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How to know what to charge

When looking for loads hiw do we know what is too low a rate, and what we should be charging.

Brokers, well they are not always forth coming in offering the full rates to you, so we must negoiate, where do we info to be able to do this negoiating with good solid info to do it?

Websites

agencies

Where else can we get info on current rates?

Patrick

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Wow...you own a truck but don't know how much you need per mile?! First, figure out your cost per mile - if the offered rate is lower then it's too cheap! Second, sign up for the DAT load board and use the tools they provide to study lanes and rates - that's where the info is for negotiating rates. Good luck.

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Everyone always gives such a smug answer to this question, even Kevin. It really is not that simple. Does a home builder sell his houses by figuring out his costs and how much he wants to make, NO! He charges what the market will pay. Sometimes its a huge profit, sometimes it might even be at a loss. I've been doing this for 24 years and pricing is an elusive answer. I am with Landstar now and have been for over 2 years now. I used to have my own authority and 2 trucks. Here I am discussing the spot market; not contract rates. The core problem is rates are constantly changing; week to week; day to day, even from morning to afternoon. I have Brokers/Agents call me back at 2 pm saying OK they'll pay X amount that they wouldn't pay earlier. If a Broker offers you a load at $3 a mile is that a good rate? You might say heck yeah. But what you don't know is that similar loads are going for $3.75. But you have no way of knowing that. That's the problem with using load boards, you have no comparison. You don't know what the current market is for all the lanes at any given time. When I call a Landstar agent and he doesn't realize I am a BCO and I ask about a load that I saw on Landstar's load board at $4,000. He doesn't quote me $3,500. He quotes me something like $1,900. In the past before Landstar I would negotiate and maybe get another $150 or so. Little did I realize I could have got another $2000. That's the problem with Brokers they play both ends. To the shipper its fuel is high, driver shortage, etc. to the driver its freight is slow, too many trucks, etc. With Landstar I see all the rates. When I search for loads and all the loads out of a particular area are say $1.90 to $2.20, and then Bam a load pops up at $2.90 I know that's a good rate. However, for instance I might see a few loads to say ND at $2.90. But is that a good rate for ND? No, Because I can look around the load board and see that their are ND loads in similar freight markets going for $3.75. Information is powerful, but to get it on your own is almost impossible. Thousands of Landstar agents are throwing rates at shippers constantly and I can see on a daily basis where they are landing. On your own without a sales force making phone calls all day long it's almost impossible to know where the rates are for that particular day. Another factor is these small to medium shippers on the spot market will have a load they have to move say by next Monday. They'll dangle that load out there for a super low rate all week hoping to find some driver who doesn't know better or has to go home or something. But when it's 10:00 Monday morning and they start to panic. I'll start to see that load reposted at higher and higher rates. I've seen loads come up over a $1000 dollars in an hour. And that's when you strike. But you can't do this without knowing. On any given day on Landstar's load board I can see 8,000 plus dry van loads and most importantly what their paying. That gives me the knowledge to negotiate on a very high level. (yes I even negotiate with Landstar agents) Bottom line is there are many factors that affect the constantly changing spot freight market. It's not unlike asking what's a good price to pay for a share of Wal-mart stock. There is no right answer its constantly changing, a good price yesterday is not a good price today. I'm not very good at giving advice, but if I had to give some it would be to never be afraid to ask for a high rate. Do the math before your call. Tell him you want to help him out with this load but you need X amount. The way I figure out X amount if I'm just playing around to see what will happen is if the load is say a 1050 miles at $2310 or $2.20 a mile. I'll do the math at say $2.90 a mile which would be $3045. Then I'll round down to say $2975 to make it sound good. I'll pitch it and the broker will say something like the most this shipper has ever paid is $2700. And I'll say look if he can do it for $2750 I'll take it. He makes a call and calls you back then says the most they'll go right now is $2600. Then you decide. You never know if you never ask. But the method I prefer is Landstar. My per mile is higher now even at 72%. Because of the knowledge of rates and the fact I haul a lot of Hazmat which I didn't on my own because of the regulations and cost when your a one or two truck guy. I'm by far no expert but maybe this post has given you something to think about. Plus I just like talking freight. Keep'em rolling. Dan K.

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Good answer! Yep just gotta do what feels right in your heart and play hard ball!

by

Great insights and info. Thank you.

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One question: how do you find time to do all of that? Can't be scanning the load board all day while driving.

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solid info thanks

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Great info. Thanks

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That was a really good answer from Dan K..

As a guy on my own, I'd like to add; on Internet Truckstop, on the search screen, with a search up, click on "PW", that's past watch, then click on payments. Figure out what loads have been running out at per mile. Then click on a load, and check out the Pintac and Load densities to gauge the demand in the area you will be empty. If you are still over 7 to 1 for loads vs trucks, you can command higher rates. My goal is $2.07 cpm for all miles, so in some areas including DH I'll get the $3 a mile, others $1.85, but at the end of the year I'll be over my goal. The big key to this is rolling with the freight. Many times you are better to DH out of a cheap, low loads to trucks ratio, than staying to get out. But many times I can get a 300 mile load that will pay me $850, which is ok for a day, but puts me in a better position for higher paying freight.

For example, the DFW area many times is as low as 3 loads per truck. Yet while it is horrible for long freight, most of the time I can get a 200 to 300 mile run for $850 that will put me in an area over 7 loads per truck. That's how you set yourself up.

The rates always seem to be higher at quitting time, especially on Friday. Don't be afraid to wait, a two hour wait can add $300 to the rate.

When you figure your CPM, variable and fixed, add at least .50 cpm for yourself, a driver without any risk is getting that plus in a company truck.

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Dan is spot-on but being a fleet owner with Landstar myself; I'd add that 90% of the freight posted on the board is from inexperienced agents or agents that don't know or care what it costs to run a truck. The freight that winds up on Landstar's board falls mostly in two different categories:

1. Bottom feeder freight that inexperienced agents get in their email from brokers and re-post just so they can try to make a commission.

2. Savvy agents working spot-market freight from desperate customers who need a load moved right now at whatever cost is necessary.

It's hard to "bank" on this freight combination.

The first is too cheap and provides little to no profit. These agents need to go away and in my opinion Landstar should reject the notion that brokers are customers instead of competitors. To the contrary; Landstar allows (even encourages) this because they're more concerned with pumping revenue through their system than keeping their BCO's financially healthy and happy.

The second is lucrative but elusive. I've rarely had repeat business offered to me from the same customer who paid top-dollar to move a load.

In the Landstar system, there's (almost secret) freight that most BCO's (Landstar owner-operators) never see; many agents work regular contract freight at adequate, fair rates - and never post that freight to the board. Instead they quietly build a following of good BCO's they can count on and keep those trucks busy.

The way to find this freight isn't on the load board. It's on Landstar's LANE MATCH feature in their website. Find the high volume lanes and get to know those agents. They're the ones who really know how to sell Landstar's BCO to their customers at a rate that will guarantee freight and truck volumes.

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patrick will be eternally grateful.
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