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2024 Update: these figures were from 2012, of course, today's costs are much greater! Add it all up. Almost $1.40 If you accept a load for less, you are on the path to living in your truck, being away from family and working for Nothing! And, if you read the comments below, these figures seem to be very low. This infograph was also made in the days before $4 a gallon diesel! Click the "Read More" link below the last comment to read more. Many thanks for all the great comments contributed by Linkedin.com members! Dan
Trucking Infographics by TruckersReport
Stan Sharvit • John, it's something that one cannot put a blanket rate per mile on, because it depends on market conditions on the lane you are moving. Trucking remains one of the most capitalistic industries by nature, where the freight rates actually play a role in facilitating trade (in terms of economic feasability). When people talk of an average per mile rate, really it's an aggregate rate on all miles of specific trips or 2 way laneways. Without knowing what these are, it's impossible to say. But if you reach out to me give me some more information, I can show you what is realistic based on the laneways you participate in (I'm in Mississauga, ON, Canada).
Tee Ray Reich • That John, is the million dollar question. What makes it so tough to answer are the variables. I know that is a lame answer...but it is true. One analogy could be 2 processing plants. One 20 years old and the other state of the art. Can the 20 year old plant compete with the new one? Depends on the management and the maintainence of the plant over the last 20 years. On the trucking side I have this observation within my own company. I have 2 owner operators that have trucks that have over a million miles on them. One bought his truck brand new and has maintained it since new. He is very profitable. The other bought a truck that has been through several owners. He is losing money faster than he can earn it. Both haul the same loads, have very similar trucks and trailers and travel the same region of the country. Each of their cost per mile are very different. I would assume that if need be, the profitable truck could actually haul for a little less per mile and still survive, while the other actually needs more per mile if he wants to have any chance of surviving. As far as ballpark numbers go, and at this time, we need to be at $2.16 per mile for every (and that is the key word) that our fleet runs to achieve a 4% profit margin. Within our fleet, we will have some owner operartors with a higher profit margin, while some will be less.
Jerry Noonan • Today both logistics companies and transport carriers do not know how to properly measure the full cost of transport to cover the four key cost segments like the good old days when we had a uniform system of costs accounts mandated by the ICC Bureau of Accounts. I have just completed a "good old days" cost accounting handbook for transport carriers and will publish soon.
Depending on what fuel region(s) a transport carrier operates in transport costs including a net after tax profit should be within the following benchmark range (the median). This financial data is upon a solo operator that is running in the upper quartile range of miles driven. Obviously less miles will decrease transport margins available and increase the breakeven and profit revenue points due to the fixed costs that need to be covered after subtracting the variable over-the-road costs (transport margins).
Variable over the road costs 67.01% 1.34 per mile
Fixed line haul costs 21.53% .431 per mile
Shop costs 2.98 % .060 per mile
Administrative costs 3.90% .078 per mile
Federal and state taxes .69% .014 per mile
Net after tax 3.90% .078 per mile
The days of less than $2.00 per mile are gone. Depending on the broker or logistic markup which now runs from 10 to 30% revenue per mile costs will be 1.10 to 1.30 times total costs. That should put current pricing per mile at 2.20 to 2.60 cents per mile.
If you have any interest in this transport cost handbook give me an e-mail. Hope the above helps the discussion.
Depending on what fuel region(s) a transport carrier operates in transport costs including a net after tax profit should be within the following benchmark range (the median). This financial data is upon a solo operator that is running in the upper quartile range of miles driven. Obviously less miles will decrease transport margins available and increase the breakeven and profit revenue points due to the fixed costs that need to be covered after subtracting the variable over-the-road costs (transport margins).
Variable over the road costs 67.01% 1.34 per mile
Fixed line haul costs 21.53% .431 per mile
Shop costs 2.98 % .060 per mile
Administrative costs 3.90% .078 per mile
Federal and state taxes .69% .014 per mile
Net after tax 3.90% .078 per mile
The days of less than $2.00 per mile are gone. Depending on the broker or logistic markup which now runs from 10 to 30% revenue per mile costs will be 1.10 to 1.30 times total costs. That should put current pricing per mile at 2.20 to 2.60 cents per mile.
If you have any interest in this transport cost handbook give me an e-mail. Hope the above helps the discussion.
Dj Mew • Having been on both sides of the fence, profitability is a two way direction both shippers and carriers want. I've found that if one expects to be considerably more profitable than the other, that one will not wind up the "victor" and both will lose. A carrier and a shipper have to understand it's a partnership they are entering into and as long as they also know that one without the other doesn't work. It's kind of like filling a burlap bag with water. You keep spinning your wheels but it never quite fills up and eventually you lose everything. I'm all for keeping rates competitive, but I refuse to put everyone's kids through college on single loads. Some rates quoted come back as if they are moving gold or prize bull semen or something else with an extreme liability. But then I also believe you can not expect a carrier to move your load for next to nothing just to show your profit margin is a bit higher. Better negotiating and compromise could mean all should be able to enter into retirement with a little cushioning if not comfortably.
