum PPM?  Do we have data to support our minimum PPM requirement?  Do we know how much it costs us to sit and wait for that perfect load?

 

A lot of background criteria has to be analyzed quickly when saying yes or no to a load offer.  With the use of a spreadsheet it is relatively easy to know where we stand, income wise, so that we can make an educated business decision. This is a little over simplified, as experience plays a big part in knowing if a load will be profitable after the load in finished. Sometimes the load that looked really great on paper leaves us in a remote location with minimal load potential.

 

The below spreadsheet is a sample of what a month can look like.  The entries are typical info and the information in the spreadsheet is not our actual numbers or our actual loads.

 

The spreadsheet includes a deadhead column.  This column includes several figures such as personal miles, miles from delivery to layover, and layover to pickup.  The spreadsheet is based on percentage-based loads, but could be modified to fit any type of pay. 

 

 Day pay is more important in this spreadsheet then pay per mile.  In order to determine day pay, fixed costs are included as well as estimates of variable costs.  Pay to the driver is also included in the day pay. 

 

In order for you to determine your needs for day pay, take how many days you were out last year, add the fixed costs to the variable costs divide the income needed by days away from home.  If you are new to the business figure out how much income you need for the year including an estimate of variable costs as well as fixed costs.  Now decide how many days do you want to be away from home.  The less time spent at home the less day pay you will need.  This number needs to be realistic, so be a pessimist when deciding this number.  After a year you will have better figures to work with.  Another spreadsheet that can help you determine these amounts is on the OOIDA web site http://www.ooida.com/OOIDA%20Foundation/Tools/cost_spreadsheet.shtml

 

For some the numbers might be low and for others the numbers in the spreadsheet could be high.




Averaging.jpg



If you would like a blank copy of this spreadsheet email me.



Bob & Linda Caffee

TeamCaffee


Saint Louis MO

Expediters 8 years been out here on the road 13 years

linda.caffee8@gmail.com

 

Expediting isn't just trucking, it's a lifestyle; 


Expediting isn't just a lifestyle, it's an adventure;


Expediting isn't just an adventure, it's a job;


Expediting isn't just a job, it's a business.

6 Comments

  • - February 10, 2013
    Linda-=|=-Comments Welcome
  • - February 10, 2013
    Linda-=|=-Comments Welcome
  • - February 10, 2013
    John Jolley-=|=-I always enjoy reading about you latest adventure and many of the helpful tips you've given to us newbies. The $1.49 above PPM does not appear to be an informative number-just an average-seems like your pay is closer to $1.37/mile for total miles...thought that might be alittle confusing if you just glanced at the totals. IMO Be safe out there.
  • - February 10, 2013
    John Jolley-=|=-I always enjoy reading about you latest adventure and many of the helpful tips you've given to us newbies. The $1.49 above PPM does not appear to be an informative number-just an average-seems like your pay is closer to $1.37/mile for total miles...thought that might be alittle confusing if you just glanced at the totals. IMO Be safe out there.
  • - February 10, 2013
    Linda-=|=-John you are right when you take the miles divided by the pay divided by miles.

    I was more concerned with the average of the PPM on each load.

    As long as all the numbers are above what you need to be out here each day all is good.

    Thank you for your observations, reading, and for your comments!
  • - February 10, 2013
    Linda-=|=-John you are right when you take the miles divided by the pay divided by miles.

    I was more concerned with the average of the PPM on each load.

    As long as all the numbers are above what you need to be out here each day all is good.

    Thank you for your observations, reading, and for your comments!

Please sign in or sign up to post a comment.  Or sign in with Facebook.