Forming a trucking company, getting a truck, and booking loads is how money is made in the trucking industry. It sounds easy, but there is a lot to consider when trying to figure out what kind of loads you want to haul. Everyone wants the highest paying truck freight, but how do you get it? How do you know which types of freight pay more? Here are some tips to help you figure out which common carrier freight rates are right for your trucking company and will help you earn a higher revenue per mile.
Freight Rate Basics
Freight rates are variable, meaning that they are constantly changing depending on the economy, fuel prices, supply and demand, and the season. The costs of running a trucking company are fairly stable in comparison with cargo rates. Knowing your own trucking companies cost per mile is vital to making a profit on the road. Just for reference, according to the research done by ATRI, the average cost per mile in 2015 was $1.59 for all motor carriers. One easy way to make sure that you have a found a good rate on a freight shipment is to multiply the total mileage of the load route by your trucking companies cost per mile to figure out what it will cost you to haul the load.
Example: $1.59 X 1,310 = $2,082.90
In the example listed above we took ATRI’s average cost per mile ($1.59) and the mileage for a round-trip load that is going from Glen Allen, VA to Albany, GA (1,310 miles). This load would cost you $2,082.90 to haul. As long as the freight rate you’re getting will pay more than what you will spend to get the cargo there, you will make money on that truck shipment.
One of the most important things to remember is that higher paying freight is relative. What you consider to be high, might not be for the person next to you on the road. Try not to let all the information that is out there about the highest paying truck freight loads let you lose sight of accounting basics, revenue and making a profit!
Freight Types and Their Affected Rates
Like everything else, there’s give and take when it comes to finding higher paying freight. While there are no good and bad types of freight, there are some that just won’t work for every trucking company. If it pays higher, there’s a chance that it might require more training, experience, and it may cost you more in insurance coverage to haul. So looking at all the opportunities and challenges of specific freight is important to figure out what works best for your trucking company and your drivers.
Specializing in certain types of freight; like hauling motor vehicles, livestock, or hazardous materials will gain you a higher freight rate per mile but those types of freight require special licenses, higher insurance premiums, and a lot of special equipment and training. It’s important to keep in mind that while on paper it might look like you are getting paid more, there is a lot more money that needs to be spent up front before you can haul those items.
Flatbed trailers are often awarded higher paying freight loads. This shipping type might be a good fit for a trucking company with experienced truck drivers that love a challenge and are willing to do a little extra work to get paid more, like help with loading/unloading, and tarping certain loads.
Dedicated lanes and Less-Than-Truckload (LTL) jobs are often highly sought after because of the perceived higher paying freight rates and reliability of consistent freight. While those two things are true, the market for dedicated lanes and LTL loads is so competitive that they can be hard to find and hard to keep.
Load Boards Can Get Your Foot in the Door
Load boards are websites you can use to find and book all types of loads. Our free load board, NextLOAD.com gives all trucking companies, not just our clients, the ability to search for and filter loads by trailer types, truckload types, destinations and rates listed. Most importantly we show which brokers and shippers have an established credit line with Apex so you know that you are booking quality loads that can help you create relationships to earn those higher paying truck freight rates.
Do you want to book the highest paying truck loads and stop focusing only on the loads that pay quick? Factoring your freight bills can help you with your cash flow so that you can book more loads and get paid the same day. Call Apex Capital today at 1-855-369-2739 or get started here.