Mickey Roy • Interesting comment from the client...lets say you have a FTL 44,000 lbs. travelling from...lets say Montreal, PQ delivering in Owesboro, KY...lets say it's 880 miles...what does the shipper think is a good rate? per mile.
Dj Mew • Originating in Quebec does take on a different perspective because of the lane itself, the advantage of having been on both sides helps me appreciate lane strength. If I were to request a truck from Montreal to Owensboro, I'd probably be willing to start with a base of 2.64 US mile with .63 per mile FSC based on current National Fuel index. But with the same pounds going through a stabler lane I could drop the base and FSC would be based on the national index. It is all relative to where the load originates, it's destination and current fuel. The down side is it can cause loads to become "auctions" individually. I'm sure some shippers and some carriers wouldn't agree with me, I just know it works for me. Sometimes my carriers don't make as much on some loads they do on others but seem to be doing fine hauling for our locations around the country.
Buddy Gainey • I would love to see some $4.00 freight where do you get that?
Mickey you get $2.20 on your backhauls too? Must not run the East Coast
Mickey you get $2.20 on your backhauls too? Must not run the East Coast
thomas white • Peter, dont forget about city, county, state os/ow permits, escorts, and state police escorts. Hire bucket trucks to raise & lower utility lines for each town, city & state you run through. State engineers have to be hired to inspect bridges if our loads are super heavy. The additional costs can be astronomical.
Kevin Ohme • What is the reason that people try to identify this number? Is it the intent to use it to try to negotiate rates? While true costs certainly are a factor in pricing, isn't the major driver supply and demand both in the market and by specific key customers? And would it be the intent to pay cost plus a reasonable rate of return in both headhaul and backhaul lanes? Often the backhaul rates are at or below cost and it seems that in many cases rates are driven down through a combination of supply/demand and cost avoidance- at least from carriers that have a more sophisticated network and pricing model. So will backhaul rates rise to meet the cost-plus needs of the carrier in order to balance inequity? It seems to me that this type of pricing exercise would be more conducive to a dedicated transport program, where supply/demand and unpaid deadhead are largely if not completely removed from the equation allowing both the carrier and the shipper to create consistency and stability that affords the carrier a return on capital and the shipper stability in budget as well as commited capacity. Otherwise, regardless of cost, won't the market continue to clear rates based on what one party is willing to pay and what another party is willing to accept? One can discuss a cost of $4/mile and be able to support it with detailed and credible graphs, but if alternatives exist at lower pricing, doesn't the conversation around cost become irrelevant?
Vladimir C. • To effectively run trucking, you have to consider the fuel itself cost $1 a mile and based on that, figure the rest of expenses , like, tolls, driver salary, 35-40 cents, tires, payments , insurance, repair. So I figure for myself is close to $2 , that roughly cost your truck mile.
Vladimir C. • To effectively run trucking, you have to consider the fuel itself cost $1 a mile and based on that, figure the rest of expenses , like, tolls, driver salary, 35-40 cents, tires, payments , insurance, repair. So I figure for myself is close to $2 , that roughly cost your truck mile.
John Olsen • @Kevin, When I send a mail piece, or parcel Fedex, to for instance London England, UK., I know the exact $ number.
When I ask the price to send a 1 tonne Bale from A to B, I get various numbers from different sources? How is this possible??, same roads, same railway, same barge,same Ocean, same distance...
When I ask the price to send a 1 tonne Bale from A to B, I get various numbers from different sources? How is this possible??, same roads, same railway, same barge,same Ocean, same distance...
Tee Ray Reich • John, just for thought, because I have no clue...but if you took the stated amount of freight for the mail piece, got your cost for that shipment per pound or ounce and then multiplied that number for the 1 tonne Bale from A to B, what would it cost?
Jerry Noonan • Ideally in a perfect freight world freight into and out of a freight clustered area would be equal. That is not the case and many a shipper and his broker agent know the freight in and out is unbalanced and will establish "take it or leave it" market rates that are well below the full and true cost of transport to include a profit.
Transport costs are mirrored both in and out of an area. They are the same. Therefore a transport carrier that does not receive sufficient headhaul rates on the inbound side to average out on the less than cost rates on the outbound side of any unbalanced freight area is destined to go broke over time.
