Time for a quick lesson on something I think is missing in the calculations I see on the news, including the fine folks I work for. The cost of operating, known as COO, is a hard metric to judge. It’s different for everyone. A driver out in Nebraska pulling bull haulers will most certainly have a different COO than a local hot-shot driver in New York City. A single bachelor will have a different COO than a husband and wife team saving or paying for their children’s college tuition. Several veteran drivers, like Jeffrey “The Professor” Like, have put out guides on how to calculate your own COO.
Okay, here we have what SONAR can provide us, the Department of Energy Fuel Price Index and the Truckstop.com 7-Day Rate for Dry Van. I pulled vans, you might pull reefer or flatbed; SONAR has them all. To know if the rate you’re getting paid works for you; take the fuel price, figure out your fuel cost per mile, add in your COO, and subtract that from your rate. If the number you arrive at is positive, great, you’re making profits. If not, well, time to change lanes.
It’s about using the tools available to survive the downturn in the cycle. That happens in trucking about every three years. Freightwaves CEO Craig Fuller explains that in this article. You make bank and build nest eggs during the high rates (that $5/mile was really nice), then run the tried and true stable lanes when the drop-off comes.
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