The Ugly Truth About Rate Per Mile
To achieve a $100,000 truck driver salary, in a recent post titled What's a Good Load Rate? I talked about calculating your minimum rate per mile. In this post I will discuss a different way of deciding if you should take load to make that big truck driver salary.
We have a goal of bringing home a $100,000 salary for the year. We need to break down this goal into smaller sub-goals: monthly and daily so that it will be easier to track progress.
In my post, What's a Good Load Rate? I calculated that, In order to make a $100,000 per year truck driver salary, I have to generate $190,000 in revenue ($100,000 salary + $90,000 expenses).
That means generating about (I’m rounding my numbers for ease of remembering) $16,000 per month. Let’s assume that you will be hauling freight 20 days each month. So each day you are hauling you need to generate at least $800 ($16,000/month divided by 20 days).
Now you have a breakpoint. You should only accept loads that will generate $800 per day in revenue.
Why is this alternate view important? Because shorter distance loads eat into your revenue.
Let’s say that you found a load paying $1.74 per mile and the distance to haul the load was 500 miles. You can drive that in a day and generate $870, which exceeds the daily goal of $800.
But when you stop three hours to deliver, drive deadhead to your next pickup point and wait three hours to load, you’ve wasted almost an entire day not generating revenue.
If we take a 1,200 mile load (which will take two days) that pays $1.67 per mile ($2,000 total), we are generating $1,000 per day.
Even better would be a 2,400 mile load at the same $1.67 per mile to generate $4,000 over four days. I think you get the point.
The takeaway from this is it’s better to keep the wheels rolling for a lower rate than to have more stops at a higher rate.
Please share your daily revenue in the Comments section below.
-May the wind be at your six and weigh stations closed.