Transport costs are mirrored both in and out of an area. They are the same. Therefore a transport carrier that does not receive sufficient headhaul rates on the inbound side to average out on the less than cost rates on the outbound side of any unbalanced freight area is destined to go broke over time.
Ray Walton • @John O. Really? You are trying to compare a piece of mail to a palletized load? Do as Tee Ray suggests and calculate the per ounce out to a tonne(European spelling). I can pretty much guarantee you will find anyone here willing to ship/transport at that rate.
Todd Traut • You can spend a lot of time analyzing transport costs for a shipper's budget but that does not help out the whole end to end supply chain costs. It can be small or large part of the actual overall budget. My suggestion is to partner with your logistics providers with dedicated capacity and take cost variability out of your ecosystem. Every situation is different and should be take on as a case by case scenario. Regardless, of your situation, every shipper benefits from partnering and collaborating with their logistics service providers. They are an extension of your service to your customer.
Richard Frick • Tried the numbers and I guess my calculator broke. 20,500 gallons of fuel per year equals 1,708.33 gals per month. This would equate to 56.94 gals per day. At 8 miles per gallon, the truck will average 455.52 miles per day/everyday. I don't think that is possible much less realistic. Averaging 5 mpg would drop you mileage down to 284.70 miles per day and still not realistic. I must have made a mistake somewhere.
Hugh Sutherland • Spent the last 56 years in the trucking industry and made it my business to gain experience in just about every aspect of the industry, which included 7 years as technical manager of the Road Freight Association in South Africa. I have also been a great enthusiast of American trucking and the American Trucking Associations. Needless to say, vehicle costs have featured strongly, and having lectured on this subject for a number of years, I find it amazing how confused truckers, big and small, tend to be guided by some sort of standard cost per mile number.
Margins in the road transport industry are so thin that Operators are hard pressed to service their investments. They are lucky if they clear 8 cents in the Dollar which simply demands very accurate planning and real-time management controls. Last, there are so many external and internal factors affecting the cost per mile, it’s impossible to talk in “broad brush strokes”. Each truck’s fixed and variable [operating] costs should be considered in isolation because I believe no two identical trucks produce exactly the same income and expenditure.
Margins in the road transport industry are so thin that Operators are hard pressed to service their investments. They are lucky if they clear 8 cents in the Dollar which simply demands very accurate planning and real-time management controls. Last, there are so many external and internal factors affecting the cost per mile, it’s impossible to talk in “broad brush strokes”. Each truck’s fixed and variable [operating] costs should be considered in isolation because I believe no two identical trucks produce exactly the same income and expenditure.
William Nalett • I'vebeen an owner/operater for 28 years and I'm telling you whoever came up with those numbers is not in the trucking business.They obiously have never bought,insured,maintained,or paid a driver.The person working with those numbers has already lost there equipment.
William Nalett • You know if I kept weekly cost's in my business I would have quit trucking years ago.I can tell if I'm making any money without keeping track of weekly ,or monthly costs.You have to average it out.some weeks are better,or months are better,but the bottom line is at the end of the year.I'm basically saying if i had to look at the weekly numbers,It would depress me so badly I would quit trucking.
Mark Montague • Richard, Try 6.3-6.6 mpg. That is hauling dry van freight averaging 35-44,000 lbs. of cargo in non-mountainous terrain. I've read everything from $1.38-2.40 per mile in these forums. I think the point is trying to understand what factors influence costs leads to ideas to minimize costs. That said, if you are operating under $1.75/mile in over-the-road US trucking, you are doing very well.
Ron Hummel • I've been in a time capsule I guess. Bathroom Tissue used to be Toilet Paper, Previously Owned Automobiles used to be Used Cars, TMS Software used to be Broker Software (OK, a few more bells and whistles maybe) and "Your Total 3PL Transportation Solutions Provider" used to be a Licensed Freight Broker. There's only so much lipstick you can put on a pig. Get the load, move the load, make a profit. Anytime you stretch simplicity, it makes the customer think he's paying for more than what he needs. No offense, just saying.
Ron Hummel • This business is upside down, inside out sometimes. What of we flipped the question and said what is the cost of running a 3PL? Okay, 8% of gross, we'll allow you to keep 10% of gross (they'd be a lot of grumbling on this one). Having a 3PL say to a carrier, "this is what the load pays" is no different than a 3PL walking into the supermarket and saying, "I'll give you 25 cents for a can of peas". In most situations, you'd be laughed out of the store, but not in this business.
What is the rate? The rate is whatever the rate is at that given time, based on market conditions and availability to re-load. The market is changing fast, there is no scientific answer to this question.
What is the rate? The rate is whatever the rate is at that given time, based on market conditions and availability to re-load. The market is changing fast, there is no scientific answer to this question.
