Trucking: Local rates, trucking tools, mileage basis


Question
I'm an owner operator here in Texas. I'm trying to bid on a contract with a brick and stone company. All the deliveries are local(within 200 miles). Some are straight loads, and some are multi-stop loads. I need help in trying to rate these types of deliveries. I'd appreciate any help you could give in this area.

Answer
Frank, with any pricing question the first step is to understand all of your costs both fixed and variable.  Fixed costs are those that you will incur whether or not you handle the new business, like your capital costs for the truck, insurance, licenses, etc.
Variable costs are only incurred when you run the truck, like fuel, driver pay, wear on tires, brakes, etc.  These are usually calculated on a mileage basis, whereas fixed costs can be allocated by the load or by the mile depending on your operation.  I would calculate your overhead costs for billing, dispatch, etc. on a per load basis and then add the variable mileage costs to find out what you need to break even.  Then add an appropriate profit and that should be the starting point. Here is a good article with more detail:
http://www.ooida.com/trucking_tools/CPM/cost_per_mile.htm
If you can find competitive market rates that will give you a benchmark and help you stay in the ballpark.
Now keep in mind that shippers only want to pay you for loaded miles and since the chance of finding any return haul without some deadhead and lost time are slim on this short haul local traffic, you will need to cover those costs as well.  Be particularly aware of mileage based fuel surcharges which may only cover you in one direction.  You will need to calculate and include any fuel shortfall in the base rates you quote.  If you can get a percentage based FSC it will generally work out better on the short hauls.  I am assuming you are running a flatbed and the product does not need to be tarped, but if it does be sure to quote a separate tarping charge.
For multi-stop loads you will want to charge for all miles from origin to final destination via the stop point or points and then a per stop accessorial; charge for all stops except the final one.  Also be sure to limit the time for unloading at each stop and have a detention charge if they go over.  Hope this will help.
Best of luck.