Knowing your price per mile is important.
Hotshot truckers earn by every mile they drive. The typical national trucker drives anywhere between 2,000 and 3,000 miles every week. If you want to know the national average, the rate is between $1.75 and $2.50. But what are the factors to consider to set your rates appropriately? Here are five factors you must consider to determine or fix your price per mile.
The farther you’ll be traveling, the more you’ll have to spend on fuel. Whereas if your destination is just nearby, you won’t be putting as many miles on your truck and trailer and so you won’t have to spend that much. Of course, you won’t be making as much money either.
A factor related to this is servicing for your truck or trailer. The more you drive, the more you’ll have to service your vehicle. This will affect how much you charge.
2. Road Conditions
If you’re driving in heavy traffic, say you have to haul a load downtown in an urban area, you’ll be driving at a slower pace and so it will decrease the number of miles you can complete. Similarly, if you’re hauling a load in bad weather like snow, it will be more time-consuming and harder on your vehicle. Thus, you’ll have to charge more money during inclement weather.
3. Fixed Costs
There are expenses you pay for whether you’re hauling a load or not. For example, insurance, licenses, payments, permits, etc. You’re still going to be paying the same amount for your trailer every month whether you drive hundreds of miles or if your trailer is just parked in your driveway. The same goes for permits and insurance. So make sure you are tracking these fixed costs to ensure you are still making a profit after all the expenses.
4. Variable Costs
Variable costs, on the other hand, vary from one load to the next. The amount is not the same from month to month, but depend on how often you use or operate your trucks. These variable costs include fuel, lodging, maintenance, meals, repairs, and other miscellaneous expenses you’ll incur while being on the road. The more miles you travel, the more you’ll tend to spend on fuel, lodging, food, and even servicing of your vehicle.
It’s vital also to keep track of your variable costs to know how much you’re spending and to ensure you are still making a profit.
Deadheading is operating your truck without making any money. It usually means driving to pick up a load. Seeing it’s not profitable, you’ll want to avoid deadheading as much as you can. But part of determining your price per mile is to calculate how many miles you’re going to have to deadhead to pick up these loads. Then figure out how much more money you need to earn to make up for these deadheading miles.
Over to You!
How about you? What’s your strategy for determining your price per mile? Let us know in the comments below.