Stan Sharvit • Even the can of peas thing is exactly that. You don't go to the store and say 'I'll give you 25 cents for it. You see the price, if you feel there's value, you buy it. If you don't, you let it rot on the shelf. The only difference is that the thing driving sales in transportation is direct sales/marketing, while with other products it is more of a macro thing. But the buying decision on everything we buy is built on the same premise.
Peter Milne • In 2000 a driver was willing to take a load from Miami to Mississauga in 24 hours. Dispatch asked if this was a driver team. The answer was no. Dispatch asked about driving hours. He had many log books, not a problem. Dispatch also said he did not want the shipment to arrive in more pieces than it left with.
Drivers who are willing to take any amount will not be in business for long. Remember the shipper could still responsible for HAZ-MAT shipments, even if you do not tell the driver. How much insurance does the driver carry? Do you know who carrying your load? You get what you pay for.
Drivers who are willing to take any amount will not be in business for long. Remember the shipper could still responsible for HAZ-MAT shipments, even if you do not tell the driver. How much insurance does the driver carry? Do you know who carrying your load? You get what you pay for.
Derrek Snodgrass • This will sound confusing to most of you, but as a broker, I understand this very well. I worked very closely with a group of about 35 of our "core" carriers. I know a lot of trucking companies despise brokers. What they don't understand is that we move freight all over the country, of all types, and have years of noticing trends. When I was in Carrier operations, I assisted my core carriers finding the most profitable lanes for their trucks. I treated my carriers like customers. They would tell me the business they were bidding on. I would tell them the rates for their return trip. This would allow them to bid accordingly to get the business. I would also let them know of any trending rate fluctuations and approx time of year. This is one thing to think about when you develop close relationships with brokers instead of using them only when you must.
Another thing is I recommended running different types of equipment. I worked very closely with one carrier in particular out of WI. They were running all reefers at the time. Well they get their piece of the pie for about 4 mos. of the year. The remaing 8 mos. they are fighting to bid for cheap reefer freight or just taking dry freight. After working with them for a year, the owner bought 4 flatbeds upon my suggestion. Now they run FB freight when produce is slow or non-existant. You will not move their FB out of the house for less than $3.00/mi. or back home for less than $2.00. Just another thing to consider.
Another thing is I recommended running different types of equipment. I worked very closely with one carrier in particular out of WI. They were running all reefers at the time. Well they get their piece of the pie for about 4 mos. of the year. The remaing 8 mos. they are fighting to bid for cheap reefer freight or just taking dry freight. After working with them for a year, the owner bought 4 flatbeds upon my suggestion. Now they run FB freight when produce is slow or non-existant. You will not move their FB out of the house for less than $3.00/mi. or back home for less than $2.00. Just another thing to consider.
Colin Cottingham • shitty cut throat business to be in. THe costs afre the costs and most customers dont get it. Good luck
Ron Hummel • I always tell my carriers don't just go where the money is, form a triangle, stay withing the triangle and sell and market the hell out of your services to every shipper in that triangle. Start at the end points for truckload and work along the lines of the triangle for "on the way" LTL. Brokers do understand selling and marketing a lot better. If I propose an advertising campaign for a broker to open up a new lane or provide a new service, they weigh the cost vs. the potential and just go with it. Many carriers will compare the cost of a $200 ad to owning a new chrome stack. Too often, the chrome stack wins. The largest carriers do understand what needs to be done to sell directly, many of the smaller carriers just don't get it.
Nico Osuna • nice infographic
John Olsen • @Steven Newell . I didn't know there was such a difference in rates. We used to use the same trucking company in Canada, and never considered comparing rates because of the great service. Containers were delivered and picked up on time, every time. Now we are shipping all over, I am surprised at the variance in rates quoted.
Steven Newell • Did you ever consider doing your trucking "in house"...Your present carrier may be doing a great job....but, you've been doing this for 25 years and haven't checked to see if maybe there is a better option? One of my biggest customers was Michelin Tire, and their largest expense was traffic. I'm not attempting to insult you so please don't take offense, but what portion of your costs are traffic related?
See my related posts geared towards owner-operators:
1Regardless of their figures i get the idea they are trying to present
1,000 mile load, $4.00/gal fuel means the rate is $4,000
That's the target. At that rate, trucking companies enjoy all the things other companies do, such as equipment upkeep, good health benefits for employees, year end profits for shareholders and building a retained earnings fund for future expansion, ahhhh....the good old days...maybe they'll come back someday.
7 days ago• Like
2I under if shippers are going to use these numbers for bidding for loads?
I am confused as a customer. What should I pay (ballpark).
1