ADVICE * USA - How to Increase Hauling Rates

The market place and the laws of supply and demand are what determine hauling rates

Midlothian,VA,USA -Getloaded, by Timothy D. Brady -October 21, 2009: -- The typical response to even the idea of increasing hauling rates is that, “Truckers don’t set the rates, the brokers and shippers do.” But in reality, the market place and the laws of supply and demand are what determine hauling rates. In the current trucking environment, estimates show there are between 250,000 to 300,000 more trucks available to haul loads than there are loads to be hauled. Just by the over-supply and less demand, this fact alone explains the low freight rates... Your trucking operation isn’t any different. No one can know your costs except you. Not dispatch, not sales, not the shipper, not the receiver, not the broker, not the consumer, just you... So it’s imperative you know your fixed costs per day, cost per mile, and load specific costs; reduce these costs where you can, and know when, where and how much you need to increase your rates to bring in the revenue to make a profit... It’s also very important to do small incremental rate increases when it’s necessary. Waiting to do a rate increase until it’s a painfully large one puts a weighty strain on your shippers’ and brokers’ budgets and can cause them to flee to other carriers... A final note: Too many truckers are under the belief one has to be profitable on every load. Especially in today’s difficult economy, this will put you at a distinct disadvantage. A better way to approach the revenue versus profit dilemma is to know what your monthly and quarterly income needs to exceed your monthly and quarterly Break-Even Points. You may have to haul some less-than-desirable loads to stage your trucks for the quality revenue loads. It’s the combination of the revenue of all the loads over a month or a quarter against your total costs for the same period which needs to show a profit... (Photo from hankstruckpictures: Volvo walon)